Welcome to day 13 of our special advent series, where we examine a challenge in scaling Tech for Good startups: how the influx of investment can overshadow their original social impact goals.
Many Tech for Good companies begin with a passionate commitment to societal improvement. They develop innovative solutions, build an MVP (Minimum Viable Product), and gather a dedicated user base, all fuelled by a desire to make a positive difference. But the next step – scaling up – often brings a significant change.
As these startups seek funding for expansion, they frequently welcome investors and board members whose primary focus is on financial returns. This influx of capital is crucial for growth, but it often comes with strings attached. The investors’ emphasis on profitability can start to overshadow the company's initial social mission.
Unfortunately, the presence of profit-focused board members can lead to a gradual shift in the startup's priorities. Decisions that were once driven by social impact considerations might give way to those favouring revenue generation and market expansion. It’s a delicate balance – Tech for Good startups need to maintain the integrity of their social objectives while satisfying investors' demands for financial returns. And sadly, many don't find the balance.
This shift highlights a critical challenge for Tech for Good startups: can they grow and attract investment without compromising their core mission of social good?