When I started Listenwise four years ago, I didn’t know anything about raising capital. In fact, I was probably a little naïve about the fact that I would need to raise money to fund the business until revenue ramped up.
I’ve realized that finding funding and investors for an ed-tech startup with a mission is a bit different than for other businesses.
The revenue growth is slower in ed tech because sales cycles in the K-12 market are longer. This means no quick, easy exit for investors at some of the insane multipliers like we’ve seen with apps such as Twitter. Three years after Twitter was founded it was valued at $3 billion.
So, while we have the largest angel investment group in New England backing us, we have also found a group of investors that I didn’t expect.
Social impact investors. These investors care as much as the social impact of what you are building as they do about returns they hope to get.
At first I thought I wouldn’t be able to compete against startups tackling renewable energy, food security or poverty. How does building students’ listening skills with National Public Radio compete with those weighty social issues?