Get to a point where you NEED to raise capital - Daniel Uusitalo, 4impact capital

Daniel Uusitalo is an investor at 4impact capital, a venture fund backing Pre-seed to Series A startups in Europe that solve problems relating to Planet & People. Daniel brings a wealth of international experience across startup investing, consulting, and corporate banking risk, having held various operational roles in startups from Austria to the UK. Having worked across many new domains, often under high levels of uncertainty, Daniel has developed several core principles that guide his current role.

“In consulting, especially at the start of your career, you are staffed on lots of different projects across different industries. You need to get good at picking up context quickly. I would say that my experiences from sales have been some of the most useful, especially in developing a competitive mindset.”

‍

When assessing potential impact opportunities, Daniel looks for three primary values in founders: “a drive towards building scalable impact, personal connection to the mission and ambition.”

‍

Beyond the team, a pitch stands out to him when it features “clear data-driven slides, with rational storytelling around things like value propositions. Why does your customer need this? Why are they willing to pay X for it? Why are you the one to deliver this solution?

I also greatly appreciate transparent and comprehensive evaluations of competitive landscapes. If you are omitting several notable adjacent competitors, it can signal insecurity in your proposition. Not wanting to be held side by side with them. A strong solution will generally stand out.

Always be ready to discuss why you need funding. In a time where developing prototypes of various solutions has never been easier (and cheaper), why do you need to raise?”

‍

Among some of the most common mistakes founders make when pitching, Daniel adds, are that they are “falling into the trap of “If only X then Y” when it comes to funding. 

For a truly ambitious and driven team working on a software solution, getting initial customer commitments should not require significant funding. Get to a point where you practically NEED to raise capital to service clients. 

Venture capital funding is not for everyone. You can build truly transformative companies, and make meaningful exits without needing venture backing. There’s pros and cons to everything.”

‍

Regarding scalability, Daniel believes this is industry-dependent but insists that impact-startups can reach the same heights as any other tech business.

“For solutions targeting truly systemic problems, the ceiling for growth is by default quite high. 

Building your company around themes like fighting a global bottleneck around climate change adaptation, or healthcare efficiency places you in a large pool, with lots of room for growth. 

I would think about any solution in terms of the problem it is solving, and the respective market size. Scoping and positioning is the thing that matters the most. Are you serving a problem for a small minority, or a systemic challenge that resonates globally?”

‍

When it comes to expanding internationally, Daniel adds that there isn’t much difference between scaling impactful solutions compared to more generalist ones.

“At least in the context of software solutions.

International expansion through existing multinational customers, and warm introductions through investors can be a good way to do it.  There is generally no one size fits all approach.

Depending on the sub-set of impact you are operating in, there can be quite significant differences in how different segments perceive impact. 

In the current market environment in the US, it may make sense to position yourself more firmly around optimization/efficiency, as opposed to CO2 reduction, even while delivering the same solution.”

‍

Going back to his point that not all investing solutions are applicable to all type of impact startups, Daniel recommends to founders to also “seek out grants, get in touch with family offices and angels that resonate with the problems you are solving. 

VC funding is genuinely not right for everyone, and there is no dishonor in going down an alternative path to the “startup norm”.

Bootstrapping, especially considering the tools available to us today, is becoming increasingly feasible. Use the tools at your disposal.”

‍

Finally, we wanted to learn Daniel’s take on how the impact-driven startup ecosystem might evolve in the next 5 years and what trends or technologies he’s excited about.

“I think many of the most transformative (and frankly, successful) ventures in the next 5 years are going to emerge from sectors like energy and healthcare. Tackling systemic issues, and creating positive outcomes. 

Some of these segments will seize to be viewed as “impact” investments. I simply don’t see why investing in renewable energy needs to be defined under a category that is often synonymous with philanthropy. These are huge markets and opportunities. 

All in all, I hope to see a blending of impact into more industries, including ones where we may not often see it.“

‍

Thank you, Daniel Uusitalo!