New businesses may consider social value of their start-up when seeking financing

While many investors in new businesses are concerned with their financial return, a new trend shows that start-up capital is increasingly flowing to new ventures with a profound social mission.

An article in Business Week suggests that many venture capitalists are eager to support new businesses with both promising prospects for financial success, but also those that are contributing to the environment or social well-being on a larger scale.

According to the report, socially responsible investing in start-ups is especially taking off in clean energy, organic and natural foods businesses.

"There's more attention in this space, and with attention, more investors want to participate," says Deb Parsons, business development director at Investors' Circle, in the article. "It becomes less a fringe and more acceptable. In a few years it'll be closer to mainstream."

Socially responsible start-ups may also be able to use their niche businesses plan to help better market the business. Promotions and marketing activity can be geared to consumers more inclined to buy based on environmental or social missions and may also educate new customers on the benefits of the movement.

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