While it can be tough to know where or how to invest, there are a plethora of options available for you to consider. Whether you index and chill, are an active trader, or prefer real-estate, there are options for everyone to build a diverse and well-rounded portfolio.
While index funds and individual stocks from well-established companies may be the most well-known methods, these investments may not always align with your values. In fact, there are a growing number of people who actively put their dollars where their values lay, and investing should be no different.
Enter impact investing, a field of investing where your dollars go to make an impact in the things you care about the most while also making you a decent return.
As the world begins to realize the devastating effects we’re having on our planet and each other, a growing number of companies are working hard to change that. Many of these companies are just getting started but are looking to preserve a bright future for ourselves and our world.
Below we’ll discuss some impact investing startups that you should consider for your investing portfolio.
What is Impact Investing?
Before we jump into impact investing startups, let’s first define what impact investing is.
Impact investing is an investment made into a company or organization that is looking to make a beneficial impact on the environment or society while also bringing a financial return. In other words, these companies are looking to address critical social or environmental issues.
Common impact investing issues that companies seek to address are renewable energy, healthcare, housing, education, agriculture, and mental health.
While the idea of philanthropy has been around for a while, impact investing is a relatively new term that emerged in 2007. It designates a commitment to measuring the social or environmental performance of the company rather than just the financial.
As with other forms of investing, there are many ways to engage in impact investing. However, for the purposes of this article we’ll be focusing on impact investing startups that are raising money through equity crowdfunding.
Equity crowdfunding is when a group of investors provide funding for the startup in exchange for equity in the company. While there is risk involved with investing in a startup, crowdfunding makes investing in these ventures accessible to the average person because the minimum investment is typically $100-$500.
The small minimum investments make it possible to invest in several impact investing startups if one chooses, which allows you to help fund the causes you believe in for relatively little risk.
Now that you know exactly what impact investing is and how startups raise money through crowdfunding, let’s discuss the impact investing startups you should consider adding to your portfolio.
Impact Investing Startups You Should Consider
First up is IX Water, a company which seeks to recycle contaminated water into usable water.
Currently, the processes for mining oil and gas results in a byproduct of large amounts of contaminated water. This water is then disposed of through deep well injections and open pit evaporation. These disposal methods are not only expensive, but harmful to the environment.
IX Water’s team will tackle this issue through the use of patented technology developed by scientists at the New Mexico Institute of Mining and Technology to turn contaminated water byproduct of the oil and gas industry into clean usable water. This recycling process is at least 50% less expensive than the current disposal methods and also allows water to be reused.
IX Water projects a potential $75 billion annual market opportunity for the treatment of 150 billion barrels of contaminated water produced by the oil and gas industry globally every year.
For a minimum investment of just $250, you could own equity in IX Water and help our world recycle our most essential resource. The company also offers other increment investments, many of which come with bonus rewards.
The next impact investing startup you should consider is MentalHappy, an online community offering tools and support for mental health.
Untreated mental illness costs around $300 billion a year, and more than 1 billion people suffer from mental illness. Despite these statistics, our healthcare system is difficult to manage, expensive, and inadequate in helping treat those struggling with their mental health. Compounding matters is the stigma still attached to treatment and therapy.
With the global telemedicine market exploding and the increased need for mental health support, MentalHappy is looking to fill this gap in an affordable and accessible way. Their secure online platform offers access to digital toolkits with guided content as well as online coaching with licensed professionals.
For a minimum investment of just $100.13, you could own equity in MentalHappy and help bring affordable and accessible mental health care to everyone. The company also offers other increment investments, many of which come with bonus rewards.
Next up is TerraCycle, a company revolutionizing recycling by recycling the unrecyclable. TerraCycle is a company that has been around for a while, but they’ve recently opened up new equity crowdfunding investment opportunities and may make a great addition to your impact investing portfolio.
Most are well aware of the trash that takes up landfills and collects in our oceans. While many items are easily recyclable, there is a great deal of waste considered “nonrecyclable.”
TerraCycle has built the processes for designing recycling solutions for almost everything currently considered waste, all while turning a profit. These “unrecyclables” are collected and repurposed into raw materials that can be used to make new products.
Unlike the other impact investing startups on this list, TerraCycle has become an established company with many major corporations as clients and is already paying dividends.
For a minimum investment of $700, you could own equity in TerraCylce and help protect our planet by investing in recycling all waste. The company also offers other increment investments, many of which come with bonus rewards.
The next impact investing startup you should consider is Solectrac, a company seeking to bring clean vehicles to the agricultural space. As the world seeks to move more toward renewable and clean energy sources, it will be imperative to extend this new technology into all sectors.
Farming currently relies on a variety of diesel-powered equipment to grow and harvest crops. Diesel fuel, along with the maintenance necessary to keep diesel equipment within pollution-restricting requirements, cost farmers billions of dollars each year. Additionally, greenhouse gas emissions from the agricultural section reach 6 billion metric tons a year and farmers commonly suffer from hearing loss and respiratory illness due to exposure to diesel equipment.
Solectrac hopes to bring a cleaner, quieter, and more cost-effective solution to the agricultural sector by designing and building electric tractors. Their line of all-electric tractors ranges from 25 to 70 HP and can be charged with renewable energy or via a 220v outlet.
For a minimum investment of just $250, you could own equity in Solectrac and help reduce the carbon footprint of the agricultural industry. The company also offers other increment investments, many of which come with bonus rewards.
The last of the impact investing startups we offer for your consideration is Life Imaging, a company seeking to revolutionize early detection and preventative treatment.
The U.S. has an expensive healthcare system that is reactive, preferring to prescribe expensive medications rather than to prevent disease before it takes root. Furthermore, many of the leading causes of death would be largely preventable if more emphasis was put on early detection and preventative care.
Life Imaging seeks to offer affordable early detection so that you can focus more on preventing disease than fighting it. Specifically, their FDA approved scanners can detect diseases such as cancer and heart disease before an individual begins showing symptoms up to a decade in advance. These scans use only about 10% the radiation of a normal CT scanner and take about 5 minutes to complete.
While full body scans typically cost thousands of dollars and are difficult to get prescribed or covered by insurance, Life Imaging packages cost a few hundred dollars a scan, making them an affordable option that could save your life.
For a minimum investment of just $200, you could own equity in Life Imaging and help bring more affordable preventative technology to everyone. The company also offers other increment investments, many of which come with bonus rewards.
Moral of the Story
There are so many options for investing now that it can be overwhelming trying to decide the where and how.
Having said that, if you’re someone who is passionate about putting your dollars into companies you believe in, then impact investing might be a great option for you.
We’ve presented 5 impact investing startups that are looking to improve the world while also helping you make money. IX Water and TerraCycle seek to recycle previously unusable waste products, Solectrac seeks to replace diesel farm equipment with electric, and MentalHappy and Life Imaging seek to improve your mental and physical health in an affordable way.
With the social, political, and environmental unrest in our world, it’s more important than ever to fund and invest in companies seeking to improve our planet and each other.
What causes are most important to you? Which impact investing startups are you considering adding to your portfolio?
Talk about Money Well Spent.