As early stage funders, our goal at New Media Ventures is to leverage relatively small amounts of money for a large impact.
Understanding this impact can be complicated– we don’t work on a specific issue, where progress can be tracked. Instead, we envision a world in which entrepreneurs have resources at every stage of growth to build media and tech startups that solve big civic and political problems, spanning a wide range of issues and sectors.
Given this complexity, I think about our impact in three ways: first, the financial impact we have as funders and investors; second, the social and political impact of the portfolio that we fund based on the metrics below, and third, the impact of our program and community building work to build out the sector.
Financial Impact of New Media Ventures’ Investments
First and foremost, our impact is through the direct funding we grant from our fund and the investments we oversee through our funder network. This is the easiest metric to track; working with a network of around 50 funders, we have moved around $4.6 million into a portfolio of 21 startups. Here is a bit more about how that breaks down in our portfolio:
Furthermore, because we usually represent the first money into a startup, or our members’ play a lead role in an investment round, we often are able to act as a validator and catalyst to additional funding. For some startups, our role as a validator has been crucial– entrepreneurs have raised additional funds at our annual NMV Summmit, or have benefited from a funder introduction or behind-the-scenes recommendations and rallying we do on their behalf. However, for others in the portfolio, our role in leveraging additional funding or support has been negligible.
This variance in the additional financing that we have leveraged makes this extra financial impact hard to measure, but it is a large part of our impact as an organization and worth noting here.
The Social/Political Impact of our Portfolio
As funders, our primary social and political impact is through the organizations and companies we fund. However, the entrepreneurs we fund use a wide variety of metrics to measure the impact of their work, making it challenging to come up with a quantitative understanding of the collective impact of the NMV Portfolio and then in turn linking our own success to those metrics. We tend to see entrepreneurs focusing on three areas in metrics that they report: breadth, depth and campaign wins.
Breadth metrics focus on the reach of an organization or company, often measured by the number of members on an email list or the number of monthly unique visitors to a website. Because we focus on media, these are important metrics– tracking how many people a message has reached. But they are also vanity metrics.
Depth metrics focus on measuring how active a community is, from the number of returning visitors to a website, or the number of people who repeatedly share content or campaigns. SumOfUs recently shared their own new metric that they have created to track depth: MeRA, or Members Returning for Action, the number of unique members who have taken an action other than their first one.
Wins tell the story of what happened because of specific action or media coverage. In online organizing, campaign wins are easy to distinguish– usually they are predetermined before the campaign begins, marked by a specific call for action. However, it can also be difficult to attribute a causal link between the win and the campaign, as a variety of external factors are often at play.
Building a Market for Progressive Innovation
The final part of New Media Ventures’ impact, and I will admit that this is my favorite part of our work, is ensuring that the impact of the NMV is greater than the sum of its parts– that we work to build out the market for progressive innovation. We can do this in two ways: deepening the connections within our community, and amplifying the work of the portfolio to bring more funding and resources to the sector as a whole.
Deepening our community
I know personally how hard it is to get a social venture off the ground, having labored two years on a startup before making the tough decision to shut it down. Entrepreneurship can be a lonely, tough road, and building a community of support around you during the early years is critical. Funders and investors need community too, as financial decisions can be both deeply personal and complex, and it is helpful to have a community to learn from others when making funding decisions.
And, funders and entrepreneurs have a lot to learn from one another. Both are passionate about driving social change, both have different and complementary assets to make that change possible. We continue to work to deepen our community at NMV, through our annual NMV Summits and NMV Family Dinners. Our goal is to build a community that can provide financial, educational and moral support for both the entrepreneurs in the NMV Portfolio and the funders who fund them.
Amplifying the work of the sector
We also work to amplify the work of our portfolio and the current opportunities for entrepreneurs looking to launch startups in this sector. Political impact investing is so early in its development as a field. We believe we can attract more people and resources to this growing sector by demonstrating the power and impact of the NMV Portfolio. From presenting at conferences like SOCAP, Personal Democracy Forum, the Lean Startup Conference and Women Donors Network, to hosting Startup 101 trainings and the Great Netroots New Tools Shootout at Netroots Nation, we continuously look for ways to demonstrate that there is a robust and vibrant market building for progressive startups.
Whew. There you have it. The messy, complex way we think about making impact by funding startups driving progressive change. We’ve been inspired by folks like the Unreasonable Institute, Echoing Green, and Code for America, who have been incredibly thoughtful about how they understand their own impact, and hope this sheds a light on our perspective.