VCs Are Focusing More on Purpose and Less on Profits — Here Are the 5 Things They're Looking For in Founders

Entrepreneur

3 days ago

As venture capitalists become more purpose-driven, businesses need to be aware of the traits they expect to see in founders they see a future with.
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Venture investors are adapting to the times, and are increasingly open to working with Al technologies and investing in both new and emerging sectors such as longevity and wellness, areas of the global economy which have seen over 75% more funding in 2023 and projected to reach $8 trillion by 2030 according to a recent UBS report.
Trends are showing that venture investors are also becoming more conscientious in choosing their startups. With Environmental, Social and Governance (ESG) factors rising to importance among investors worldwide, according to an article written by an expert from EY, it is increasingly apparent that purpose-led investors are gaining traction in the VC space too.
An article written on BusinessCloud summarises that one of the main reasons why investors are betting on purpose in 2025 is that purpose-led companies "deliver profits, are transparent and, more importantly, resilient." A study conducted by B Lab Global showed that B Corp companies, which operated on principles on sustainability, outperformed ordinary businesses in revenues.
As an entrepreneur and a venture investor myself, I am also driven by a deep sense of purpose: to help more people achieve a longer health span across the globe. I carefully select to support other entrepreneurs and brands who share my vision. The more aligned my values are with a startup entrepreneur's, the more likely we are to begin a partnership together to achieve our common goals.
This is how venture investors are increasingly thinking about their future endeavours. I am keen to help others in the community understand the five key factors that entrepreneurs need to possess to capture the attention of a purpose-led venture investor.
Related: Doing Well by Doing Good — How Purpose-Driven Entrepreneurs Are Changing the World
1. A leader with a strong vision
Regardless of whether investors share the values exuded by a business venture or not, it is crucial for an entrepreneur to exhibit a strong and clear vision for their startup from the get-go.
A visionary entrepreneur would have a strong sense of purpose and direction for their business, and this will also be a trait shared with the purpose-led venture investor themself.
An entrepreneur's eloquently communicated vision for their startup, together with an honest picture of the business's current framework, strengths and opportunities, will help the investor visualize the future that they could help create by investing in the business themselves.
It is common knowledge in the VC world that although investors rarely accept deals, they almost never budge away from the entrepreneurs they believe in. And these entrepreneurs often begin their pitch with a powerful vision statement that investors can't stop thinking about.
2. A business built on trust
One of my most important beliefs is that trust is like a mirror — once broken, it simply can't be pieced together again.
A purpose-led investor operates on trust and therefore will expect the entrepreneur standing in front of them to think the same way. An entrepreneur will have to show the investor that the start-up thus far has been successful because of the meaningful relationships it has built on, whether these are with employees, contractors or most importantly, the customer base.
A business built on trust is one that is constructed with precision and a lot of care. It also indicates long-term growth and longevity for the entity, as opposed to it being one that burns bridges with overly risky transactions and bad decisions. In a nutshell, trust is the main driver of success for a business.
Related: Purpose-Driven Companies Grow 3 Times Faster — So Here's How to Become One Without Sacrificing Profit.
3. Understanding the servant leadership style
Purpose-led investors look to partner with individuals with strong conviction, not only in terms of business ideas but also in terms of the leadership style they practice. An entrepreneur who embraces the servant leadership style is one who focuses on serving the greater good, who prioritizes the health, well-being and success of people and the communities they serve.
I have practiced the servant leadership style in my career, and it is a humbling experience, as it is all about being a leader who leads without prioritizing their own ego. There are three Cs to becoming a servant leader, and that is about: compassion, character and competence.
While it is not compulsory for entrepreneurs to exhibit this leadership style, I believe that at least understanding its philosophy will be beneficial. This is especially for when entrepreneurs deal with purpose-led investors who will be attracted to qualities such as authenticity, integrity and a desire to support others in an entrepreneur, especially when they pursue a business with a purpose.
4. Commitment to measuring social impact
A startup wanting to create a social impact is an attractive prospect, but what's more important is whether it can sustain itself financially in the long term without compromising its ideals. This is where entrepreneurs need to include in their pitch a way to measure the impact they will be creating and how that will effectively translate into ROI for the investor.
Showing a commitment to measuring the impact a company has created means that the entrepreneur is dedicated to learning from any mistakes that might occur and ensuring that the original intent of the business is not lost.
Purpose should also not be taken for granted, as without methods to measure impact, companies can later on be privy to public accusations of impact washing. So you've also got to walk the walk. Research shows that 60% of brands with purpose-driven initiatives are not measuring their impact on society. It's best to be wary of statistics like these and stand out as a startup that not only has a vision but also has the framework to produce tangible results.
Related: Most Startups Ignore This One Asset That Makes or Breaks Their Success
5. Good market knowledge
This goes without saying, but most types of investors will expect entrepreneurs to know their target market, understand their competition and have a good grasp of the trends that are dominating the sector they are interested in.
A good knowledge of the regional cultures associated with their intended markets is also an important factor for an entrepreneur, as purpose-led investors often favour an internationalist outlook.