Dollar bills sprouting from a lawn of green grass.

Greenbacks: Attracting capital can be key to scale a sustainable start-up, but is often hard to achieve

The sustainability start-up scene is incredibly exciting right now, with a new generation of entrepreneurs fired up to tackle environmental issues. 

However, raising capital to expand can be a knotty problem. 

A third of firms surveyed by the Enterprise Research Centre at Warwick Business School sought equity finance in 2022-23, but less than half were successful. 

This is where a venture capital firm like Two Magnolias can come in. The firm was co-founded by Jessica Rasmussen, who has 30 years experience in investment banking as a global markets expert.

Jessica holds an MBA from Warwick Business School and is co-chair of the WBS Sustainability Professional Network.

As an impact investor, around half of the early-stage businesses in Two Magnolias' pipeline are led by entrepreneurs offering sustainable products and services. 

Every fund offers a slightly different process for firms aiming to attract investment, but here is Jessica's advice for start-ups based on what she looks for. 

1 Be curious 

"Filling out the form on our website is just one route into our pipeline," says Jessica. "We also meet founders through pitch events, university incubators, and regional networks across the UK. 

"As a rule, you have just eight seconds to get an investor’s attention and two minutes to make them stay, so prepare yourself and refine your message before you make contact. 

"By the time you are done, they need to be in a position to go away and share your business idea and model with their colleagues. If they can't do that, you are not going to get very far. 

"We want entrepreneurs who dream, then look at the reality, and dream again. Don’t just find one solution and focus on that - keep looking for new solutions. 

"The way we live is going to fundamentally change in the next 10 years and we want to invest in the people who are going to drive that change."

2 Be clear

"When a company shows promise, we invite them to a formal pitch," says Jessica. "This is a 30 to 45-minute session, typically supported by a 10 to 15 slide deck. It’s not Dragons’ Den – we want founders to feel relaxed – but clarity is key.  

"At this stage, we are looking for a clear representation of the problem you’re trying to solve, followed by a clear articulation of your solution.  

"Early-stage entrepreneurs often fixate on issues that aren’t commercially viable. If your ‘passionate project’ only offers a solution for a thousand people or so, it’s unlikely to be scalable for us. 

"Venture capital is not philanthropy. We’re looking for companies that can deliver outsized returns."

3 Be transparent

"Roughly 30 per cent of firms make it to the second pitch," adds Jessica. "This session lasts up to 90 minutes and dives deeper into how you will deliver your solution and your financial model.  

"At this point, transparency is critical. Many founders project exponential growth – from tens of thousands of pounds in revenue to tens of millions by year four. That’s ambitious, and we need to understand how you’ll get there. 

"Authenticity matters too. Don’t mask weaknesses or exaggerate your story. We can spot it a mile away. The more honest you are in answering our questions, the better your chances.  

"If you’re not ready for venture capital, we’ll monitor your progress – sometimes for months or years. 

"The journey isn’t easy. Many small firms backed by venture capital funds fall by the wayside because the customer base is not there, trends change, or competing products come in. But when it works, it can be transformative.

"We are launching a new funding round in 2026. Our investment size will range from £200,000 to £1 million, and for an early-stage company, that can be a huge win.

"Our mission is for our founders to be successful so they can invest in research, scale their company, and contribute to solving some of the planets most pressing problems."

Capital without compromise for green founders

Michelle Sartorio is the award-winning founder and CEO of the impact-centred beauty brand Auê Natural Limited and the growth consultancy True Value Creation.

She holds an MBA from WBS, is a member of the School’s Sustainability Steering Committee, and recently led the Embrapa AgriZone panel discussion on beauty and the bioeconomy at COP30 in Brazil.

These are her top tips for sustainable start-ups seeking investment to help them grow.

1 Be ready, not rushed 

"Before seeking investment, ensure you have clear proof of concept," says Michelle. "A strong minimum viable product (MVP), traction, and credible sustainability metrics demonstrate readiness. 

"Visibility matters too. Attend events, apply for awards, and publish your perspective on LinkedIn and channels that are typically targeted at investors. These steps build both credibility and momentum. 

"Finally, understand the cost of capital - whether dilution or control – and assess if venture investment is right at your current stage. Capital should accelerate purpose, not compromise it."

2 Network strategically 

Michelle adds: "Having spent two decades in sustainability and investment, I’ve learned that raising capital is not just about funding, it’s about alignment. The right investor will amplify your mission, not dilute it.

"Mapping investors by style, stage and values takes time but pays off. My first raise was completed quickly with like-minded angels, and my next will follow the same path.

"Use every network available: from universities to your professional circles. In 2023, only around eight per cent of UK deals went to all-female founder teams, so strong, purpose-driven networking is key."

3 Tell a powerful story 

"Your story is your most strategic asset," says Michelle. "Investors increasingly evaluate narrative fit alongside growth potential. Ensure your story connects directly to the value they seek to generate.  

"I look for partners who are strongly aligned with Auê Natural’s mission - promoting consumer health and environmental regeneration through rainforest-powered, plastic-free beauty. 

"But authenticity must be matched by performance. The product must work, the market must care, and your results must be measurable."

Further reading:

The authentic founder: How to stay true to your values

The key leadership skills for small business growth

Three ways to nudge customers to buy green products

Why human relationships are key in venture capital

 

Discover the benefits of joining the WBS Sustainability Professional Network. Warwick Business School has seven professional networks and a range of regional networks to help our international alumni community to share their expertise and forge meaningful connections around the globe.

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