The mission statement of startups claiming “to make the world a better place” may seem a cliché or even a paradox. However, in today’s world, a growing number of entrepreneurs are asking themselves “is it possible to make money and still make a difference in the world?”

Professor Filipe Santos (Católica-Lisbon) says that, traditionally, those ideas are part of separate worlds. “Companies seek profits by satisfying customer needs, while social economy organizations seek to share resources by helping the most disadvantaged. Successful entrepreneurs make money from their business, and then they can devote part of their profits to philanthropy. Companies can carry out corporate social responsibility activities, but separately from their core business”, he writes in an opinion article.

However, a new generation believes in entrepreneurship as a key tool to solve society’s problems. New companies are coming out with a social mission without neglecting their profit-generating goal.

This is usually called “impact entrepreneurship.” Impact entrepreneurs are driven by a desire to disrupt the status quo. They believe in starting businesses that make people’s lives better. Rather than selling products or services, they solve problems.

Professor Filipe Santos shares three examples in Portugal of impact entrepreneurship:

Book in Loop: a platform to share and resell second-hand schoolbooks.

Code Academy: provides the new generations with programming skills that increase their knowledge and employability.

SPEAK: a network in European cities for language teaching and cultural sharing to support the integration of migrants.

“What distinguishes impact entrepreneurship from traditional entrepreneurship is the way how the social mission drives the action and the implementation of practices that increase the creation and value sharing of the project, enhancing the long-term benefits to society and reducing potential damage”, professor Filipe Santos says.

Book in Loop, Code Academy and SPEAK received financial support from a 2.5 million euros Portuguese fund. Meanwhile, the impact investments already reached $115 billion in assets, according to a 2017 survey of the Global Impact Investing Network (GIIN).

“It is the beginning of the transformation of financial capitalism into a more humane and inclusive model of impact capitalism”, professor Filipe Santos comments.

He highlights that the “ambition to change the world has always been the main motivation of great innovators and business creators”. “However, this motivation of entrepreneurs is often undermined by the short-term dictatorship of the financial markets, which is driven by a more aggressive demand for profits. What is truly new in this decade is the rise of new financing models for these entrepreneurs, allowing them to grow and achieve impact and profit”.