Giant Leap launches a calculator measuring how positive a startup’s work is

Giant Leap LR Adam Milgrom, Charlie Macdonald, Rachel Yang, Charlotte Moos, Will Richardson, Source: Supplied.

Venture capital firm Giant Leap has released Australia’s first impact calculator for startups, helping founders, VCs and investors measure a startup’s positive effect on people and the planet.

Talk to SmartCompanyAdam Milgrom, partner at Giant Leap, says that while it was easier to calculate the financial opportunities, the opportunities for impact were never alike.

“It’s very difficult to compare the impact a waste management business would have versus a healthcare business,” he said.

“We wanted a tool to compare and contrast startups that have different impacts. It also helps us compare whether the impact would be significant on a small number of people or more globally on a large scale.

According to Milgrom, Giant Leap wanted to understand who the beneficiaries of a startup are, how long the change will last, if the solution is good, and how much it will change the beneficiaries’ lives.

“We wanted a way to compare deep impact to broad impact,” he said, adding that based on the globally recognized impact management project framework, the company had worked on a calculator capable of measuring, evaluating and reporting the impact.

“As the prevalence of startups tackling our most pressing problems increases, this calculator is a good first stop for mission-driven founders looking to better understand the relative impact of their business,” Milgrom said.

To help understand impact, Milgrom highlighted the five dimensions of impact considered in the calculations. These include the problem the startup is trying to solve, who the beneficiaries of the intervention are and how underserved they are, how much help or change the startup will create, what contribution it can make, and the risk of negative impact.

Startups will have to complete a five-minute questionnaire, and will receive a score out of 300.

“Among the companies in our portfolio, we saw minimum scores of 140, average scores of 187 and maximum scores of 252,” Milgrom said, adding that Giant Leap only invests in companies that achieve at least the average score.

When asked what would give a company a low rating, Milgrom points to the possibility of a company being too risky for its impact, or when its impact is not enough to help people.

The startup may, for example, not help as many people or there may be a high risk of negative results. These negative outcomes could be as simple as requiring copper mining for a solar initiative.

“It’s not suited to the venture capital world we work in, but different investors or founders may be looking for different things.”

“We shared this [calculator] because we would like other people to use it… to help them discern which problems are more worth solving than others,” Milgrom said.

“For founders, this could mean thinking about how they can change their business models or their approach to have the most positive impact.”

Maria D. Ervin