How to sustain in an ocean of competitors and with sharks always on your head.

Urgent issues like the climate crisis, environmental degradation threatening millions of species, social inequality and other challenges mean that the global economy needs to immediately transform itself to become sustainable.

Sustainable start-ups are showing us the way with smart business models having economic, social and environmental value.

Toronto’s Ripple Farms is an example demonstrating the power of aquaponics to sustainably produce organic greens and seafood throughout the year. To connect urbanites with the land, the company’s business model combines product offerings with education on urban agriculture.

Similarly, Waterloo Energy Products sells a full range of residential and commercial renewable energy designs including geothermal, solar, LED lighting equipment, water treatment solutions and much more. By offering a one-stop shop at its Sustainable Living Centre, they have made renewable energy choices much easier for consumers.

Both firms bundle products and services in different ways with a potential to expand internationally.

Many companies in Canada’s sustainable sector have similar potential to export Canadian products and expertise around the world.

Finding the right investor

But Canada needs these firms to grow rapidly and substantially so they can create jobs that other unsustainable businesses are shedding as they become obsolete. Investors are key to accelerating this urgently needed start-up growth in Canada’s sustainable sector.

According to the United Nations’ seminal Brundtland Report, sustainable development should meet the needs of current generations without compromising the capacity of future generations, ensuring a balance between economic growth, care for the environment and social well-being.

These three main components of sustainable development are considered together, not as separate goals. Good governance is required to ensure and oversee all three of them.

In this complex business environment, finding investors to scale up new companies and, even more importantly, finding the right investors, is challenging. Start-up ventures burn through cash rapidly as they aim for a sale of the company — usually to other larger firms or on the stock market through an initial public offering.

Raising funds to grow start-up companies is an ongoing challenge that pulls management away from running the business. By finding knowledgeable, committed investors who understand the business, a firm can ease the constant stress of raising capital while legitimizing the company to consumers, clients and stock markets.

Unfortunately, sustainable ventures face additional challenges when it comes to investors compared to purely for-profit firms because they appear to have multiple competing goals.

Stiff competition

Sustainable firms often face powerful well-established competitors — renewable energy firms, for example, must overcome obstacles in a world entrenched in oil and gas.

People are hesitant about new technology even if it improves their lives. The choice between fossil fuels and renewables is not unlike trading a typewriter in for a laptop. This fear of uncertainty gives traditional firms market advantages that new companies must overcome.