This is the fourth post in a 5 part series. Check out Part 1, Part 2, Part 3, & Part 5

Why Give a Damn:

“Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?”

Steve Jobs uttered those words to John Scully in prying him from PepsiCo to run Apple. A year later, Apple came out with what is widely considered the best TV commercial of all time. But the job of a CEO is to create commercial success in the marketplace. And the legal obligation of a corporation is to translate that commercial success into maximum shareholder value. So I looked up what happened during Scully’s tenure at Apple, and was surprised at what I found. Not only were investors and employees better off with Pepsi stock than Apple; they were six times better off:

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You might be saying to yourself, yeah, but, The Choice of a New Generation™ is clear:
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To which I might reply, yeah, but, Apple is a wolf in sheep’s clothing and at least Pepsi is trying and has commitment from the CEO.

There’s no use in arguing about whether to choose Pepsi or Apple, because if you are reading this, I know you know it’s a false choice. You know that making a difference and making money are not mutually exclusive. You know there is a revolution going on called social enterprise, and possibly you are already involved. You know that more and more everyday people are choosing conscience over profit, both in where they work and where they invest. You know that it’s possible to increase your profits by doing the right thing, as Ray Anderson’s TED talk so eloquently demonstrates. And finally, you know that after a certain point, more money doesn’t necessarily make you more happy, but having a purpose and feeling connected to your fellow humans does.

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You know all this, and you see that in the future, any for-profit company that ignores social and environmental impact, does so at the great peril of their profits. You see that old-school philanthropy is dead, and that any non-profit which doesn’t use market forces to achieve their mission, and which doesn’t have financial sustainability baked into its plan, well, they’ll be dead soon enough.

So, what’s stopping the revolution from spreading? A recent Harvard Business Review article suggests that “the biggest obstacle to scale for the social sector is [a] lack of effective funding models.” I agree. And here’s why I believe crowdfunding is the answer:

  1. Karen the Bus Driver proved that a crowdfunding platform can evoke empathy and deep human connection online and at scale;
  2. Pebble Watch proved that pre-sales crowdfunding can raise more money in several days than a year-long investment roadshow would ever yield;
  3. Unreasonable Marketplace proved that people everywhere will donate to a for-profit company that is doing good;
  4. Kiva proved that the 300 Million poorest entrepreneurs in the world are ten times more creditworthy than the average college student in the U.S. (1% default rate for Kiva, 9-13% for U.S. student loans)

The 2012 Crowdfunding Industry Report shows that crowdfunding is beginning to be a significant source of capital, and that the growth of crowdfunding is accelerating:

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Keep in mind, this momentum has been building despite the fact that the $30 Trillion in long-term investment capital in the U.S. is still off-limits. Some other tantalizing figures:

  • Equity investment crowdfunding grew at 300% last year, compared to the overall crowdfunding growth rate of 91% you see above
  • The amount of money worldwide in long-term investments is over $200 Trillion
  • Crowdfunding is already 10% of the size of the VC market, and some say crowdfunding will eclipse VC in short order.

After funding models, I believe the biggest turning point will come when we each start consistently choosing “Apple” over “Pepsi” in these key decision areas: the products we buy, the companies we invest in, and where we choose to work. Because choice really is clear:

Apple > Pepsi

In the end, a business is about the products it chooses to bring into the world. And in the final analysis, sugar water and plastic waste are part of the problem, and the products Apple creates are part of the solution. You know this. I know this. And so does the crowd:
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Unreasonable Challenge

This Shirt Helps is a for-profit social enterprise that exceeded its crowdfunding goal in just 56 hours after opening its campaign:
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Your challenge is to figure out the keys to their success by studying their campaign page, posting what you learned in the comments below so everyone can learn.

I am Senior Vice President of Business Development at Crowdfunder, a leading investment crowdfunding portal. I’m also an angel investor, advisor and friend to many of the people and companies I mention by name. If you’re interested in learning more about my world or want to connect, please visit

Rafe Furst

Author Rafe Furst

Rafe is an entrepreneur, impact investor, writer, producer and poker player. Beginning in Silicon Valley in the mid-1990s, Rafe has founded, invested in and advised dozens of startups, including Pickem Sports, Full Tilt Poker, and Crowdfunder. To date, his companies have generated over $1 Billion in revenue and $450 Million in liquidity to stakeholders. An avid poker player, he’s won a World Series of Poker Championship, produced an award-winning instructional video, and has helped raise millions of dollars for cancer prevention and other charitable causes. Rafe is a pioneer in Quantitative Venture Capital, a nascent field based on the convergence of equity crowdfunding, complexity economics and securities law reform.

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