The VC PreSeed Ventures have pioneered early-stage investing in Denmark and Southern Sweden by backing and actively supporting tech start-ups in the pre-seed and early seed stage for more than two decades. They have assisted
Written by Sneha Dasgupta
Sep 14, 2021 / 7 min. read
The ESG Napkin
A tailor-made tool to help create companies that put humans first.
We actually believe that we have a responsibility […] to leave the planet a better place to live than we found it, we call this our human-first approach.
— Alexander Viterbo-Horten
Investment Director at PreSeed Ventures
The VC PreSeed Ventures have pioneered early-stage investing in Denmark and Southern Sweden by backing and actively supporting tech start-ups in the pre-seed and early seed stage for more than two decades. They have assisted 400+ tech-driven start-ups, including Trustpilot, Vivino, Lunar and Nøie, many of whom have shared their stories at TechBBQ Summits over the years.
Recently, PreSeed Ventures unveiled their tailor-made ESG framework: ‘The ESG Napkin’, with the ambition to enable early-stage tech companies to integrate responsible ESG practices into their business in the early days rather than waiting until the more mature stages of growth. They want to ensure that “purpose and profit can go hand-in-hand” from day one in the companies that are built today, shared Alexander Viterbo-Horten, Investment Director at PreSeed Ventures in an ESG ToolTalk at PSV Academy.
And can you believe that 58% of 1,100+ meta-studies found a positive correlation between ESG incorporation and positive outcomes for companies and investors!
So, do you know what the ESG criteria are?
ESG criteria are a long list of non-financial factors within 3 main areas that focus on the non-financial impact a company would have in the world, and aids in identifying the opportunities and risks associated with it.
🌳 E: Environmental —
Focuses on the conservation of the planet and natural resources; the company’s take on climate change, carbon emission, waste generation, energy use, etc.
👯️ S: Social —
About people, human relations and social structures; diversity, inequality, employee well-being, human rights, consumer protection, etc.
💰 G: Governance —
About business standards and legal practices of a company; shareholder rights, tax strategy, accounting standards, audits, etc.
With the increasing focus on ESG in the corporate landscape and the entire global society, acknowledging, defining and integrating ESG goals in a tech startup would not only have financial benefits but will also be a strong asset for gaining investor attention as well as recruiting & retaining top tier talents.
A glimpse into the ESG Napkin framework
The ESG Napkin is created following multiple interviews with both founders and experts in the field coupled with both intensive research and team at PreSeed Ventures’ experience from screening and investing in early-stage startups for two decades. Alexander explains that “[the ESG Napkin] aims to help early-stage tech companies get a grasp on how they could actually be working with ESG factors in order to build their companies better [at the MVP, pre-seed, and seed stage]”.
Moreover, their research also highlights the importance of integrating the ESG practices to avoid ESG structure debt: since the work that needs to be carried out to fix it increases dramatically with the growth of the company.
As Alexander says, “It’s just like technical debt – if you’re building and growing your software product on a crab code foundation, it becomes increasingly difficult to fix it at a later stage”.
The ESG Napkin by PreSeed Ventures
The Napkin outlines 10 key ESG themes that are paramount to be working with, in the early stage of the tech company: team, product, market and legal sections. Each theme identifies the most important areas and KPIs to focus on in the different stages of maturity.
Psst! Wondering how to get started?
Don’t worry! Head over to the PreSeed Ventures’ booth at the TechBBQ Summit to get recommendations for getting started and personal insights into the ESG Napkin framework. You can check out their website for a few business case examples from Alexander Viterbo-Horten as well!