If new sustainable businesses are to survive long enough to turn a profit and achieve their social or environmental impact goals, they need capital from early-stage private investors. “It’s the rocket fuel of impact investing,” said Tim Freundlich, president and co-founder of ImpactAssets, a nonprofit financial services company with offices in New York, San Francisco and Bethesda, Md.

Freundlich’s comment came while moderating a panel at last week’s 24th annual SRI conference in Colorado Springs, Colo. More than 550 advisors, institutional investors and high-net-worth individuals attended the three-day impact-investing forum.

Most company founders, including those with impact-oriented business, lack the means to bootstrap their startups. They also have difficulty getting bank loans because providing early capital is considered risky.

Few individual investors enter at this point, panelists said. Freundlich cited a recent survey by the Global Impact Investing Network, which found that only about 18 percent of self-described impact investors were doing some type of seed-stage investing. Freundlich said he thought the number was probably lower.

Panelists agreed that successful investing in young impact companies at least requires “patient capital”—not just identifying good prospects for investment, but also having a serious, long-term commitment to the social and environmental goals of these enterprises, while curbing expectations.

Seleyn DeYarus, chief executive officer of Best Organics, a Boulder, Colo.-based provider of organic gift baskets, said she seeks investors with a longer view. “I want to give investors a high return for choosing to put their faith in our business, but at the same time I'm also looking to grow a company that provides meaningful work, as an employer in our community,” she said.

Robert Fenwick-Smith, founder and senior managing director of Boulder-based Aravaipa Ventures, agreed that expectations of quick exits are not realistic. He has a 15-year horizon for businesses in his micro-fund, which focusses on Colorado early-stage efficiency technology companies that seek to minimize the use of scarce resources such as water. The family offices that invest in the fund take a generational view of building wealth, Fenwick-Smith said. These investors know it takes 10 to 12 years or more to build a profitable business, not the three to five years typically required by institutional fund managers. “As long as we address the right audience, we’ve seen no push-back for the timeframe,” he said.

Some family offices have told Fenwick-Smith that they consider regular dividends an acceptable outcome. “Financial success doesn't automatically need to be linked to an exit, as long as you can prove you're doing value creation as you go along,” he said.

Fenwick-Smith also said investors’ willingness to continue providing capital during tough times can actually lower the risk of investing in start-ups. He’s seen small companies in the impact space fail unnecessarily. “They died because of lack of funding. It wasn't because they didn't have a great idea or a passionate entrepreneur. It was access to funding, or having the kind of investors who were impatient,” he said.

Tyler Hartung, chief operations officer and co-founder of the Unreasonable Institute, reminded the audience that entities far past the seed stage can continue successfully for many years. The Unreasonable Institute is a Boulder-based organization that acts as a start-up “accelerator” and has worked with entrepreneurs from 37 countries who are tackling some of the world's biggest environmental and social problems.