How we evaluate the scale of impact in early stage startups

How do you measure social impact? It’s a deceptively simple question and one that often comes up quickly in conversations with early-stage investors, yet resists straightforward answers. 

What does it mean to compare the impact of a fintech product versus a civic-tech platform? How do you evaluate the difference between helping someone build credit and helping someone participate in an election? And more practically, how do you decide where to allocate limited capital when both outcomes are important? 

These aren’t just abstract questions; they influence real decisions.

Consider the following two companies.

Esusu, a fintech startup, helps people report on-time rent payments to major credit bureaus. It takes something millions of people are already doing—paying rent—and transforms it into a pathway for building credit. For individuals with limited or poor credit histories, this shift can enable access to lower-interest loans, better financial products, and a more stable financial footing. To date, Esusu has helped tens of thousands of people overcome a barrier that has traditionally limited access to opportunity.

‍Motivote operates in a very different domain. It’s a civic-tech platform designed to guide people through the voting process - offering personalized reminders, deadlines, and, at times, small incentives for participation. Its users are significantly more likely to vote than the average person, indicating that small interventions, applied at the right moment, can meaningfully boost civic engagement.

Both are focused on creating impact. Both address real constraints within their respective systems. However, they function in entirely different contexts, with different timelines, different measures of success, and different paths to sustainability.

So the question remains: how do you compare them?

There are, of course, established frameworks for evaluating social impact created by organizations like the Impact Management Project, Toniic, and Sopact. They provide depth, rigor, and a common language for measurement. 

Early-stage companies don’t always fit neatly into these models. At the earliest stages - often before $100K in revenue - there is limited data available. Outcomes are still developing. Systems are still taking shape. The signals that matter most tend to be directional rather than definitive. In such situations, precision can become a distraction. What’s needed instead is a way to assess potential without over-relying on data that doesn’t yet exist.

Over time, after reviewing a range of early-stage ventures, a simpler approach began to take shape. Not a scoring system, exactly. More of a way to orient the conversation.

We center our analysis around three questions:

1. How deeply does the product affect the day-to-day life of the person using it?
2. How broadly does it influence the systems around it?
3. How easily can it scale without losing what makes it effective?

Each dimension can be observed, even when the data is still incomplete.

• Depth reflects how meaningful the change is to an individual user. 
• Breadth indicates the extent to which that change affects others beyond the individual. 
• Scalability becomes more apparent based on how the product is designed, what it requires, and what it can support over time.

Rather than assigning precise scores, these dimensions are better held more loosely: high, medium, or low. Not because nuance isn’t valuable, but because false precision can create more confusion than clarity, especially when comparing across industries.

At this stage, the goal isn’t to rank impact with exactness. It’s to understand where it’s likely to take hold and whether the surrounding system can support it.

Here is what we ask startups to define impact:

Individual Impact

How much is a person’s life improved by using the product? Rate “High”, “Medium” or “Low”, please provide an explanation.

1. High: life altering impact on a daily basis for an individual
2. Medium: moderate and consistent improvement to an individual’s life
3. Low: infrequent yet meaningful impact in someone’s life

‍Systemic Impact

Which systems would be improved and by how much if the product is adopted widely? Rate “High”, “Medium” or “Low” and explain why.

1. High: systems that affect tens of millions will be significantly improved long term (e.g. US financial system)
2. Medium: systems that affect millions (e.g. Illinois education system) will be moderately improved for the long term
3. Low: if adopted widely, systems that affect hundreds of thousands (e.g. DC housing system) will be mildly improved in the long term

‍Scalability

How easily can the product be adopted widely, if demand is there? Rate “High”, “Medium” or “Low” and explain why.

1. High: easily adopted by hundreds of millions of people
2. Medium: easily be adopted by tens of millions of people.
3. Low: is not easily adopted by more than a few hundred thousand people.

‍How we compared Esusu and Motivote on our three-point scale.

Individual Impact

Esusu scores high on individual impact.  

• Esusu helps people with low to no credit save money and build their credit score, which disproportionately affects black and brown communities and people of color. Esusu impacts both the financial stability of an individual’s life and the inclusivity of the U.S. economy by aiding in the disruption of the cycle of high-interest and predatory loans.

Motivote low for individual impact.

• Motivote, on the other hand, improves the likelihood of voter turnout by arming people with voting deadlines, a plan to prepare for voting day, and enrollment of universities, employers, friends, and family. While increased voting turnout allows U.S. democracy to function at its best with a government more accurately representing its community, most elections only occur every two or four years. An app informing individuals on how to vote and easily access voting  information is great, but does not immediately result in an improvement to daily life.

Broader System

Looked at from a systems view, Motivote and Esusu both rate high.

• Esusu’s product influences the credit scoring system to adopt more inclusive measurements like rent reporting, which benefits a huge swath of the population. Credit scores are a cornerstone to the financial health of everyone in the U.S., and more than one-third of all households are rented.
• Motivote increases voter turnout in elections where even a few additional percentage points can lead to significant changes in election results and public policy. Every system, financial, health, education, etc. is governed by who we vote for. Increasing voter turnout impacts the main system which affects the rest of our systems.

Scalability Matters

Both Motivote and Esusu are easy to access online and can register new users in minutes, earning both a high rating for scalability.

• Esusu has tens of thousands of users across dozens of states and is growing rapidly everyday.
• Motivote can onboard any university or corporation within an hour.
• Neither are limited to providing their service to a particular geography. Once profitable, these companies can rapidly self perpetuate their impact nationally and globally, potentially improving the lives of hundreds of millions of people within a few short years.

Focusing an impact evaluation on breadth, depth, and scale enables a robust comparison of the potential impacts of startups across different industries with very different approaches. While we may not see the full range of their impact for a few years, we are among those who want to see these impacts realized.

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