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Are there other ways to secure funding for a social enterprise other than pure venture capital or other commercial strategies?

Posted on

November 23rd, 2023

For social entrepreneurs, the quest for capital to kickstart or expand their ventures is a recurring challenge. Breaking away from the notion that impact, and profit are inherently at odds, there's a growing acknowledgement that the two can indeed coexist for mutual benefit. However, unlike traditional businesses, social enterprises face an additional layer of complexity in accessing funds. Investors in this space must weigh both financial and social missions, often in the absence of clear success stories, due to the innovative nature of these enterprises. The question arises: Are there alternative models for accessing capital beyond the conventional paths of venture capital (VC) or commercial plays, recognising the distinctive nature of social enterprises?

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Diverging from the well-trodden path, social enterprises embark on a mission-driven journey that demands a funding approach aligned with their unique values. There are options like angel investors, motivated by ideological considerations, who prioritise social missions, offering not just capital but ongoing support. Crowdfunding, facilitated by platforms, unites participants based on a shared belief in the social mission or business model, weaving a collective fabric of support.

Financial institutions, holding substantial capital, pivot towards financial returns with a keen eye on risk mitigation, deviating from venture capitalist's appetite for higher risk. Investment funds, characterised by large capital pools, seek steady, long-term growth, demonstrating a conservative approach toward low-risk investments. Non-profit foundations and grant-making organisations emerge as essential allies, recognising and supporting initiatives dedicated to the greater good.

Community financing stands out as a potent avenue for forging connections with individuals who share values. This not only raises funds but also cultivates a loyal customer base. Government programmes and subsidies contribute to the mosaic, providing financial support at various levels and reflecting a growing understanding of the vital role social enterprises play in societal betterment.

The burgeoning realm of impact investing attracts those seeking financial returns intertwined with measurable social or environmental impact. Here, clarity in articulating impact metrics becomes paramount. Social Impact Bonds (SIBs), a collaborative effort between governments, private investors, and service providers, presents an innovative model where success is contingent on the effectiveness of social programmes.

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Yet, within this diversity of funding options, social entrepreneurs struggle with challenges unique to their mission-driven endeavours. The question of whether there are alternative models for accessing capital gains prominence. To get into these intricacies, a masterclass titled “Raising Capital for Your Socially Responsible Business Venture,” hosted by Spurt! on November 28th, emerges as a beacon. This masterclass is a direct link to a network of key players in the social enterprise funding landscape. The facilitators aren't just experts; they are individuals actively involved in granting funds. By participating, you will access firsthand knowledge, receive personalized feedback on your approach, and significantly increase your chances of securing the capital needed for your social enterprise.

Register now: https://bit.ly/RaisingCapitalforBusinessVenture

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