Social Enterprise Funding: Impact Investing, Angel Investors and Venture Capital
What is it?
Impact investing is a newer term and a big buzz phrase in social enterprise right now. According to GIIN, impact investing is basically "investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return."
Angel investors are usually affluent individuals who have money (capital) for your social enterprise to start-up, usually in exchange for convertible debt (debt that will be converted to equity later) or ownership equity (equity in your social enterprise now).
On the other hand, a venture capitalist is an investor who either provides start-up or growth loan capital or equity capital.
How do you get it?
The GIIN's Investors' Council has a large list of impact investors.
Investor's Circle has opportunities for impact investing in select US states.
You can also check out B-Corp Fund!
“The B-Corp Fund is a social enterprise venture capital fund that provides up to $250K in direct financing or participates in syndicated investments that are registered as certified benefit corporations:
Access to over $250 million in committed capital for investment
Exposure to early growth stage benefit corporations
Social and environmental impact, with a positive investment return
Targeting media and internet, branded food and beverages, and consumer products
To contact B-Corp Fund, please email email@example.com.” - http://www.bcorpfund.com
Interested in impact investing for yourself? Search Impact Base's online database to get started.
Social Enterprise Funding: Non-traditional and other ideas
Your church or faith-based group may have a budget for local missions, and could support your social enterprise efforts.
A local rotary or other business networking group may have opportunities for annual grants or loans for start-up of your venture.
Host an event! Ticket sales, silent or live auctions, and raffles can be a great way to generate cash. Don't forget - you can sell your social enterprise product at the event too! With events, be cautious about how much time you spend on it, or it could be a losing battle.
As with any of the options mentioned here, make sure you're following your local laws on fundraising, taxes, etc.
What else? How have you funded your social enterprise start-up and growth? What has worked well and what hasn't? Let me know in the comments below!