Are you a Social Entrepreneur with a strong passion to run an enterprise that has an exceptional social and/or environmental impact? Are you looking for growth capital?
We are keen to share our know how, especially when it comes to increasing and expanding the social impact of your company. Our expertise is to find the right financing solution for you to ensure the sustainability and social impact of your business.
We offer you:
1) Preparation of investment readiness
- Preparing investment readiness by developing your business model and your business plan towards financial plausibility from the point of view of future investors
- Identification of the right financing model to structure your financial needs (including a plan how to integrate various investors)
2) Consultancy in all questions of planning, preparing and closing a growth financing
- Suggestions for the right financing strategy and financing model
- Support when compiling all necessary documents for investors (e.g. teaser, investment memorandum)
- Selection and approach of suitable investors (e.g. business angels, social investors, banks, foundations, private investors) that fit to the financing model discussed
- Management of the entire investment process
- Support during negotiations with potential investors
More information about our target group can be found further below.
FASE combines philanthropic and return-oriented capital with the goal to develop hybrid financing tools for social entrepreneurs. Examples of such hybrid tools are:
- Equity donation with loan: Social Entrepreneurs can rarely offer enough securities to take on a loan. A private donor, for instance, could offer the necessary equity as a donation. This donation can then be leveraged with a loan coming from a bank, a foundation or other investors.
- Success premium for social impact: A business angel can provide a social enterprise with quasi-equity (“mezzanine capital”) or with a loan at a low (fixed) interest rate. Additionally, a philanthropic investor (e.g. a foundation) pays a success premium that depends on the social impact achieved by the social enterprise.
FASE acts as an advisor to social enterprises. In this role, we support social enterprises in need of growth capital to successfully address their social and ecological challenges and to enhance their overall social impact. The following criteria are prerequisites for our support:
Outstanding social impact:
– The business model offers a clear strategy to solve a social and/or environmental problem
– The social impact can be measured and documented (e.g. by SRS, social KPIs)
– The business model is scalable
Sustainable business model with growth potential
-The proof of concept is already achieved, e.g. through a pilot project
-The financing needs for growth are higher than 200,000 EUR
-The business model generates earned income, at least partially (for example through the sale of products or services, or member contributions); we can’t support social enterprises that are only financed via donations
If all of this is true for your social enterprise, we will be pleased to develop a suitable financing strategy with you.
Social enterpreneurship in Europe is still relatively young but continues to gain momentum. For example, despite the fact that about 1/3 of Ashoka Fellows are investable, and 1/3 could become investable within two years (McKinsey and Ashoka analysis for Germany, 2011), very little deal flow is happening today, holding back the true potential of solutions that could impact millions of lives.
find it hard to navigate amidst the many different funding sources available to them, and they often find it challenging to presend their ideas between different funders and to manage the expectations and conflicts between philanthropic and commercials. As a result, social entrepreneurs face significant gaps in funding along their project/business lifecycle, and fail to become “investment-ready” despite the fact that a lot of (pro bono) support is available to them.
Providers of social finance
find it difficult i) to find social entrepreneurs that match their specific investment requirements (i.e., most standalone social venture funds can only invest from €400,000 at 5% upwards), ii) to partner with other sources of capital (for example, venture funds could collaborate with foundations that help social entrepreneurs to become investment ready), and iii) to market their social finance offers effectively to prospective investees and co-investors. As a result, many social investors do not find the deals they are looking for (EVPA survey shows that funds of €1bn are available of which most is not invested in the way intended).
Funders often fail to meet the typical funding requirements between €50’000-250’000 of early to mid-stage social entrepreneurs. The single most important contribution is the establishment of an ecosystem around an open pipeline of investable deals for coalitions of philanthropic and social investors. This ecosystem requires a comparatively high investment of coaching, expertise and proactive matching at first, but deals will over time serve as models to the larger field, multiplying the initial effort.
A new social finance intermediary (the “open social investment pipeline”) was founded in January 2013 from within the Ashoka network, starting with a central coordination:
The Financing Agency for Social Entrepreneurship (FASE)
● identifies social entrepreneurs with great growth potential that could serve as models for others,
● mobilizes business angel and pro bono support to help with business cases and investment proposals,
● coordinates the development of term sheets outlining the impact and financing needs,
● brings together a variety of funders for each deal or group of similar deals,
● creates an open pipeline of deals, syndicating them in investor and angel networks,
● drives sector learning from these models.
In short, the initiative aims to bring together philanthropic and investing capital for the typical, “hybrid” funding, creating deal flow and closing typical funding gaps. Starting from the tight community of Ashoka Fellows and supporters, the pipeline equally includes non-Ashoka Fellows meanwhile.