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Investing with Purpose Practice & Experience. Richard Biggs, D 3 Jubilee April 16 th , 2013. What is a Social Enterprise?. What is a Social Enterprise?. What is a Social Enterprise?. What is a Social Enterprise?. What is a Social Enterprise?. Many definitions For Profit / Non-profit.
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Investing with PurposePractice & Experience Richard Biggs, D3Jubilee April 16th, 2013
What is a Social Enterprise? • Many definitions • For Profit / Non-profit
What is a Social Enterprise? • Many definitions • For Profit / Non-profit • Local / Global
What is a Social Enterprise? • Many definitions • For Profit / Non-profit • Local / Global • Impact Intrinsic/Extrinsic
What is a Social Enterprise? • Many definitions • For Profit / Non-profit • Local / Global • Impact Intrinsic/Extrinsic • In Common:
What is a Social Enterprise? • Many definitions • For Profit / Non-profit • Local / Global • Impact Intrinsic/Extrinsic • In Common: • Seek improvement for the Most Vulnerable
What is a Social Enterprise? • Many definitions • For Profit / Non-profit • Local / Global • Impact Intrinsic/Extrinsic • In Common: • Seek improvement for the Most Vulnerable • Innovative
What is a Social Enterprise? • Many definitions • For Profit / Non-profit • Local / Global • Impact Intrinsic/Extrinsic • In Common: • Seek improvement for the Most Vulnerable • Innovative • Market-based Solutions
Why is Vulnerability important? • Exposure to external shocks
Why is Vulnerability important? • Exposure to external shocks • Financial crisis/misfortune • Education fees • Critical illness • Death
Why is Vulnerability important? • Exposure to external shocks • Financial crisis/misfortune • Education fees • Critical illness • Death • Environmental crisis • Natural Disaster • Famine • etc
Why is Vulnerability important? • Exposure to external shocks • Financial crisis/misfortune • Education fees • Critical illness • Death • Environmental crisis • Natural Disaster • Famine • etc The Bible Isaiah 58:6-7 Is not this the kind of fasting I have chosen: to loose the chains of injustice and untie the cords of the yoke, to set the oppressed free and break every yoke? Is it not to share your food with the hungry and to provide the poor wanderer with shelter - when you see the naked, to clothe them, and not to turn away from your own flesh and blood?
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations
Why is Innovation important? • Philanthropy vs Corporations • Social Entrepreneurs need to find Market-based solutions to situations where Customers may be Unable to Pay, and secure funding from Non-Traditional sources
What is a Social Enterprise? • A For-profit company that creates social impact which is intrinsic to the business model Impact-focused SE Miracle Company Social Impact Profit-focused SE Profit
Financing Social Enterprises • For companies to grow, they need Capital • IMPACT INVESTING
Financing Social Enterprises • For companies to grow, they need Capital • IMPACT INVESTING Impact Investing is the process of actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor. (Monitor Institute)
Financing Social Enterprises • For companies to grow, they need Capital • IMPACT INVESTING Impact Investing is the process of actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor. (Monitor Institute) Principles of Investment Warren Buffett’s rule #1: Don’t lose money. #2: Don’t forget rule #1. Impact
Financing Social Enterprises • For companies to grow, they need Capital • CAPITAL FLOWS
Financing Social Enterprises • For companies to grow, they need Capital • CAPITAL FLOWS Investors
Financing Social Enterprises • For companies to grow, they need Capital • CAPITAL FLOWS Investors Entrepreneurs
Financing Social Enterprises • For companies to grow, they need Capital • CAPITAL FLOWS Investors Entrepreneurs CAPITAL
Financing Social Enterprises • Many Barriers to Capital Flow Investors Entrepreneurs CAPITAL
Financing Social Enterprises • Many Barriers to Capital Flow Scale Investors Entrepreneurs CAPITAL
Financing Social Enterprises • Many Barriers to Capital Flow Scale Sophistication Investors Entrepreneurs CAPITAL
Financing Social Enterprises • Many Barriers to Capital Flow Scale Sophistication Investors Entrepreneurs CAPITAL Commitment to Profit
Financing Social Enterprises • Many Barriers to Capital Flow Scale Sophistication Investors Entrepreneurs CAPITAL Commitment to Profit Financial Viability
Financing Social Enterprises • Many Barriers to Capital Flow Governance Scale Sophistication Investors Entrepreneurs CAPITAL Commitment to Profit Financial Viability
Financing Social Enterprises • Many Barriers to Capital Flow Governance Scale Sophistication Investors Entrepreneurs CAPITAL etc Commitment to Profit Financial Viability Commitment to Impact
Financing Social Enterprises • Need to Remove Barriers Governance Scale Sophistication Investors Entrepreneurs CAPITAL etc Commitment to Profit Financial Viability Commitment to Impact
Financing Social Enterprises • For Impact Investing to become a sustainable channel for funding social enterprises…
Financing Social Enterprises • For Impact Investing to become a sustainable channel for funding social enterprises… Barriers to Capital Flows must be removed
Financing Social Enterprises • For Impact Investing to become a sustainable channel for funding social enterprises… Barriers to Capital Flows must be removed HOW?
Financing Social Enterprises • Investing is about TRUST
Financing Social Enterprises • Investing is about TRUST • Trust involves RISK
Financing Social Enterprises • Investing is about TRUST • Trust involves RISK • Risk is about UNCERTAINTY
Financing Social Enterprises • Investing is about TRUST • Trust involves RISK • Risk is about UNCERTAINTY • Uncertainty can be overcome with INFORMATION