Starting Social Enterprise Ventures in HK:

1. Starting Social Enterprise Ventures in HK: Developing Platforms & Incubating Strategies Lessons from the UK! Sheena Pentin November 2010

2. What I will talk about today • The bigger picture • UK marketplace • A challenging environment for social enterprises • Four fundamental ingredients for a successful social enterprise • ClearlySo and its position within the UK market • Crucial role of the intermediary in the social enterprise sector

3. Sustainability is today’s key problem

4. …..and the old models for dealing with big problems are failing Government Charity Business

5. Individuals are taking power into their own hands

6. Social Enterprise in the UK • Around 62,000 social enterprises in the UK according to the Annual Survey of Small Business UK 2005-2007 • Small and medium social enterprises contribute £24 billion to the UK economy • Social enterprises employ more than 800,000 people across every sector

7. Social Enterprise Recession-BustersGrowth in Turnover Compared with SMEs

8. Social enterprise is an increasingly important part of the UK’s economic and social landscape • Social enterprises are profitable Despite economic downturn two thirds of social enterprises are making a profit • Social enterprises vary widely in scale, but scalability is key. Some are very large with turnovers > £100 million 17% had turnovers in excess of £1million Source: State of Social Enterprise Survey 2009, commissioned by Social Enterprise Coalition UK

9. Successful social enterprises

10. UK Government supports social enterprise David Cameron Prime Minister, February 2009 ‘We need to give more power to civic institutions like social enterprises, because we desperately need your innovation to tackle social breakdown’ Nick Clegg, Deputy Prime Minister, March 2010 ‘Social enterprise is a shining example that good business sense and social responsibility can go hand in hand’ BUT • Very reliant on Government for past 15 years • >£350m of public money spent on supporting social enterprise* • Social enterprises have relied on grant funding and below market-rate loan finance • 92% of social enterprise founders lack a business background* • Limited private investment *Young Foundation Social Ventures Intermediaries Report Oct 2010

11. KEY opportunity for social venture intermediaries to help social businesses become profitable and scalable The sector is well-advanced in the UK but: • Over 30% of social enterprises are less than 5 years old* • Median turnover is just £175,000* • Only one in ten social enterprises currently operating on a national scale* * State of Social Enterprise Survey 2009

12. Variety of roles for social venture intermediaries and there are many in the UK… • Finance and investment • Business management expertise and training • Providing networking opportunities • Cutting-edge research, measure of social impact • Early stage innovation

13. What is the environment for mainstream companies? • In a typical business: • Banks • Angels/VC • Stock Markets • Professional Networks • Professional services • Publicity Entrepreneurs get what they need to “cross the chasm”

14. What is the environment for social businesses in “crossing the chasm”? • In the social business • sector: • Few banks • Few angels/VCs • No market for shares • Nobody to help who knows what you need • Nobody knows you Here is where we saw our opportunity!

15. A new era of investment is underway Risk Risk Social Impact Return Return Social impact enters the investment mix

16. Crucial considerations for success of a social enterprise • Raising capital • Building an effective team • Sales & access to market • Financial management and control

17. The first global marketplace for social enterprise and investment • Dual objectives – to help social businesses and enterprises to succeed whilst building value for shareholders • Multi-purpose platform

18. First online marketplace

19. : Social business & enterprise, commerce and investment marketplace ii SBEs Corporations Investors Pioneers

20. Social businesses and enterprises on the ClearlySo website

21. Connecting corporations with social enterprise • Sponsorship of conferences and events • Sponsorship of training workshops, SE breakfasts • Prime source of knowledge and information about social business & enterprise • Procurement via social enterprise • Selling products & services to social enterprises

22. ClearlySo is expanding outside of the UK

23. Market challenges • Infrastructure: number of SEs and structure • Level of understanding of social enterprise • Investor readiness of the businesses • Access to social financing • Bridges to business and academic sectors • Public policy and government support

24. What can you do as a social enterprise intermediary? • Capital alone will NOT make a business successful, focus on the team, sales and financial management too! • It is hard work and requires persistence. • No one organisation can do it all! : The Connector

25. Thank you! For further information on ClearlySo please contact me: sheena.pentin@clearlyso.com