We often hear of large tech companies dabbing into the social entrepreneurship projects such as Google’s Project Loon and billionaires such as Elon Musk who are trying to make environmentally friendly projects such as the electric car more affordable, but many who want to work in that route often go it alone starting their own social venture start-up. Companies like google can afford to gamble on the odd project and they could easily increase funding on the ones that look promising but for many start-ups cash flow is a constant problem and it can be even harder for those where return on investment is not the main measurement for success. So, what do these companies do?
For most the problem arises with an identity crisis. These groups are a hybrid between NGOs and traditional start-ups, wanting to improve the lives of various communities while simultaneously seeking a return on their investment There are venture capitalist groups that focus on these projects such as London based Bethnal Green Ventures group which understand the difference between an NGO and a social entrepreneur and invest for a small stake in the company but there is much less money available compared to normal start-ups.
For those who want to change the world for the better my hat is off to you but for you to really make a difference you need to tell two stories, the good that you are doing and the money that you are making. These start-ups need to be telling the story that they are not a charity and they want their cut too, that being profitable and doing a good deed is possible. That will be the answer when potential investors ask the inevitable question, “Why not just become an NGO”?
The government as always can play an important role in this as well. Since these start-ups must make every dollar count it is important for government agencies of their respective countries to welcome these groups wanting to help the people of their country by making it easier for these groups to enter the country. For example, by lowering visa requirements and potentially offering tax breaks for the first few years of operating in the country.
Being a social entrepreneur is a noble but tough cause but if you can prove there is money to be made in your venture and that your dream may be possible, here’s hoping that you can make it happen.