Social Ventures - what are they PDF Print E-mail
Tuesday, 11 January 2011 23:24

Many people engaged in the development sector, especially outside of California, seem unfamiliar with the concept of a Social Venture, so I thought I'd outline the concept and how I see it working best.

Charity doesn’t scale to meet the needs of billions, and corporate greed cannot be satisfied by the poorest of the poor, which is why basic human needs remain unmet despite the existence of (technical) solutions.

Between these two models lies the emerging area of Social Ventures.

A Social Venture operates like a business, but is driven by a mission rather than only by profit.   Social Ventures range from Non-profits with a business activity, through to Corporations acting responsibility, and it is somewhere in the middle – where the sweet spot exists for bringing new technology to the poor

In my ideal model, a company may raise a combination of grants and/or project-specific investment to develop an idea, prototype and commercialise it, and bring it to manufacture.

However ongoing sales of the product would be commercially viable, i.e. they could be manufactured and moved through sales channels to customers on basis that allows everyone along the chain to be compensated, and does not require ongoing subsidies.

The customer either has a price they can afford, or a suitable credit facility is setup with payback periods that allow the customer to pay off the loan in a reasonable period – typically from saved expenditure for example on water or fuel, or by increased productivity.

Partners – manufacturing, distribution, sales, investment, financing – may themselves be non-profits or commercial, and in many cases social venture partners exist in each of these categories, although there is still a key gap in finding investment or grants for early stage technology development that has an impact, rather than profit potential.

Budding Social Ventures might also like to check out the Hub, a growing network of co-work places that has been a great source of ideas and colleagues during my development of Natural Innovation.


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