Last week, my daughter Chana and I attended the SEEED Conference on Social Entrepreneurship at Brown University. It was an amazing gathering of those doing, funding, supporting, working in and for social businesses. These are Chana's thoughts on the first day of the conference. Chana is 13 years old and in 7th grade. Yes, I am a proud mom and find her insights cut to the chase.
While the entire SEEED Conference (Social Enterprise Ecosystem Economic Development) was interesting and enlightening, by far I found the panel “Core Elements for Building a Social Enterprise Ecosystem” the most intriguing. The varying beliefs and experiences of the panelists were highly educational and made the experience all together enjoyable. Dan MacCombie, co-founder of Runa, in particular, cut down to the basic fundamentals of social entrepreneurship by stating the devotion his company had for their cause. There was also discussion over funding for these enterprises, and finding the balance over providing funding for a company based on their cause or the structure of the company. Overall the points were fairly addressed, even with the occasional run-on answer. The metrics of social enterprises were discussed, the overall topic discussion ending when Dan pointed out that the best way to communicate a social enterprise's success and outcomes are (for now) a good story.
Interestingly enough, I pulled more information from that hour and a half panel then I would have from any given day at school. I now have a good enough idea of social enterprises that I feel comfortable weighing in on a conversation or offering up my thoughts. I do believe that funding social enterprises can be extremely difficult. On one hand, an investor doesn't want to invest in a company whose cause they don't believe in. On the other hand, it can be risky to invest in a social enterprise whose company is doomed to fail or doesn't have a stable enough business plan to succeed. It can be very difficult to find that silver lining, especially when the companies are interested in convincing you to invest, and not providing a complete image of how their enterprise actually runs. There is also the fact that in a social enterprise the focus is on the cause, not on pleasing investors. Those who have invested may not receive dividends since this money will most likely be redistributed into the company. For this reason many investors choose to distribute their money into a regularly functioning enterprise versus a social one.
These reasons are why I believe that Allen Kramer and Gladys Ndagire, plus their team, have created something special. What they have created is a $50 Million investment fund whose focus is solely on social enterprises, the New England Impact Capital. They are set to create a list of criteria to help to help them decide which companies to invest in. Seeing the amount of trouble investors have when it comes to social enterprises, this venture capital will benefit both the investor and the company by choosing social businesses whose causes are just and promises a return on investments similar to the average venture capital firm.
The SEEED Conference had given me an understanding of the importance of social enterprises, as well as the difficulties that come when choosing to invest in them. I think it is important for the investor to have full faith in the company and it's cause, as well as the enterprise's stability and business plan. This is why an investment fund based solely on social enterprises like the one Allen and Gladys are creating is not only an exceptional idea, but would provide support for budding social enterprises as well as a safer way to invest.