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Social Innovation Lab 1: Social Enterprise: Investment & Funding 3rd Annual Asia NGO Innovation Summit, Seoul, South Korea, 13 - 15th June 2012

14th June 2012

Vijay Pratap Singh Aditya, New Delhi, IndiaCo-Founder & Chief Executive Officer

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Introduction

Globally Social Enterprises have caught imagination of development actors, government and investors alike.

Genesis of the 'idea' of a 'social enterprise' comes from the quest of creating sustained impact of initiatives on communities.

Enterprise based operations mode allows social organisations, professional management of service delivery, building of scale and introduction of latest and appropriate technology in the value chain for enhanced productivity and sustaining the initiative.

Enterprise mode of operations necessitates generation of revenue and surplus (profit) to meet cost of operations, mitigate costs escalations in markets, management and administrative costs, business development and expansion costs, while ensuring provision for depreciation, technology improvement, environmental and other social costs.

While successful social enterprises have shown scale and sustained growth and impact, however generic templates of success are unavailable to give enough legal and economic basis for improvement in business registration, tax and financing mechanism across most countries of the world.

A range of intermediary structures called “hybrids” exists across the world trying to evolve successful business models.

Amongst all issues, funding and investment remains most critical for most social enterprises.

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SI Lab 1: Social Enterprise Investment & Funding

Introduction to the discussion agenda for the Lab – Vijay Pratap Singh Aditya, CEO, ekgaon technologies, India

Social Investment for Social Enterprises – Sunit Shresta, Founder, ChangeFusion, Thailand

Ants Sponsor project as Social Funding (Crowd Funding) – Aran Kim, Beautiful Foundation, South Korea

Interactive Discussion – Speakers and Lab group delegates

Sharing with other delegates in different social innovation labs

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Investment or Funding: Need Vs Want

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What & When: The decision of raising funds

Scale of a SE is important to determine, WHEN is the right time to go for raising investment

The decision on WHAT financing is right one for the SE is dependent upon amongst other factors on 1) Legal status of SE as per the laws of the land 2) Business vision (Plan) of the SE 3) Financial structuring of the SE including ownership structure

Any SE seeking to raise investment have to get the right answers to these questions before making a choice

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When to Raise Funding

Stage of SE – More then number of years in operations, it is important to understand the scale vs envisioned scale

Seed Stage – Ideation, prototype and testing the pilot

Start Up – Successfully tested idea whose technical and financial viability in pilot is established

Growth Stage – For growing the enterprise to achieve scale

Public Financing Stage – raising investment from public finance institutions or capital markets

Sustaining Stage – enterprise revenue and impact in expected line with investor interest

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What to Raise?

Based on the stage of the enterprise, a range of financial products are available (however not accessible)

Seed Stage – Angel Investment, Grants, Awards, scholarships and recently crowdsourcing

Start Up – Venture Capital (Including Social Venture Capital), Angel Investment, Government Programmes, Long-term debt (convertible to equity) instrument offered by semi-government instruments, INGOs and Developmental investment arms of global financial institutions (like the GBF of IFC, The World Bank), JICA etc. and recently crowdsourcing

Growth Stage – Venture Capital (including Social Venture Capital), Banks, Financial institutions, INGO funds, government programmes inter-agency programmes such as the European Commission and IFC.

Public Financing Stage – Share markets - IPO

Sustaining Impact Stage – Various debt instruments for working capital management, sales on books, revenue flow, reserves and investments

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For inquiry please contact

Vijay Pratap Singh Aditya, Chief Executive Officer

ekgaon technologiesE 142 A, Lower Ground Floor, Kalkaji, New Delhi - 110 019, India

tel: +91 11 4055 1490 | fax: +91 11 4055 1491

email: info@ekgaon.com | web: www.ekgaon.com

Regional Office (South India)

Door No. 14/6, Opposite BSNL Exchange, Ellis Nagar, 20 Extension Road, Madurai - 625010, Tamil Nadu, India

tel: +91 452 4368094 | telefax: +91 452 2602433 | email: info@ekgaon.com | website: www.ekgaon.com

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