Lab Log

Very clever money

Sarah McGeehan - 06.03.2009

At last, social enterprises had an investor whose ambitions were as big, and values as deep as their own.

When the Lab helped launch the Bridges Social Entrepreneurs Fund last November, I knew in theory how valuable this new source of capital could be. At last, social enterprises had an investor whose ambitions were as big, and values as deep as their own.

But even I have been taken by just how much difference the Fund is making to its prospective investees.

In one case, the Fund Manager Antony Ross and his advisors have helped a charity with no prior experience to  source the ideal property for their expansion plans. They hand-held them as they learned what it took to be canny negotiations, and advised on navigating planning consents.

For a social enterprise with a wholly different business model, and a tight recessionary market to operate in, they brokered a deep discount with headhunters. Their aim? To help ensure a seriously seasoned retailer could join the board and bring perspective and confidence to the job of steering through choppy waters. It was unlikely the business would have been able to open this particular door themselves.

The Social Entrepreneurs Fund is already showing just how different the equity relationship is. Social enterprise lenders - with their high volume, low risk models - limit the amount of support they provide.  Risk capital turns that approach on its head, showing how closely they will collaborate with entrepreneurs to get the deal done. 

This is what I like to think of as 'very clever money', delivering untold value before even £1 of investment is made.