Impact Investment for Social Enterprise
Dr Jamie Newth a Social Enterprise Auckland board member and CEO of Soul Capital recently conducted a session to help social enterprises understand different opportunities available for investment funding, from grants through to Impact Investment, and how to determine the best funding model for a social enterprise. It was a unique opportunity for social enterprises to hear directly from funders and to understand what they look for when making judgements on investment opportunities. Social enterprises’ learnt the importance of a business model and how critical it is to have this developed before approaching investors; the need to understand and articulate the market opportunities for the enterprise; the importance of understanding and assessing the impact the enterprise will have socially or environmentally, with discussion around the need for a robust social impact measurement model to articulate impact to investors; and how investors look at the ability of an enterprise to scale.
Jamie facilitated a panel of investors and introduced the korero by outlining some fundamental principles of impact investing for social enterprise. He emphasised the point that social entrepreneurs need to ensure that they seek alignment between the investor, the type of capital, the investment instrument, for their enterprise and their business model. Misalignment of these dimensions is problematic for everyone.
David Woods from the Impact Enterprise Fund made the point that social enterprises need to consider how their investors can exit their investment and what time frame. Carl Vink from the Wilberforce Foundation talked about how his organisation do the full range of capital from grants through to equity investment and will accept lower rates of return where they believe the impact is high. Eve Jolly from Foundation North talked about their exciting new impact investment strategy and their geographic and issue based investment priorities.