Social Venture Capital
Encyclopedia
Social venture capital is a form of venture capital
investing that provides capital to businesses deemed socially and environmentally responsible. These investments are intended to both provide attractive returns to investors and to provide market-based solutions to social and environmental issues. Social venture capital can refer to debt, equity or mezzanine investments in socially oriented enterprises, which includes BoP (Base of the Pyramid)-targeted efforts to stimulate economic development in the poorest regions of the world.
Among the firms that deploy "social venture capital" are: Acumen Fund
, Grassroots Business Fund
, Tandem Fund, Bridges Ventures, Citizen Capital, Triodos Bank
, Calvert Group, Gray Ghost Ventures, The New Economics Foundation
, Social Venture Capital Fund, Venturesome Fund
, Social Venture Partners, VenturEast BYST Growth Fund, ennovent, Social Venture Fund, Aavishkaar, LGT Venture Philanthropy and Good Capital.
Social venture capital is a form of venture philanthropy
and impact investing
. Organizations providing services to the SVC sector include I-DEV International (management strategy, business scaling, portfolio improvement, and exit strategy) to GIIRS, which is an initiative sponsored by the Rockefeller Foundation and others to create standardized metrics by which to compare social investment performance and criteria. Further service providing services are Aspen Network of Development Entrepreneurs (ANDE) and the European Venture Philanthropy Association (EVPA), an association that covers venture philanthropy funds in Europe that finance charities, revenue generating social enterprises and socially driven business. These growing services are indications of the SVC sectors' increasing popularity and development. While many of the first round of SVC funds established, did so with a largely non-profit, socially oriented focus (vs. one focused on profitable returns and long-term success), funds are beginning to increasingly recognize and put weight on the importance of exit strategy, ROI (financial Return on Investment) and SROI (Social Return on Investment), which includes conducting greater due diligence into investments and supporting capacity building or technical training for portofolio company management.
Venture capital
Venture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
investing that provides capital to businesses deemed socially and environmentally responsible. These investments are intended to both provide attractive returns to investors and to provide market-based solutions to social and environmental issues. Social venture capital can refer to debt, equity or mezzanine investments in socially oriented enterprises, which includes BoP (Base of the Pyramid)-targeted efforts to stimulate economic development in the poorest regions of the world.
Among the firms that deploy "social venture capital" are: Acumen Fund
Acumen Fund
Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Its aim is to help build financially sustainable and scalable organizations that deliver affordable critical goods and services that improve the lives of the poor...
, Grassroots Business Fund
Grassroots Business Fund
The Grassroots Business Fund is a non-profit based in Washington, DC. It has field offices in Ghana, Kenya, and India. Their mission is to build and support high-impact enterprises that provide sustainable economic opportunities to thousands of people at the base of the economic pyramid...
, Tandem Fund, Bridges Ventures, Citizen Capital, Triodos Bank
Triodos Bank
Triodos Bank N.V. is a bank based in the Netherlands with branches in Belgium, Germany, United Kingdom and Spain. It is a pioneer in ethical banking. Triodos Bank finances companies which it thinks add cultural value and benefit both people and the environment...
, Calvert Group, Gray Ghost Ventures, The New Economics Foundation
New Economics Foundation
The New Economics Foundation is a British think-tank.NEF was founded in 1986 by the leaders of The Other Economic Summit with the aim of working for a "new model of wealth creation, based on equality, diversity and economic stability"....
, Social Venture Capital Fund, Venturesome Fund
Venturesome fund
CAF Venturesome was founded in 2002 in the UK and is an innovative pioneer of financial instruments for supporting social enterprises - and is an example of the growing market for funding social entrepreneurs...
, Social Venture Partners, VenturEast BYST Growth Fund, ennovent, Social Venture Fund, Aavishkaar, LGT Venture Philanthropy and Good Capital.
Social venture capital is a form of venture philanthropy
Venture philanthropy
Venture philanthropy, also known as philanthrocapitalism, takes concepts and techniques from venture capital finance and high technology business management and applies them to achieving philanthropic goals.Venture philanthropy is characterized by:...
and impact investing
Impact investing
Impact investing refers to investments made based on the practice of assessing not only the financial return on investment, but also the social and environmental impacts of the investment that happen in the course of the operations of the business and the consumption of the product or service which...
. Organizations providing services to the SVC sector include I-DEV International (management strategy, business scaling, portfolio improvement, and exit strategy) to GIIRS, which is an initiative sponsored by the Rockefeller Foundation and others to create standardized metrics by which to compare social investment performance and criteria. Further service providing services are Aspen Network of Development Entrepreneurs (ANDE) and the European Venture Philanthropy Association (EVPA), an association that covers venture philanthropy funds in Europe that finance charities, revenue generating social enterprises and socially driven business. These growing services are indications of the SVC sectors' increasing popularity and development. While many of the first round of SVC funds established, did so with a largely non-profit, socially oriented focus (vs. one focused on profitable returns and long-term success), funds are beginning to increasingly recognize and put weight on the importance of exit strategy, ROI (financial Return on Investment) and SROI (Social Return on Investment), which includes conducting greater due diligence into investments and supporting capacity building or technical training for portofolio company management.
See also
- Venture capitalVenture capitalVenture capital is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as...
- Socially responsible investingSocially responsible investingSocially responsible investing , also known as sustainable, socially conscious, or ethical investing, describes an investment strategy which seeks to consider both financial return and social good....
- MicrofinanceMicrofinanceMicrofinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed, who traditionally lack access to banking and related services....
- Angel Capital
- Corporate Venture CapitalCorporate Venture CapitalFrom September 2007 to April 2009, the financial services industry dominated the headlines and had a disproportionate impact on the world we live in. Given the profound effect that the financial services industry has on all areas of the global economy, it is important to understand this industry...