Francisco Noguera

From Social Capital Markets: Social Entrepreneurs Turning Into Sustainable Organizations

SocapMonday afternoon sessions just kicked off with the panels on each of the three tracks at SoCap08. The “Social Entrepreneur Track” is of special interest to me, as it concernes the tools and skills needed to turn social entrepreneurs into sustainable and scalable organizations that can scale and successfully serve the poor.

Paraphrasing Moses in one of his recent posts, the questions is how to turn will to serve the poor into skills to do so in a sustainable and scalable manner. The first panel in this track was on “Building a Business Plan”, featuring panelists Kevin Braithwaite, from RootSpace, a business incubator based out of Lebanon and Kirsten Gagnaire, an advisor with the Social Enterprise Group.

A quick raise of hands at the start of the panel shows what could be an accurate diagnostic of this sector: When asked how many in the room were “early stage social entrepreneurs”, around 80% of the room rose hands. A few minutes later Kirsten asked how many were currently functioning organizations and only a third of the initial hands went up this time.

The need is clear: A solid business plan is not the answer but is a critical part of thinking about and considering the critical issues needed to build thriving ventures.

Questions from the crowd were directed at understanding the main differences between “conventional business plans” and those for social enterprises. The panelists suggest it is important to start with the basic template from business schools because, from their experience, it is often hard to discern whether or not these are viable businesses.

Kirsten’s recommendation is to start with a 100% business-oriented mindset, figure out if it works as a business by itself, what the business model is and then add how it intersects with social/ environmental benefits perspective. This recommendation resonates with those of Mark Beckford, in his recent post here in NextBillion.??

Other interesting topics were brought about, including the balance between profits and social returns, effective ways to express and communicate the social impact or social return on investment of a business model, the “right kind” of investors to look for.

In this case, the panelists’ suggestions leaned towards elaving a detailed calculation of assessment of the ’SROI’ for later on in stead of spending valuable resources on it in an early stage of development. (As a side note, I just saw Sara Olsen, from SVT Group earlier today, one of the most active figures in this space as far as social/ environmental indicators is concerned).

The following panel in this track, starting as I speak, concerns “How to Pitch your Organization”, the natural next step after building a solid business plan. The first is a very interesting question: how do you acually get to the pitching stage? How do you get an invitation? As I write, I am listening and learning about Investors’ Circle, represented by one of the panelists. It is an organization with that exact mission: determine whether or not a given business plan is appropriate for a pre-determined group of investors. Worth checking out in more detail…

Other answers to the same question include more “conventional” strategies, if you will, which include cold calling and the use of networks. The difficult aspect is not so much “how to get there” but getting it right in “who to get to”. In other words, are you pitching to the right audience? Once you are there, how to capture the attention of the investment panel?

The huge crowd at both panels, the amount of questions and the quality of the panelists are a positive sign and a good caveat for the character of the conference as a whole: as this new “asset class” continues to take shape, more and more social entrepreneurs are abandoning that stage and turning into social ventures and viable organizations.

It’s 3 o’clock. The panel just broke out, time for a break. Stay tuned, more later!?–? ?