Is There A Funding Gap in Impact Investing?
Are you a young professional? Want to start investing in companies that inspire you? You don’t need loads of money to be an investor. Just the right tools and mindset, according to this startup.
Synergy Social Ventures, a Hong Kong and San Francisco-based non-profit, has launched a program called the Future Funders Giving Circle, educating young finance professionals how to be effective philanthropic investors.
Founders Abbie Jung and Jana Svedova explain that the program enables 20 and 30-year-old professionals to spend one year learning about different social enterprise models, meeting founders, and volunteering their finance and marketing skills. After a year, the circle donates $50,000 to a business of their choice. They focus on startups in China and southeast Asia — areas that the founders say have been underserved and need more early-stage capital for socially-conscious companies.
I ask Svedova about these gaps in impact investing and how social entrepreneurs can do a better job executing their ideas.
Esha Chhabra: So an aspiring social entrepreneur comes to you. You don’t do seed capital. Where do you send that entrepreneur? Getting the first bit of cash to come up a with prototype or sample piece is often the hardest part, correct?
Jana Svendova: Yes, that is the hardest part. Aside from a few competitions with cash prizes, entrepreneurs often have to rely on their own savings or friends and family. This is also preventing smart and talented innovators without those means from pursuing their ideas. We’re missing out on a lot of potential impact there.
This is also a reason Synergy started our Future Funders program. We found that millennials/young professionals were comfortable with smaller and earlier stage funding for social entrepreneurs. Even though the amounts they contribute are much smaller in dollar value than larger foundations and philanthropists, the impact of these small investments is huge. It lets entrepreneurs get to that next step.