NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, April 4, 2017

One of the most intriguing developments of the last 20 years is the rise of the “social enterprise” – a hybrid between a traditional private company and a charitable organisation that pursues a social objective through a business model.

One example is Tjacket, a Singapore-based company whose corporate partners include National University of Singapore, DBS, SE Hub and SE Association for Bridging Social Businesses. It provides wearable technology that simulates hugging to help calm adults and children with anxiety and related conditions so that they can function more effectively and independently.

Tjacket is among hundreds of social enterprises sprouting up in this region. Like their purely commercial cousins, social enterprises need access to finance and business advice along all stages of their growth towards sustained profitability. These usually come from angel investors.

Angels are typically high-net worth individuals with business acumen, often successful entrepreneurs or senior corporate executives. Perhaps more important than the equity they inject into a business is the practical advice they give an entrepreneur together with introductions to potential customers, suppliers and other funders.

Estimating the size of the angel investment market is notoriously difficult because many investments are undisclosed, individual deals. The US dominates the angel market – the University of New Hampshire estimates its size as US$24.1 billion in 2014 – with some 250,000 angels investing in 50,000 ventures.