Last week we hosted SEF sparks, where this time it was all about finance, and with us we had Oliver Holle, founder of Speedinvest, Peter Vandor, founder of the Social Impact Award and senior researcher at WU, Kristina Notz from the Social Entrepreneurship Akademie and Jakob Detering, Director of the Social Impact Award. Thanks also to the Impact Hub, who were kind enough to lend us their space for the event.
Now why finance, you may ask. Surely, when talking about social business, there are other aspects that are more important than money? Which is why finance is sometimes treated very much like the proverbial stepchild in the SE family. And while profit isn’t the highest goal in SE, generating a sustainable income stream is a vital part of the business plan.
The problem is, that very often there is a divergence between impact and profit, e.g. your profit gets smaller if your impact gets bigger and vice versa. Another issue is the question of scalability (which I hear is important to investors). As a SE, scaling impact is gonna be more important than scaling profit – which then leads to the question of how to measure impact in the first place.
So keeping all that in mind, how can you convince traditional investors to come onboard with SE? According to the wise words of our panel, on one hand Social Entrepreneurs need to be prepared to talk about money as well as their impact. On the other hand it needs gutsy investors who aren’t afraid to “invest out of the box”. Lastly, not all money fits every business – the plurality of structures in SE requires an equally large variety of investment logics/ approaches.
There is much potential still unused in Austria in the area of Social Entrepreneurship. Our panel nicely summed up how to spread SE even further through more initiatives, out-of-the-box thinking and collaboration across various backgrounds and areas to get out of our silos.