Help us to sow the seeds of Social Impact
In my ‘What Does Great Business Mean?’ post, I introduced you to two of our social enterprise success stories – Boston Body Hub and Recovery Hub Ipswich. Today, I share with you feedback we are getting from these and other local social enterprises about the frustration of finding funding. I introduce you to another inspiring social enterprise, GeneAdviser, too. Finally, I ask you, especially if you are a funding body, to contact me to discuss ways we can work together to help other social enterprises in the east of England …
Social enterprises (businesses that trade for a social and/or environmental purpose and reinvest profits to further their social mission) are finding it increasingly difficult to gain funding in the East of England.
Here’s what some of them are telling us:
Simon Aalder – Cofounder, Rehabilitation Hub Ipswich:
“If it wasn’t for Foundation East we’d never have got this place off the ground. Until they helped us our funding was a couple of very helpful (but small) grants from some really great local councillors and private funders committed to improving the community. Statutory and large grant making bodies said all the right things, but when it came down to it, weren’t able to provide the seed money we needed, even though they had a good understanding of the social and health impact our scheme makes. Indeed, they all loved the idea but wanted us to come back a year after we’d established. Their funding is around the wrong way. In fact, nobody, other than Foundation East, wanted to provide this significant seed funding to a Community Interest Company.”
Debra O’Neil, Cofounder, Boston Body Hub
“Finding funding to start our social enterprise was not easy. We needed enough to cover premises (including rental deposit and improvements), equipment deposits and working capital. When we contacted Foundation East, we were feeling extremely frustrated at various funding sources falling through.”
Jelena Aleksic, CEO and MD of GeneAdviser.
“There is such a strong need for our product that we wanted to get moving as quickly as possible. Foundation East’s loan came at a really key point because we were very close to the product launch but not quite there. We needed a little more time just to develop and launch before going to investors in order to have a really strong business case. It’s usually very difficult for start-ups, especially social business start-ups, to find bridge funding for this bit of business development, so getting the Foundation East loan was really important at the time.”
How can we help?
Many social enterprises require decisions about funding to be made quickly, due to the nature of the issue their solution addresses. Foundation East can help.
GeneAdviser, which puts doctors in touch with clinical lab’s that can perform gene sequencing and diagnostic tests and make diagnoses, is a perfect example of this. In the field of rare diseases, it currently takes an average of six years to get a diagnosis in the UK. If a genetic test is applied early enough, it is possible to reduce this time to just a few months. The challenge is to reach the right people early and quickly enough to make them aware that this is possible.
Without Foundation East’s loan, GeneAdviser would have quite a wait to even get off the starting blocks, as its cofounder Jelena explains:
“Foundation East’s loan application process is very user friendly - and fast. From making the application to receiving the money in our bank took just four weeks, which is amazing. If you go to investors it averages six months for first round, nine months for A series. Grant funding takes around six months too. When you’re starting up an area where speed to market is vital, you just can’t afford to wait that long. The fact that Foundation East can move so fast was really important to us.”
For all the reasons explained in my blog, ‘Help an entrepreneur unable to get loan finance’, we can often say ‘yes’ to loan applications that others have to say ‘no’ to (even if they’d like to say ‘yes’!) We don’t ask social enterprises for personal security against their loan either, after all, why should society expect people to risk their homes in order to deliver benefits to the wider community? We do, however, require that they are part of a business development support package, such as Cambridge Social Ventures, and we can make introductions to such providers too.
How can you help?
So, if you are a funder who finds yourself in a position where you believe that a social enterprise you are working with has a sound business plan, yet your organisation is unable to fund it at this stage – please, please, please refer it to Foundation East.
And if you are a social enterprise, or work with social entrepreneurs who may need help with funding, please, please, please, share this post …