Securing funding for your social enterprise is probably one of the most difficult challenges in starting a new business, and one that many social entrepreneurs struggle with. Financing your venture can be tough, and many people need investment from others in order for their dream to become a reality.
How much will you need to get the wheels in motion? Funding can come at all stages of a business, from startups to fully-fledged organisations. Here’s some routes you should explore when it comes to financing your social enterprise:
Family, friends and angels:
Beyond using your own personal finances, the next port of call is willing family, friends, and possible angel investors. There are pros and cons of having people close to you invest in your idea, so ensure you weigh up all the benefits and risks before proceeding.
Have a word with your bank to see if they can provide working capital. Or consider joining an ethical bank, such as CharityBank to see how they can help you. The Co-operative have launched it’s own Social Enterprise account, with free banking and no charges.
Use the power of the crowd to fund. Organisations such as KickStarter, Crowdfunder or GoFundme can provide you with that much needed financial boost by sharing your passion with a large audience. If you’re an entrepreneur that wants to get their voice heard online, consider Patreon, a crowdsourced funding platform that will pay you to create content.
UnLtd’s Do It or Grow It Awards provide capital for different stages of a business, whether you’re a startup or an established business. The Natwest Social Business Awards offers first prizes in cash value of up to £6,000.
There are a lot of grants out there; CAN Invest, Community Foundations and the Big Lottery Fund can support social enterprises. Grants are one of the more popular routes for social enterprises; you will however need determination as sometimes competition can be tough!
If you’re using a startup incubator or an accelerator program, you may secure some equity investment. This means that the investors will not only support you from a business perspective, but invest in your enterprise for a percentage of the business.
Securing a loan is a big step, and should only be considered once you have fully explored all other options. Ensure you have a sound business plan, and have consulted with a social enterprise adviser before you commit to any drawdown from your bank. The Community Investment Fund provides both loans and equity to social enterprises.
Further funding opportunities: Social Enterprise UK offers further details of organisations who might be able to help you, and here’s the key players in the social investment landscape. The School for Social Entrepreneurs also has an extensive list of funding opportunities.
Finding funding for your social enterprise can be a challenge, but remember, if at first you don’t succeed, don’t give up! Where there’s a will, there’s a way.