ANIS2012 Social Innovation Lab1_Vijay Pratap
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Vijay Pratap Singh Aditya presented at the 3rd Annual Asia NGO Innovation Summit on social enterprises and funding. [1] Social enterprises have gained attention from development organizations, governments, and investors as a way to create sustained social impact. [2] However, social enterprises need revenue and profits to cover operational costs while continuing to provide social services. [3] Funding remains one of the most critical issues for most social enterprises to achieve scale.
ANIS2012 Social Innovation Lab1_Vijay Pratap
- 1. 14th June 2012 Social Innovation Lab 1: Social Enterprise: Investment & Funding 3rd Annual Asia NGO Innovation Summit, Seoul, South Korea, 13 - 15th June 2012 Vijay Pratap Singh Aditya, New Delhi, India Co-Founder & Chief Executive Officer www.ekgaon.com
- 2. Introduction Globally Social Enterprises have caught imagination of development actors, government and investors alike. Genesis of the 'idea' of a 'social enterprise' comes from the quest of creating sustained impact of initiatives on communities. Enterprise based operations mode allows social organisations, professional management of service delivery, building of scale and introduction of latest and appropriate technology in the value chain for enhanced productivity and sustaining the initiative. Enterprise mode of operations necessitates generation of revenue and surplus (profit) to meet cost of operations, mitigate costs escalations in markets, management and administrative costs, business development and expansion costs, while ensuring provision for depreciation, technology improvement, environmental and other social costs. While successful social enterprises have shown scale and sustained growth and impact, however generic templates of success are unavailable to give enough legal and economic basis for improvement in business registration, tax and financing mechanism across most countries of the world. A range of intermediary structures called “hybrids” exists across the world trying to evolve successful business models. Amongst all issues, funding and investment remains most critical for most social enterprises. ekgaon strives for community ownership in Enterprises, Media, Technology, Heritage, Finance, Development & Governance © ekgaon 2012 2
- 3. SI Lab 1: Social Enterprise Investment & Funding Introduction to the discussion agenda for the Lab – Vijay Pratap Singh Aditya, CEO, ekgaon technologies, India Social Investment for Social Enterprises – Sunit Shresta, Founder, ChangeFusion, Thailand Ants Sponsor project as Social Funding (Crowd Funding) – Aran Kim, Beautiful Foundation, South Korea Interactive Discussion – Speakers and Lab group delegates Sharing with other delegates in different social innovation labs ekgaon strives for community ownership in Enterprises, Media, Technology, Heritage, Finance, Development & Governance © ekgaon 2012 3
- 4. Investment or Funding: Need Vs Want www.ekgaon.com
- 5. What & When: The decision of raising funds Scale of a SE is important to determine, WHEN is the right time to go for raising investment The decision on WHAT financing is right one for the SE is dependent upon amongst other factors on 1) Legal status of SE as per the laws of the land 2) Business vision (Plan) of the SE 3) Financial structuring of the SE including ownership structure Any SE seeking to raise investment have to get the right answers to these questions before making a choice ekgaon strives for community ownership in Enterprises, Media, Technology, Heritage, Finance, Development & Governance © ekgaon 2012 5
- 6. When to Raise Funding Stage of SE – More then number of years in operations, it is important to understand the scale vs envisioned scale Seed Stage – Ideation, prototype and testing the pilot Start Up – Successfully tested idea whose technical and financial viability in pilot is established Growth Stage – For growing the enterprise to achieve scale Public Financing Stage – raising investment from public finance institutions or capital markets Sustaining Stage – enterprise revenue and impact in expected line with investor interest ekgaon strives for community ownership in Enterprises, Media, Technology, Heritage, Finance, Development & Governance © ekgaon 2012 6
- 7. What to Raise? Based on the stage of the enterprise, a range of financial products are available (however not accessible) Seed Stage – Angel Investment, Grants, Awards, scholarships and recently crowdsourcing Start Up – Venture Capital (Including Social Venture Capital), Angel Investment, Government Programmes, Long-term debt (convertible to equity) instrument offered by semi-government instruments, INGOs and Developmental investment arms of global financial institutions (like the GBF of IFC, The World Bank), JICA etc. and recently crowdsourcing Growth Stage – Venture Capital (including Social Venture Capital), Banks, Financial institutions, INGO funds, government programmes inter-agency programmes such as the European Commission and IFC. Public Financing Stage – Share markets - IPO Sustaining Impact Stage – Various debt instruments for working capital management, sales on books, revenue flow, reserves and investments ekgaon strives for community ownership in Enterprises, Media, Technology, Heritage, Finance, Development & Governance © ekgaon 2012 7
- 8. Contact For inquiry please contact Vijay Pratap Singh Aditya, Chief Executive Officer ekgaon technologies E 142 A, Lower Ground Floor, Kalkaji, New Delhi - 110 019, India tel: +91 11 4055 1490 | fax: +91 11 4055 1491 email: info@ekgaon.com | web: www.ekgaon.com Regional Office (South India) Door No. 14/6, Opposite BSNL Exchange, Ellis Nagar, 20 Extension Road, Madurai - 625010, Tamil Nadu, India tel: +91 452 4368094 | telefax: +91 452 2602433 | email: info@ekgaon.com | website: www.ekgaon.com Registered Office Ahmedabad, Gujarat, India ekgaon strives for community ownership in Enterprises, Media, Technology, Heritage, Finance, Development & Governance © ekgaon 2012 8