Social Enterprise Venture Capital

Securing funding for a social enterprise can be a tough nut to crack. Considering the fact that there is a very small pool of social venture firms that evaluate businesses on its social and environmental performance as well as its financial success, it is imperative to know who these firms are and how you can connect with them.

Let us see a few established social venture firms that are not only funding some great work but also getting financial returns.

1. Acumen Fund

Acumen Fund

Acumen was founded on April 1, 2001, with seed capital from the Rockefeller Foundation, Cisco Systems Foundation and three individual philanthropists. It focuses on solving problems of global poverty through loans and equity in India, Pakistan and East and South Africa. Their aim has been to transform the world of philanthropy by looking at all human beings as members of a single, global community. The Acumen Fund bridges the gap between the efficiency and scale of market-based approaches and the social impact of pure philanthropy, in entrepreneurs bringing sustainable solutions to big problems of poverty.

The CEO and Founder of Acumen, Jacqueline Novogratz quit her job on Wall Street to help open Rwanda’s first microfinance institution, Duterimbere. She is also the author of the book – ‘The Blue Sweater: Bridging the Gap between Rich and Poor’. When she founded Acumen, impact investing was something very new. Currently, they have partners from over 20 countries.

 Their motto is – ‘Changing the way the world tackles poverty and building a world based on dignity.’

2.   Calvert Impact Capital

Calvert Impact capital

Calvert Impact Capital is a non-profit investment firm that invests with an aim to create a more equitable and sustainable world. It was founded in 1988 by Jennifer Pryce and Wayne Silby.

Calvert Impact Capital raises capital from individuals and institutional investors to finance intermediaries and funds that are investing in communities left out of traditional capital markets. They have mobilized around US$ 2 billion of investor capital. Calvert has recently expanded its services to include loan syndications in 2017. Since then, they have syndicated more than US$ 130 million of capital.

People and institutions invest through their Community Investment Note. This money is then pooled to make loans to around 100 mission-driven organizations worldwide with a social and/or environmental focus. Calvert has received investments from more than 18,000 individuals and institutions since 1995, in amounts ranging from US$ 20 to US$ 20 million. 

3.   City Light Capital

City Light

City Light Capital is a Venture Capital firm that invests in impactful companies. They mostly partner with experienced teams working in the areas of education, safety & care, and the environment. Founded in 2004 and headquartered in New York, it is one of the earliest and most successful impact investing firms. Some of its key portfolio investments are 2U (Nasdaq: TWOU), ShotSpotter (Nasdaq: SSTI), Trilogy Education, and Ready Responders.

They only invest in those companies where there is a direct relationship between financial outcomes and measurable social impact. They provide seed-stage investments to those startups that they believe can grow to City Light Series A investments.

City Light is founded by Josh Cohen. He had worked in venture capital for a family office based in St. Louis, was a Partner in a private debt fund. In addition, he was the Director of Business Development for Mobility Electronics (NASDAQ). He had begun his career as an investment banker in the technology group of Deutsche Bank in San Francisco.

4. Triodos Bank

Triodos Bank

Triodos Bank aims to help create a society that protects and promotes the quality of life of all its members, and that has human dignity at its core. Founded in 1980, Triodos Bank has enabled individuals, organizations and businesses to use their money in ways that benefit people and the environment. They offer their customers sustainable financial products and high-quality service.

Triodos use a three-tier approach for lending and investment decisions. The bank evaluate the content of an activity and focus on its sustainable impact, whether it is viable and if it is supported by the community. They don’t invest in complex financial instruments. They believe in transparency and publish all the financial details on their website so that their savers and investors can see how their money is being used.

5. Root Capital

Root capital

Root Capital invests in the growth of agricultural enterprises so that they become engines of the impact that transform rural communities. Their main focus is on grassroots businesses in rural areas of developing countries. It was founded in 2003 and is based out of London.

Root Capital invests in those agricultural enterprises that support smallholder farmers, basically the enterprises whose credit needs are too big for microfinance and too small or risky for commercial banks. Root Capital provides loans ranging from US$ 200K to US$ 2M. To help businesses grow over the long-term, they also provide highly-customized training to the businesses so that they can strengthen their financial management, governance, and agronomic capacity.

Read an article on Social Financing here

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Komal writes about the startup ecosystem on VCBay. She is an Economics Hons. graduate from Miranda House, Delhi University, and is passionate about the world of entrepreneurship and finance.



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