Benefits Of Social Venture Capital Essay

Benefits Of Social Venture Capital Essay

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Similar to venture capital funding, social venture capital also provides its share of advantages and disadvantages. If a social enterprise is considering social venture capital as a funding option, the following points are important to keep in mind.

The advantages of social venture capital

Many of the advantages of social venture capital are similar to venture capital. Enterprises are not only able to attract capital; they will also receive the experience of the investor. Social venture capitalists can provide guidance to these enterprises and therefore, guarantee they fulfil their potential quicker.

In addition, the social venture capital investment model offers a relaxed repayment model. As with traditional venture capital funding, the schedule to return the investment is flexible and businesses can focus on the essentials at the start.

Furthermore, social venture capital provides quick and sufficient funding to social enterprises. Socially responsible companies often focus on projects, which are both large scale and take time to implement. Social venture capitalists understand this point of view and are able to provide the initial capital to kick-start these projects.

But social venture capital adds additional advantages as well. Most importantly, the investment conditions are often better to traditional venture capital. As social venture capital doesn’t simply focus on the financial return, companies have more room to focus other goals, such as fulfilling the social or ecological goals.

Finally, social enterprises naturally would benefit from social venture capital due aligned interests and goals. Since both parties in the deal are aiming to earn money, as well as to create a social impact, it is easier to reach common ...


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...ade $46 billion sustainable investments in 2014. In 2015, one of the biggest destinations for social venture capital, India, saw these types of investments increase by 8%.

The shift is not simply in investment numbers, but also in investor attitudes. US Trust’s research highlights nearly 70% of millennials to consider investments as a way to express social and environmental values. The percentage of older generations, which agreed with this notion, hovered around 30%.

National governments have jumped on board with social venture capital. In the UK, the government proposed to provide a 30% tax relief for social venture capital trusts. Changes such as these are likely to enhance the attractiveness of social venture capital, for both the investors and the entrepreneurs. Social venture capital has the potential to help solve the big social dilemmas of the 21st century.

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