Social Impact Co-Investment Fund launches at the BBAA
27-07-2011The Social Impact Co-Investment fund, managed by the FSE Group, with lead partner Resonance was launched at the BBAA (British Business Angels Association) Investment Summit on July 1st 2011. This innovative new pilot fund will deliver early stage acceleration funding to social enterprises alongside business angel investors. The fund will invest in businesses that reflect the risk profile of typical business angel investors but that also aim to deliver a social impact as well as a financial return. This pilot fund was financed by NESTA and the Panahpur Trust , as part of the Big Society Finance Fund, in itself a demonstrator for innovative new financial solutions for the social enterprise market.
The Social Impact Co-Investment fund will primarily provide loans of between £25,000 and £100,000 to qualifying businesses which are financially robust but can deliver disruptive social impact. This will be provided on a “match funding” basis alongside private sector investors who may invest via equity or loans. The fund will encourage the active participation of the business angel investor, who as well as money, will bring skills, experience, contacts and time commitment to the business. By providing a corner stone investment, the Fund aims to encourage more participation by business angels and brings rigour and financial structure to the social enterprise investment offer.
The fund also aims to raise awareness of the investment opportunities in this market through networking and training events. These events will be held in conjunction with established mainstream angel networks and will be held nationwide commencing in September 2011. These will highlight existing successful social enterprises and business angels who are already active in this space and willing to pass on their experiences to others.
As Fund Manager, the FSE group will be primarily responsible for selecting and structuring the investments. Sally Goodsell, Chief Executive of the FSE group comments, “ This pilot fund has been established to demonstrate proof of concept for this innovative mechanism to enhance the supply of business angel funding for the social enterprise sector. Business angels are looking to diversify their portfolios of investments and we are convinced that, with the right structures, the social enterprise market can benefit from this source of funding and the skills and experience that can be brought by both fund and private investor”
Joe Ludlow, Director of Social Investment at NESTA comments, “ We are delighted to support the establishment of the Social Impact Co-investment Fund. The Big Society Finance Fund was looking to invest in innovative projects that could deliver immediate impact to the social enterprise financial marketplace. We hope that the success of this pilot will enable a more significant follow on fund to be raised and mainstream the participation of business angels in this market.”
Resonance, as lead partner will be primarily responsible for working with the social enterprises to ensure that the businesses are investment ready for the fund and will provide the social due diligence support to FSE as part of the assessment process. Daniel Brewer of Resonance comments “ As managers of one of the leading social enterprise angel networks, this fund will be key in demonstrating that you can both have and maintain a strong social impact as well as make a financial return..”
