Social venture capital
Social venture capital is a form of venture capital investing that provides capital to businesses deemed socially and environmentally responsible. These investments are intended to both provide attractive returns to investors and to provide market-based solutions to social and environmental issues. Social venture capital can refer to debt, equity or mezzanine investments in socially oriented enterprises, which includes BoP (Base of the Pyramid)-targeted efforts to stimulate economic development in the poorest regions of the world.
Among the firms that deploy social venture capital include
- Acumen Fund
- Grassroots Business Fund
- Triodos Bank
- Venturesome Fund
- Omidyar Network
- Shell Foundation
- Gray Ghost Ventures and First Light Ventures
- RSF Social Finance
- Root Capital
Social venture capital is a form of venture philanthropy and impact investing. Organizations providing services to the SVC sector include I-DEV International (management strategy, business scaling, portfolio improvement, and exit strategy) to GIIRS, which is an initiative sponsored by the Rockefeller Foundation and others to create standardized metrics by which to compare social investment performance and criteria. Further service providing services are Aspen Network of Development Entrepreneurs (ANDE) and the European Venture Philanthropy Association (EVPA), an association that covers venture philanthropy funds in Europe that finance charities, revenue generating social enterprises and socially driven business. These growing services are indications of the SVC sectors' increasing popularity and development. While many of the first round of SVC funds established, did so with a largely non-profit, socially oriented focus (vs. one focused on profitable returns and long-term success), funds are beginning to increasingly recognize and put weight on the importance of exit strategy, ROI (financial Return on Investment) and SROI (Social Return on Investment), which includes conducting greater due diligence into investments and supporting capacity building or technical training for portfolio company management.
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