reliable technologies and set the benchmark for key digital applications to make Germany not only the leading provider in the area of smart production and logistics,
zzimproving the financing conditions for start-ups by creating an internationally competitive environment for venture capital and crowdfunding;
IBM, Medicines for Malaria Venture (MMV), The swiss Agency for Development and Cooperation (SDC), Vodacom and Vodafone.
The competition targets start-ups and businesses through competitive funding, offering venture capital, mentorship and other forms of support.
and to turn their entrepreneurial projects into successful ventures. Becoming familiar early with the idea that running one's own firm can be a potential career option is important
or peers, serve three distinct purposes in the development of new ventures discovering opportunities, securing new resources,
and business ventures to be conceived. 141 6. 3 Crowdfunding, contests, and other sources of capital Funding is crucial to nearly every start-up.
as well as new venture capital initiatives focused on the developing world. Crowdfunding is the collective effort of individuals who network and pool their money, usually via the internet,
According to Forbes, crowdfunding will generate USD 500 billion in transactions in 2013.142 Venture capital for Africa is an example of a crowdfunding model to connect entrepreneurs building promising companies in Africa with investors from some 159 countries
The community currently supports more than 400 ventures in over 30 African countries. Entrepreneurs have been featured in mainstream media, established joint ventures and secured funding.
can access screened ventures and review ventures that match their investment criteria. Members meet online as well as organize offline-networking events called VC4AFRICA Meetups.
world2013. itu. int/event/innovation Venture funds are also being established by many organizations to fund startups.
The ihub provides a space where young entrepreneurial members can receive mentorship, internet connectivity and the possibility of venture funding through connections with the international venture capital community.
Venture capital Financial capital invested in start-up companies. Web 2. 0 Websites that allow users to interact,
Its investors include not only the socially focused Acumen Fund and the International finance corporation of the World bank but also Dow chemical's venture fund.
project representatives will be able to visualise their impacts by comparing their performance with a set of benchmarks (Passani at al, 2014a).
and grow their venture. The global study Good Incubation (2014) 12 explores how social venture incubation has grown as a set of techniques to help founders develop ventures that are investable propositions,
including a focus on incubators with a specific focus on supporting digital social innovators. Incubators typically support innovators in exchange for equity, at pre-seed or seed stage.
The work by Nesta in the UK, on the tech for good incubator Bethnal Green Ventures,
Bethnal Green Ventures in the UK, who support early-stage technology start-ups tackling a social or environmental problem with £15,
Wayra Unltd The Accelerator Healthbox London Clearlyso Angels Bethnal Green Ventures Tor Open Garden Guifi. net Confine Smart Santander DSI AREAS
AND EMPLOYMENT Arduino Avaaz Avoin Ministeriö Bethnal Green Ventures Citysdk Clearlyso Angels Communia Commons 4 Europe Confine Crisisnet Desis Network Everyaware Fablab
Right Group Open Knowledge Foundation Github Free software foundation Wayra Unltd Bethnal Green Ventures Tor Guifi. net
adapted from Sestini, F (Digital) Innovation Venture capital Big data and cloud computing COMPETITION, ECONOMIC ENTERESTS Innovation and innovation policy are not new to the European union.
Results from 2012, shows that more than 400 ventures were started among its members. One of the most obvious measures is to crackdown on tax abuses by technology companies.
Seed funding is aimed mainly at start-ups and ventures. There are other elements such as prizes, competitions, events,
For instance, the Nesta report Good incubation 72 charts the rise of social venture incubation, with a focus on
and their projects The Triple Helix outlines how social tech ventures, and investors, should focus on three types of value Social Value, User Value and Financial Value when developing and scaling their project (s) 76
The potential social change the venture intends to create i e positive impact health, resilience and sustainability society.
There has to be a market for the venture to be sustainable and the venture has to be active in it.
The generation of sustainable income is understood as financial value, which comes as the result of realising user or social value.
and the DSI accelerator programme run by Bethnal Green Ventures have demonstrated potential in how models developed to support early-stage businesses can be adapted to support
If successful there is a process of sustaining the new model in the implementation stage perhaps as a new venture or as a new policy within an existing institution.
the projects that should be implemented to become sustainable ventures and the ventures that should be scaled up to achieve systemic changes.
It is important that regional authorities design programmes that stimulate a pipeline of projects at each stage
Social enterprises are ventures in the business of creating significant social value, and do so in an entrepreneurial, market-oriented way, that is,
and the UK22 tell us that 75%of these ventures work on challenges relating to training and education (smart growth), economic, social and community development and social service delivery (inclusive growth),
Moreover, we observe that these ventures are introducing many more new-tothe-market innovations than mainstream businesses.
and attitudes of individuals involved in creating new ventures for social purposes, including the willingness to take risks
By social enterprises here, we mean ventures whose primary goal is to create significant social change,
Organisations that have experience of backing successful social ventures emphasise the importance of looking at the carrier of the project as well as the idea that they pitch. 24 European commission report on assessment and metrics of social innovation:
Launchpad (http://launchpad. youngfoundation. org/about/about-launchpad) is a platform that develops promising ideas into new ventures by providing funding, social capital and entrepreneurial expertise.
It has acted as an incubator to many projects and ventures some of which are located co at its London headquarters.
105 3. 2. 2. Access to venture capital The European Venture capital Funds...105 3. 2. 3. The European regulatory framework for social investment funds:
The recent period has been characterised by the emergence of a wider diversity of funding sources for innovative ventures with a social objective from the public and private sectors.
'and the public at large responds, where legislation permits, to calls to‘crowdfund'social ventures. This is good news as one of the major barriers to the development of social innovation identified in the first BEPA report was access to finance
but also overdependence on grants from charities, foundations and public support, in particular when growth capital is needed to engage in long-term ventures.
Together with the Regulation on European venture capital funds (Euveca) and the Alternative Investment Fund Managers Directive (AIFMD), this Regulation aims to make it easier for AIFMD-exempt venture capitalists
The range of eligible financing tools/investments under the Eusef Regulation is wider than those available for venture capital funds under the EVCF Regulation. 58 The third axis of this programme focuses on microfinance
and scope of the venture and to allow an approach that respects the diversity of social enterprises as well as the need to cope with change and improvement,
beneficiaries or service users as well as investors, allowing for lighter and cheaper processes for small ventures.
yy The Commission launched a pilot European Public sector Innovation Scoreboard (EPSIS) with a view to improving its ability to benchmark the innovation performance of the public sector in Europe.
and benchmark progress. Much will depend on creating a critical mass of public sector leaders who have the skills to manage innovation.
yy piloting a European Public sector Innovation Scoreboard as a basis for further work to benchmark public sector innovation
and by investing in funds that provide venture capital and mezzanine finance to expansion and growth-stage SMES;
For the same period, the Structural Funds have been reformed to enable Member States to earmark Structural Funds to finance social enterprises. 3. 2. 2. Access to venture capital The European Venture capital Funds174
European Venture capital Funds (Euveca which along with Eusef175 became available on 22 july 2013. Euveca invest in unlisted companies with limited access to capital,
Like the social ventures it describes, we want this work to grow and develop. Your comments, thoughts and stories are welcome at the project website:
and setting up a social venture in a way that ensures its financial sustainability; and that its structures of accountability, governance and ownership resonate with its social mission. 1 We have launched also an accompanying website, www. socialinnovator. info,
and venture capital with those from tendering and grant giving. Others are combining ethnography, visualisation techniques from product design, userinvolvement ideas from social movements,
some NGOS are learning from venture capital not only how to finance emerging ideas, but also how to kill off ones that aren't advancing fast enough to free up resources.
But to move from pilots and prototypes to a securely established public innovation, it is often advisable to set it up as a separate venture,
A business model that runs parallel to the core idea of the venture and which sets out how it can become sustainable.
what we refer to as the venture's‘relational capital'.'A staffing model including the role of volunteers.
Any venture driven by a social mission has an interest in maximising the spread of an innovation beyond the level dictated by the venture's own financial interest.
Most social ventures have to do both to remain open and collaborative, while surviving financially. It is this very openness
It is also this openness, together with the social mission of the venture, that attracts voluntary contributions in terms of volunteer time, resources, and donations.
Social ventures have much to gain from keeping open, yet this is easier said than done.
Ventures are subject to the day to day disciplines of keeping the show on the road. They tend to turn inwards behind their organisational moat.
since along with the social idea, it is a key part of a venture's attraction. Business models that work are themselves a prime area for social innovation.
The context for a business model is a business strategy about how the proposed venture is positioned on the economic field of play.
There are a range of social business models that involve recognising the potential value of a venture's assets
which a venture is based. In the diagram below we identify 12 alternative axes which may be more appropriate for social ventures. 62 THE OPEN BOOK OF SOCIAL INNOVATION 4 disaggregating its activities to generate alternative income streams.
Particularly instructive for social ventures are the lessons from the business models adopted by web companies which
like social ventures, have an interest in maintaining free access, while at the same time generating revenues indirectly as the result of the response that the free service attracts. 108) Business plans.
Business models together with business strategies then need to be turned into business plans. Although it is rare for a social venture to be a straightforward implementation of a blueprint (it is much more like a process of discovery and unfolding),
plans help to clarify tasks, milestones, and sequencing for example of investment in people, equipment and market growth.
But they provide a chart for a venture's theatre of operations and demonstrate the competence of those engaged in taking the venture forward. 109) Business plan assessment methods.
There are many methods that help to define business models and business plans. The Bell-Mason methods from the field of venture capital, for example, provide a rigorous framework for paying attention to the many elements that together make up a credible business plan,
such as skills, marketing, and finance. Their model for new ventures has shown 12 axes in the diagram below.
For each of them progress is mapped in four stages. First is the concept stage. This is seeded and then developed as a product.
They have used this diagnostic model to chart the progress of more than 450 ventures, in order to identify key areas for further development.
when every venture has to decide what organisational form to take, what kind of decision making and accountability processes to adopt,
For some social ventures, simple private company models are the most suitable: they may help with raising equity,
Most social ventures depend on restrictions Just a few of the houses built by Un Techo para Chile (A Roof for Chile.
and/or to the terms of exit as key design features to ensure investors place the venture's values before maximising financial returns. 112) Adapted private companies.
and is similar to charitable status. CIC status enables social ventures to access equity investment
As instruments of governance of social ventures, they have a dysfunctional history. They represent a division between moral and manual labour
Yet the success of a social venture depends on an integration of the two. The means of overcoming this division is in part through participation in an active process of formation,
and in part through the engagement of board members in the active work of the venture.
But increasingly social ventures are seeking ways to involve stakeholders that do not depend on representation on a board. 120) Boards for innovation.
The social sector has started to develop more comprehensive guides to help ventures make decisions about governance models and organisational forms.
and engaging members and stakeholders. 124) Consumer shareholding can be used to involve consumers more directly in the work of a venture,
Many social ventures try and avoid strict hierarchical structures by remaining small and by subdividing (like cells)
or collaborating with other similar ventures. Some have adopted a franchised model, to allow each unit to remain relatively small,
while benefitting from economies of scale for the group of ventures as a whole. This is the basis for the expansion of Riverford Organic Vegetables Ltd,
to keep his venture small, and production local. The resulting network now delivers 47,000 organic food boxes a week. 129) Dimensions of management.
and the venture's ability to maintain innovation. The financial and managerial demands of innovation may put pressure on existing business.
Operations The distinctive value and values of a social venture show up not just in its structures but in its operations how it works with others, uses technologies or works in partnership. 131) Socially-oriented supply chains.
Transparent supply chains that reflect the values of the venture are often a key element in sustaining
and expanding a social venture. An organic food box scheme, for example, depends on its certified supply chain.
For some ventures providing intermediate goods or services the challenge is how to develop a demand chain that processes
But as with supply chains, the goal is to have the demand chain reflecting the social mission of the venture. 4 SUSTAINING 71 133) Shared backroom economies.
Many new ventures carry high overheads because of their small scale, or they fail to invest in financial and operational systems that are important for their effective working.
It is important for ventures to find ways of sharing these overheads, or access part-time specialists,
It is often important for ventures to adopt technologies that are flexible, adaptable, and suitable for distributed activity.
Image courtesy of Danone Communities. 4 74 THE OPEN BOOK OF SOCIAL INNOVATION Relational capital New ventures put much of their energy into securing financial capital money to invest in fixed assets on the one hand
and trust built up between a venture and its users and suppliers, and the relationships between a venture and its staff and volunteers.
Conventional accounting takes little account of this intangible capital, yet in all social ventures it is the foundation of their strength,
and of their distinctiveness. We use the concept of relational capital to capture the quality of relationships within
This is the issue of greatest relevance for a social venture as its fortunes depend on the range and depth of its relationships that.
for a social venture the boundaries are more porous internal and external interests mesh. It is one of its greatest potential assets that a social venture can attract support and resources from outside itself,
as well as motivation from within, on the basis of its ideas and the way it works to realise them.
'Investing in human resources to ensure a social venture's openness is as important as investing in a building or machine.
For it concerns the formulation and presentation of a venture's identity, to itself, and to the outside world.
for it is from an open and inclusive culture that a social venture draws much of its strength. 136) Systems for user feedback to keep users at the centre.
Social ventures tend to rely on their idea to galvanise funders and users. They place their operational focus more on supply than demand.
But 4 SUSTAINING 75 to ensure that the venture remains generative rather than static, users should remain central a service should know who they are
Just as no venture can operate without a finance and accounting system, it requires a system of user relationships and feedback as part of its operational spine. 137) Web presence.
All social ventures now have to have a website. But their full potential has begun only to be explored.
Many ventures are by their nature information intensive in respect to the quality and tangibility of their work, the stories of those involved in it,
It has therefore become crucial for ventures to have access to the tools wikis, chat rooms, forums, comment boxes, and blogs.
which can act as feeders to the venture's website. Above all, a venture needs to devote resources to the constant updating
and active hosting of their sites. A good example is the site of the cooperative football team Ebbsfleet United (My Football Club
Social ventures, particularly those that are funded tax or grant-aided, have been suspicious of branding. Governments find themselves criticised for spending money on branding.
But all ventures have an appearance and a style. It is part of the way they communicate.
Social ventures should see branding as a flame that indicates a presence and attracts people towards it.
Some ventures go further and make their workplace into a working gallery or museum. They demonstrate much of their work visually, through photos and graphs.
It is always a useful exercise for a venture 4 76 THE OPEN BOOK OF SOCIAL INNOVATION to consider how it could best present its work
They are an occasion for experiencing the venture's culture. Events of this kind are much more important for social ventures than commercial ones.
They allow a wider group to share in the spirit of the venture. 141) Open forms of intellectual property to maximise the spread and diffusion of the idea or service.
Social ventures have an interest in adopting open forms of intellectual property. They stand to benefit from a shared commons of knowledge
both in what they receive back from a reciprocal economy of information, and in extending the value
Image courtesy of Rolf Disch, Solararchitecture. 4 SUSTAINING 77 venture that initiated the zero carbon development at Bedzed) recently placed its most valuable technical information on the web for open access
Open access or open licensing allows people to build on a venture's knowledge assets and to mix together these assets with others.
For some ventures this may involve the foregoing of possible income streams from the sale of that knowledge,
but there are many alternative means of generating income, not least through the strengthening of the venture's relational capital through a policy of open information. 142) Formation for developing skills and cultures.
The formation or training and shared orientation of those engaged in the venture plays a critical role in providing cohesion to social ventures.
It informs the articulation of the venture's central purpose. It provides meaning for those working for the venture
for investors and volunteers, and it gives to the venture a living, reflexive power that is not limited to particular individuals or levels in the organisation,
but to all those involved. This is important also, for public innovation, through, for example, bodies like the National school of Government (NSG) and the Improvement and Development Agency for local government (IDEA), CELAP in China,
not only for the venture itself, but to create a group of individuals able to put the ideas into practice more widely.
and its operational practices should reflect the venture's mission, and avoid the tensions that can arise between market rates of pay and
and the venture's beneficiaries. 144) Valuing the voluntary. In a volunteer economy, roles, relationships and incentives have to be thought about differently to those where there is a contractual wage relationship.
but there is great potential value to a new venture if it makes one of its goals the attraction and effective employment of a wide range of volunteers.
with simple goals and a strong ethos. 4 78 THE OPEN BOOK OF SOCIAL INNOVATION Venture finance Every innovation process requires some finance.
For social ventures it is key that the sources of finance should share the venture's social goals as the primary driver of the enterprise.
but the goal should always be to find ways for the core finance to come from those who share the venture's mission.
To finance new ventures there are a range of ethical banks and social funding agencies devoted to supporting new and expanding ventures.
All forms of finance bring with them power relationships which can sometimes threaten the values
and relationships which the venture is built on. To guarantee that the initial venture funding remains subordinate to the values of the social mission,
enterprises can raise social equity, limit the quantity of common shares, and seek subordinated loans from sources ready to share early risk without demanding a counterbalancing share in the project's equity. 145) Grant funding is provided sometimes to grow social ventures.
This usually depends on one or two wealthy philanthropists having a sufficient commitment to the project.
but much of the loans now being made for social ventures are coming from specialised social finance organisations, sometimes seeking security (usually from property),
They sometimes have an advantage over venture capital funding in that they can tap investors who want to make social impact their primary incentive rather than financial returns.
or whether they will be used to finance innovation (see also method 368). 151) Venture philanthropy uses many of the tools of venture funding to promote start-up, growth,
and risk-taking social ventures. It plays an important role in diversifying capital markets for nonprofits and social purpose organisations.
Good Deed Foundation in Estonia, Invest for Children (i4c) in Spain, Oltre Venture in Italy,
and both Social Venture Partners and Venture Philanthropy Partners in the US. Sustaining innovations through the public sector Sustaining ideas in the public sector involves different tools to those needed in markets or for social ventures.
There are similar issues of effective supply (the proof that a particular model works) and effective demand (mobilising sources of finance to pay for the idea or service).
A venture may take it on itself to ensure this synchronisation of growth, but it is undertaken also by an industry body like the Soil Association or the UK's energy efficiency body National Energy Services (NES).
In developing a venture's brand there are two models. There are closed brands which are controlled tightly from the centre,
which invite others to play a part in developing the venture and the way it connects,
or provide a means for providers of money to judge between alternatives. 208) Standard investment appraisal methods there are a wide range of tools in use in banking, venture capital and other fields of investment
This approach reflects the development of biographical methods as qualitative research techniques in the social sciences. 228) Outcome benchmarks,
The great challenge for bottom-up ventures is how to access the power and money to 6 110 THE OPEN BOOK OF SOCIAL INNOVATION shift big systems.
or any benchmarks to draw on. Instead, assessments need to include some judgement of the broader direction of change in the field as a whole;
They include specialists in technology transfer, venture capital firms, conferences, and academic journals which sit alongside consultants adept at looking at companies'IP,
because their business model draws on the fact that any new venture needs to be based somewhere,
supporting a range of social ventures to become more effective in tackling social problems. We've suggested that much social innovation comes from linking up the‘bees'the individuals
and develop new ventures; places to access experience, knowledge, finance and markets. And above all, places for making connections.
others act as internal public venture funds, such as the UK's‘Invest to Save'budget for crosscutting innovations,
and innovation agency to develop a model that seeks to create new ventures and back social entrepreneurs with a multidisciplinary team, a staged investment model,
1 per cent of turnover as a rough benchmark (similar to the proportion of GDP now devoted to government support for technological and scientific research and development).
324) Dedicated innovation funds and internal public venture funds, such as the UK's‘Invest to Save'budget for crosscutting innovations, The Enterprise Challenge in Singapore,
New zealand), lotteries provide a primary source of funding for community ventures. 351) Socialising risk. New forms of social insurance for long term care for example
The more recent waves of interest in social entrepreneurship and venture philanthropy have also been better at supporting individual projects than making them more than the sum of their parts,
but visible, trend has been the growth in venture philanthropy, with much greater involvement of donors in projects and organisations.
and social investment circles such as the Funding Network, United Way, Social Venture Network, or the North Virginian Giving Circle of HOPE (Helping Other People Everydy).
and employment for the rural poor. 420) Venture philanthropy focused on innovation in particular sectors, such as the Robert Wood Johnson Foundation's (RWJF's) Pioneer Portfolio which specialises in health and IT. 421) Philanthropic mutual funds such as the Acumen Fund and the Global Fund for Women. 2 SUPPORT IN THE GRANT
providing independent perspectives. 425) Metrics for venture philanthropy such as those developed by Homeward Bound, a project to end homelessness in the US,
Venture philanthropists, including Private Equity Foundation and Impetus Trust, are now using the skills of the private equity industry to help‘turn around'charities and build their internal capacities.
Harpercollins. 4. John, R. 2006) Venture Philanthropy: the evolution of high engagement philanthropy in Europe.‘‘Skoll Centre for Social Entrepreneurship Working Paper.'
http://www. sbs. ox. ac. uk/centres/skoll/research/Documents/Venture%20philanthropy%20in%20europe. pdf. For large scale developments in this field, see:
or Work Ventures in Australia. 444) Consumer co-ops such as the Japanese food co-ops which have 13 million members.
with not-for-distributed profits such as BASF-GAIN initiative for Vitamin a in Africa, the Danone-Grameen yoghurt enterprise in Bangladesh and the BASF Grameen venture, also in Bangladesh,
and fair trade. 458) Social enterprise funds including the new venture capital fund, set up by Triodos Bank,
or so social enterprises in the UK. 459) Social venture funds that use equity-like investments for start-up and early-stage social ventures where loan financing is unsuitable.
Examples include Bridges Community Ventures in the UK, which invests in businesses based in regeneration areas
In the UK it has recently been agreed that charities can invest in the start-up equity of social ventures,
which is part of the larger banking group Intesa San Paolo. 474) Business angels provide finance for social ventures, often with advisory roles,
86 Bridges Community Ventures 186 Brokers 134 212 THE OPEN BOOK OF SOCIAL INNOVATION Brookings Institute 48 Budgets 92;
148 Finance For emerging ideas 54-57 For new ventures 78-80 For systemic change 121-122 Public economy 149-161 budgets to promote internal
198-199 Oliver, Jamie 95 Oltre Venture 80 One Click Organisations 68 Open Open Access Journals 200 Open Brands 83;
207-208 Social Silicon valley 131 Social Venture Network 171 Social Venture Partners 80 218 THE OPEN BOOK OF SOCIAL INNOVATION Sonoma Mountain
, 108,117, Venture Philanthropy 80,167-168,172, 175 Visiting 36,205 Vodafone 183-4, 219, Voting 41,65, 153-154, Volunteers 54,59, 64,74, 77,166
Ventures 183 Working Rite 66-67,220 World bank 19,38, 89, Worldchanging 178 WRAP 135 X-Prize 39 Young Foundation, The 2, 17,126
We have a 55 year track record of success with ventures such as the Open university,‘Which?'
working on over 40 ventures at any one time, with staff in New york and Paris as well as London and Birmingham in the UK.
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