Around ten years ago I finally accepted failure in our efforts to raise what might have been the UK’s first social impact fund. In partnership with The Big Issue and Anita & Gordon Roddick from The Body Shop, we set out to change finance so that society benefits at the same time as investors, fund managers and entrepreneurs. Two-thirds of each meeting was spent explaining “social investing” and our efforts came to nought.
Five years later, that company spawned ClearlySo, launched “to help social entrepreneurs succeed”.
Candidly speaking, we had no business model (we tried about a dozen), but had aspirations and a belief that social investing would take off. Fortunately, I had some wealthy (and sufficiently guilty and well-intentioned) friends & family, and we managed to raise £262,500 to get started. By this point, the concept of social investment had entered the lexicon, but most felt it was a concept with lofty ideals but little substance. I believe most of these good-hearted angels thought they would never see the money again – yet I am eternally grateful to them.
We went on to raise another £1m from these and more charitably-inclined angel investors—staving off bankruptcy twice. These dozen angels were joined by NESTA (£150k) and then Big Society Capital (BSC-£1m), both independent institutions set up by Government, with a mission to catalyse the social impact marketplace. Who knows if they ever expected their money back, but creating a social investment infrastructure was their mission and our new business model (number 13) was and still is focused on helping to raise investment for socially impactful businesses. So a government mandated mission replaced guilt and charitable intent. We were delighted they invested, and again kept the receivers at bay.
Last week we announced the completion of a fifth investment round of £804k from 17 investors. Most of this came from new investors, although we were delighted to become the first-ever follow-on investment (£250k) of BSC. The ten comprised successful mainstream entrepreneurs, fund managers and a few successful social entrepreneurs — for example, the aforementioned Gordon Roddick invested — proving that sometimes partnerships take a bit of time and patience to form.
What was most interesting about this round was that people seemed to actually want to invest. In a number of cases, individuals we asked to invest £X insisted on investing twice that sum — and would not accept less. This is why we raised £804k, which exceeded our £750k Board-mandated “maximum” — and could have raised over £1m.
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