Social Edge is launching a discussion hosted by myself, Jed Emerson and Jim Fruchterman on risk-taking expansion capital for social enterprise. We hope that there can be some cross-posting in the coming days. Here is the discussion.

The gist of it is captured in the following: Over recent years many entrepreneurs have responded to the siren call of launching a new venture to advance social value, while incorporating strong and sustainable financial models. These entrepreneurs, whether operating nonprofit or for-profit corporations, are often able to secure early stage funding to test their vision, experiment with new business models and create an organization with the potential to generate real value for investor and stakeholder alike. Social enterprise ventures run the gamut of organizational types, approaches, strategies and forms. Once many of these organizations have achieved success at one scale, what they require are funds similar to second round or the “mezzanine funding” found in traditional for-profit, venture investing. Yet, almost all of these social entrepreneurs share one thing in common: they lack access to risk-taking expansion capital. If this were due to an appropriate competitive scarcity, where vying best-in-class social enterprises won critical expansion capital through a meritocracy of well-ordered capital markets, then this might be a good thing. But, that is not why we lack the required capital. Social ventures lack access to capital because there are literally almost no institutional, professionalized and at-scale sources of expansion capital for social enterprise. We need to crack this code, and there’s no time like the present. PAPER ATTACHED