Wed 18 Sep 2013 11:41PM

Funding Tools

AG Anna Guenther Public Seen by 31

Funding is the biggest pain point I have. I'm pretty sure I'm not the only one, so would like to talk about any quick wins in this space, and any longer term changes that need to be made.

I've promised to put a few hours a week into working on this - figuring out the tools available, changes needed, etc.


Anna Guenther Wed 18 Sep 2013 11:42PM

This article in the Guardian has some pretty good pointers, especially interested in what Unltd did with BVC: http://www.theguardian.com/social-enterprise-network/2013/sep/13/social-investment-angel-investors?INTCMP=ILCNETTXT3487


Joshua Vial Thu 19 Sep 2013 12:53AM

I've been doing quite a bit on revenue share backed funding models and touched base with some folks at SOCAP who are doing similar stuff.

The key idea is that instead of debt or equity it is a hybrid and typical deals look like (with made up numbers)

Investor gives investee a lump sum - 50k
Investee commits to a fixed return - 2x (so 100k in total repayments)
Investee commits to a repayment formula - e.g. 15% of revenue

If the company goes gangbusters then the investor gets paid back fast and it's a great investment. If it goes slowly then it takes ages and it's a bad one. If the company fails before paying back the total it's a terrible one.

This can take the form of the investor purchasing shares and the investee buying them back at a certain rate. Or it can be a loan mechanism with structured payment terms.

I'm closing a deal with a cambodian SE at the moment along these lines and we're using it to resource all of craftworks internal projects. Happy to host a workshop on it at some stage.


Anna Guenther Sun 22 Sep 2013 7:41PM

@joshuavial that's a fab explanation / funding tool! Is that happening in NZ yet at all? Would be great to figure out how to find some social impact investors interested in that sort of deal.


Anna Guenther Tue 8 Oct 2013 10:36PM

Here's a good primer on SROI (social return on investment) that I thought the group might like: