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Not enough social venture capital

The enduring problem in Ireland, from when I worked in venture capital back at the starts of the noughties, was a lack of venture capital for investment in start-ups, particularly in the early stage sector (where I operated). The same is very much the case in the social enterprise sector, but considerably worse. Yes there are some social venture philanthropy funds, such as Social Entrepreneurs Ireland and the One Foundation, which has a particular focus. There are also financing companies such as Clann Credo and the Ulster Community Investment Trust or UCIT (which does operate in the Republic also).

If you look at some of the members of the European Venture Philanthropy Association you can see the kind of funds that we badly need in Ireland to make up the gap. Impetus in the UK for example, has almost £15 million sterling, and invests at ranges of £150,00 to £500,000 per venture. It particularly targets educational attainment, skills and employment. Or Inspiring Scotland, which has individual investors as well as Charitable Trusts and the Scottish government (are you listing in the Dail?). Like Venture Capital funds it looks at returns over a 5-10 year time frame. As well as a three year rolling commitment to funding it also leverages pro bono support from a variety of partners, all useful support for the venture. Like venture funds, they run more than one fund targeted at different groups – last year their 14:19 fund invested £6.2 million and their investees leveraged another £3.2 million.

If we are serious about social enterprise in Ireland, we need more social venture funds and funding. These funds need to be big, probably in excess of €20 million at least if these funders are to ‘follow the money’ and reinvest in the most promising ventures. This is not a replacement of those that exist or the grant giving organisations. But we if we going to develop more enterprising ventures, those with significant potential to create sustainable social businesses, then the investment money has to come from somewhere.

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