Sustainable funding schemes #SFL

An absolutely essential, mandatory element of a sustainable business model is a stable funding scheme. In order to actually propose an effective solution for a certain social problem, it is crucial to find sustainable investment sources — this way a social impact of meaningful scale is achieved.

The social entrepreneurs should take into account that their and their potential investor’s visions should be similar — as well as to think of what kind of strategic support can the funder offer, beyond the monetary capital. A shared vision is mandatory for impact.

Each funding source, no matter organization or an individual, have their own set of commitments and obligations, schedules, and timelines. Often, these objects are dedicated to a specific social topic or geographical location-based. It is important to keep in mind that, while a crowdfunding campaign will help you short-term, a connection or a stable professional relationship with an investor might offer sustainable funding for years ahead.

STEP 1
Market measure or checking the waters

In order to get started with your social business idea, one of the easiest ways to test and validate it is to:

👉 Bootstrapping
👉 Pitching to your relatives, friends, and network

Both of these ways might accumulate just enough funds to get your idea to the first stage of creation and testing. This enables the entrepreneur to gather feedback for their initial solution and improve it prior to presenting it to investors — proving the market requirement.

STEP 2
Building and launching

This is the stage where the product gets an injection of funds in order to be built, elaborated, and marketed. This is the step where the impact starts. Such momentum can be achieved mainly with:

👉 Crowdfunding
👉 Incubators
👉 Accelerators

Incubators and Accelerators offer the participating entrepreneurs the resources they need to grow — not just financial benefits. Often the crucial support comes in form of mentorship, network building, and simply exposure for the new entrepreneurs — this step wouldn’t be possible without pro bono experts-mentors in start-up communities.

Them sharing the knowledge actively participates in growing, fostering, and helping the common good to flourish.

Accelerators prepare the social entrepreneurs to search, find and secure further investments with angel investors, venture capital, and other equity investments.

STEP 3
Growing and scaling

Don’t worry — a lot of investors see the substantial meaning behind #impactinvesting and the industry is on the steep rise. Investors often choose based on:

👉 Stage of business (Early or Developed)
👉 Geography
👉 Social impact area

However, it is all about creating impact and creating it in a scheme or business model that is sustainable. The common goal is to enable social good.

#SocialFinanceLab
#impactinvestment
#socialenterpreneur
#socialbusiness
#erasmusplus