Martin Montero is an Issues and Awareness committee member here at Net Impact Austin. Recently he has been working with a number of individuals to build a network for social entrepreneurship. He’s calling the effort the Austin Social Business Council and the stated goal is to make Austin a hub for social entrepreneurs.
Like a nonprofit, a social entrepreneurial endeavor will have the solution to a social or environmental problem at its root, but in contrast the business model for solving the problem will be managed like a business and hopefully profitable.
Here is Martin’s Mission: Ensure that Austin maintains a world-renowned social innovation status, and a community that capitalizes on its assets - university-based research, social venture funding, a broad array of support services, an entrepreneurial culture and a rich pool of intellectual talent and leadership. This will be accomplished through a professional association dedicated to championing innovation in social business through education, networking and association events.
To ensure that potential applicants meet the criteria of a true social business he intends to employ a certification & validation standard, such as the B Corp seal. This mechanism has the added value of helping entrepreneurs meet comprehensive and transparent social and environmental performance standards, institutionalize stakeholder interests, and build a collective voice through the power of a unifying brand.
Really, it’s the same kind of frame work that helped catapult Austin to be a leading destination for high tech companies.
In early discussions it was clear that one of the key challenges social entrepreneurs will face is access to capital, particularly if they are capital intensive like manufacturing. A couple of community leaders from People Fund were in attendance. People Fund and other Community Development Financial Institutions can lend up to $200,000 for projects that will have a social or environmental community impact. And though they will lend to start ups, their main focus is existing companies.
Another approach for social entrepreneurs is to apply for grants from foundations like Ashoka and Skoll Foundation. Investors’ Circle and Good Capital are more like traditional venture capitol and expect market rate returns, but they are more relaxed in their time frame expectations. Underdog Ventures is an angel network committed to burgeoning triple bottom line companies. Local angels have been known to fund projects as well if they are really excited about it.
Social entrepreneurship is hot right now, and I believe it’s just a matter of time before more investors become as excited about making a difference as they are about making money.
I look forward to seeing how Martin progresses on this project and will keep you updated.