Social venture capital is a form of venture capital investing that provides capital to businesses deemed socially and environmentally responsible. These investments are intended to both provide attractive returns to investors and to provide market-based solutions to social and environmental issues. Social venture capital can refer to debt, equity or mezzanine investments in socially oriented enterprises, which includes BoP (Base of the Pyramid)-targeted efforts to stimulate economic development in the poorest regions of the world.
Among the firms that deploy social venture capital include
- Renewal2
- Acumen Fund
- Grassroots Business Fund
- Triodos Bank
- Venturesome Fund
- Aavishkaar
- Omidyar Network
- Shell Foundation
- Gray Ghost Ventures and First Light Ventures
- RSF Social Finance
- Root Capital
Social venture capital is a form of venture philanthropy and impact investing. Organizations providing services to the SVC sector include I-DEV International (management strategy, business scaling, portfolio improvement, and exit strategy) to GIIRS, which is an initiative sponsored by the Rockefeller Foundation and others to create standardized metrics by which to compare social investment performance and criteria. Further service providing services are Aspen Network of Development Entrepreneurs (ANDE) and the European Venture Philanthropy Association (EVPA), an association that covers venture philanthropy funds in Europe that finance charities, revenue generating social enterprises and socially driven business. These growing services are indications of the SVC sectors' increasing popularity and development. While many of the first round of SVC funds established, did so with a largely non-profit, socially oriented focus (vs. one focused on profitable returns and long-term success), funds are beginning to increasingly recognize and put weight on the importance of exit strategy, ROI (financial Return on Investment) and SROI (Social Return on Investment), which includes conducting greater due diligence into investments and supporting capacity building or technical training for portfolio company management.
Famous quotes containing the words social, venture and/or capital:
“If you give me your attention, I will tell you what I am:
I’m a genuine philanthropist—all other kinds are sham.
Each little fault of temper and each social defect
In my erring fellow creatures, I endeavor to correct.”
—Sir William Schwenck Gilbert (1836–1911)
“Courage charms us, because it indicates that a man loves an idea better than all things in the world, that he is thinking neither of his bed, nor his dinner, nor his money, but will venture all to put in act the invisible thought of his mind.”
—Ralph Waldo Emerson (1803–1882)
“If Los Angeles has been called “the capital of crackpots” and “the metropolis of isms,” the native Angeleno can not fairly attribute all of the city’s idiosyncrasies to the newcomer—at least not so long as he consults the crystal ball for guidance in his business dealings and his wife goes shopping downtown in beach pajamas.”
—For the State of California, U.S. public relief program (1935-1943)