Entrepreneurial Management PDF

ENTREPRENEURIAL MANAGEMENT Albert Shapiro Involves a kind of behavior that MODULE 1 1975 includes initiative...

ENTREPRENEURIAL MANAGEMENT Albert Shapiro Involves a kind of behavior that MODULE 1 1975 includes initiative taking, The Concept of Entrepreneurship organizing, and recognizing social mechanism to turn Entrepreneurship started in France after the French resources and situations to Revolution. It was the start of capitalism and practical account and the feudalism (20th century) acceptance of risks and failures. The word entrepreneur was coined by Jean Baptiste Say – a renowned French economist The Role of Entrepreneurship in Economic Growth It promotes doing something different (new) rather Economic Growth than making the existing better. Is the increase in value of goods and services Joseph Schumpeter believed that entrepreneurship produced by an economy. provides a dynamic disquilibria brought about by the It is measured as the percent rate of increase in real innovative entrepreneur that brings a healthy gross domestic product or GDP. economy. In economics, economic growth refers to growth of potential output (production) at full employment, which Entrepreneurship is caused by growth in demand, or output. By definition: Economists – Contributions of Entrepreneurship to the Economy ○ “...consists in doing things that are not Entrepreneurship employs the various resources generally done in the ordinary course of present in the economy. business routine; it is essentially a Entrepreneurs need manpower for the business phenomenon that comes under a wider operations. aspect of leadership. It is said that Entrepreneurship is the backbone of the — Cantillon, 1725 economy. ○ “entrepreneurship, rigorously defined, refers An entrepreneur is in their ability to innovate goods to the creation of a new economic entity and services. centered on a novel product or service or, at An entrepreneur is their ability to gain international the very least, one which differs significantly popularity and prestige for their country. from products or services offered to elsewhere in the market” Their willingness to take risk, risk that society will otherwise be hesitant to take. — Joseph Schumpeter, 1934 Although many people do not recognize it, The Evolution of Entrepreneurship entrepreneurs also profoundly inspire budding and potential entrepreneurs. Contributor an Year of Contribution to Entrepreneurship Contribution and/or The Entrepreneurship Theories that Explain how Economies Grow Thought Contributed Theories of economic growth maybe classify into three broad Jean Baptiste Say Refers to the shifting of groups: 1800 economic resources out of an 1. Consists of theories viewing economic growth as a area of lower and into higher natural and inevitable process. productivity and greater yield. 2. Explains economic development as a rational process Carl Menger Involves in obtaining information, brought about when men respond to opportunities in 1871 calculation, an act of will and the environment to promote their own self-interest or supervision. material welfare. Joseph Schumpeter The finding and promoting new 3. Views economic development as a result of 1910 combinations of productive economically irrational yet psychologically and factors. sociologically satisfying activities of enterprising men. Harvey Liebenstein The reduction of organizational GENERAL EXPLANATIONS 1970 inefficiency. 1. Law of nature – in 1932, Spengler explained economic development by likening a culture or society Israel Kirzner The identification of market to a living organism that grows, lives, and dies; it is a 1975 arbitrage opportunities. part of life and is something to be expected.  2. Invisible Hand – 18th century, Adam Smith advanced 6. Entrepreneurship – economist recognized that for the principle. According to Smith, any society production to take place, someone had to mobilize all including a very underdeveloped one can be made to resources ( land, labor, and capital). prosper with little or no intervention from government because economic is brought about as a natural SOCIO - PSYCHOLOGICAL EXPLANATIONS course of things. 1. Sociological Factors – sociologist explain economic 3. Cultural Diffusion – Anthropologist introduced the growth in terms of social or cultural values, norms and idea that over the ages and across the years, other structures that differentiate modern and societies have been involved in different social traditional economies. experiments in various economic, political, religious or a. Modern Societies social aspects of life. i. Unemotional 4. Racial Heritage – the belief that one race is superior ii. Interested in themselves to another on the basis of color, build and other iii. Able to relate to others (social roles genetic heritage has been around for a long time. as buyers, sellers, qualities 5. Climate conditions – Ellsworth Huntington, wrote the middlemen, etc.) most of the great civilizations flourished in the tropics iv. Known for accomplishments or the far north. He maintained that the most v. Able to relate to others stimulating climate for man involves an average b. Traditional Societies temperature range between winter and summer of 40 i. Emotional to 60 F with moderate rainfalls and frequent mild ii. Interested in the general welfare of storms. the economy 6. Challenge of the natural environment – advanced iii. Relate to others in terms of unique by A,J. Toynbee, it traces economic and cultural qualities changes to a combination of natural (geographic) iv. Known for who they are (status, phenomena and socio-psychological pressure of position in the organization, etc.) stimuli. v. Tie-up economic relationship (such as specific employer-employee, ECONOMIC EXPLANATIONS economic terms, defined 1. Technology improvements and division of labor – manufacturer and limited by a labor Adam Smith, believed that the intervention of better contract) machines and equipment brought about increased 2. Psychological Factors – identified positively as one, productivity, which together with specialization or which enterprising individuals seek to fulfill in the division of labor made economic growth possible. need to achieve. As a product of individual human 2. Neo-classical growth model – develop by Robert behavior, that is, of a person’s decision thoughts and Solo and Paul Samuelson in the 1950’s, this model actions. assumes that countries use their resources efficiently and that there are diminishing returns to capital and What is Entrepreneurship? labor increases. The act of building and creating a business 3. Endogenous Growth Theory – included a theory of enterprise. technological advancement. These models also A process of doing something new (CREATIVE) and incorporated a new concept of human capital, the something different (INNOVATIVE) for the purpose of skills and knowledge that make workers productive. creating wealth for the individual and adding value to 4. Big Push Theory – one popular theory in the 70’s society. was that of the “Big Push” which suggested that countries needed to jump from one stage to another Idea Pitching through a virtuous cycle in which large investments in Choose 3 ideas infrastructure and education coupled to private investment would move the economy to a more Prepare short elevator pitch 2 mins productive stage. ○ What is the idea 5. Population Changes – according to David Ricardo, ○ What need does it address population increases eventually lead to stagnation or ○ Why will the market buy it a final stationary state of the economy. However, ○ How will you sell it according to John Maynard Keynes, the capitalist or entrepreneurs are most likely to invest their resources ○ Where will you source raw mat, where will when there is demand for the commodity. you sell ○ Who is the ™ CATEGORIES OF ENTERPRISES 3. Startup Entrepreneur Micro-Enterprise a. A startup entrepreneur is the founder of a ○ Asset Size: less than P3 Million scalable company. Startups are often technology focused and are either Small Enterprise bootstrapped or rely on funding from outside ○ Asset Size: Over P3M to P15M investors. Medium Enterprise b. Examples of startups include Canva, Airbnb, ○ Asset Size: Over P15M to P100M Square, and Uber, to name a few. Large Enterprise 4. Solo Entrepreneur ○ Asset Size: Over P100M a. A solo entrepreneur, or solopreneur as ASSET SIZE EXCLUDES THE VALUE OF LAND they’re often referred to, is someone who operates a one-person business. Similar to a Benefits of Entrepreneurship small business entrepreneur in that they are independently owned, a solopreneur doesn’t Creates employment work with partners. These types of Improves quality of life entrepreneurs often run service-based Contributes to more equitable distribution of income businesses like consulting, coaching, or and therefore eases social unrest freelancing. b. freelancers currently make up 36% of the Risks of Entrepreneurship workforce and the personal coaching Risk of failure industry is valued at over $1 billion. Unpredictable c. A great example of a solopreneur is Inge Hunter, an Instagram marketing specialist. Long hours of work Unwanted or unexpected responsibilities 5. Innovator Entrepreneur a. Apple. Google. Amazon. Tesla. What word Rewards of Entrepreneurship comes to mind when you think of these 1. Have unlimited opportunity to make money companies? Innovation. 2. Be your own boss b. The brains behind these brands — Steve 3. Overcome challenges and feel fulfilled Jobs, Larry Page, Jeff Bezos, and Elon Musk — are examples of innovator entrepreneurs. 4. Be creative c. But what exactly makes them innovators? Entrepreneurs may be categorized into the following: And how can you tell if you’re an innovator entrepreneur? 1. Small Business Entrepreneur d. To start, ask yourself these questions: a. A small business is independently owned and operated and doesn’t have plans to i. Do you have a product or service expand into a large company. According to that’s unlike anything else that’s on the U.S. Small Business Administration the market? (SBA) ii. Are you solving a problem with your b. Local restaurant that you take visitors to product or service? when they come to town iii. Are you addressing a market or c. Favorite coffee shop customer that no one else is? iv. If you find yourself nodding along to 2. Large Business Entrepreneur these questions, then you may be a. A large business entrepreneur refers to the an innovator entrepreneur with a leaders of large companies and corporations groundbreaking business on the such as Jollibee and Cebu Pacific. These horizon. types of entrepreneurs are often C-level executives like a CEO. 6. Imitator Entrepreneur b. Its goal is to expand by developing new a. These types of entrepreneurs take an products or services—or even buying existing business, product, or service, and smaller companies—to meet consumer make it better. demand. b. Many entrepreneurs fall into this category. There can only be a few true innovators,  after all — most businesses are usually an and online courses around an anti-diet iteration of something that already exists. perspective. Through her membership c. Whitney Wolfe Herd, the founder of Bumble. business, Harrison is able to use her After co-founding the dating app Tinder, she research-driven offerings to educate her went on to create a new dating app that community about topics that are important to addressed a different market and focused on them. empowering women. Today, Bumble has around 45 million active users and is valued Entrepreneurial Process at over $3 billion. 7. Social Entrepreneur a. This type of entrepreneur strives to make a difference with their company, on either a small scale or a global one. b. Leaders at nonprofits are great examples of social entrepreneurs. 8. Buyer Entrepreneur a. Rather than building a business, a buyer entrepreneur either buys or funds another business to help them grow. b. This type of entrepreneur typically has extensive experience building companies throughout their career and uses that expertise to improve the companies they buy. c. Warren Buffet, the CEO of Berkshire Hathaway, is a buyer entrepreneur. 9. Hustler Entrepreneur a. They are driven, highly-motivated, and hustle hard to get to the top. These types of entrepreneurs are often a natural when it comes to sales and will pitch their product or service to anyone and everyone they meet. b. Spanx founder Sara Blakely is the definition of a hustler entrepreneur. The self-made billionaire built Spanx from the ground up — from creating the first prototype of the now-famous shapewear to personally reaching out to major retailers to get them to carry her clothing line. c. Are you the type of person who doesn’t flinch at a rejection email, always has your elevator pitch ready to go, and will stop at nothing to get your business in front of the right people? 10. Researcher Entrepreneur a. They have in-depth expertise about the product or service they offer and are motivated to share that knowledge with their customers. b. Christy Harrison, a registered dietician, certified intuitive eating counselor, and author, is a great example of a researcher entrepreneur. Harrison uses her background and expertise to offer private coaching MODULE 2: SOCIAL ENTREPRENEURSHIP TYPES OF SOCIAL ENTREPRENEURSHIP Nonprofits with income from products/services SOCIAL ENTREPRENEURS ARE NOT CONTENT JUST TO supplemented by external support and subsidies GIVE A FISH OR TEACH HOW TO FISH. Nonprofits with income from products/services not supplemented by external support and subsidies For-profit company that pursues financial return and simultaneously generates social outcomes Nonprofits with income from products/services supplemented by external support and subsidies Wai’anae Organic Farmers Cooperative Wai’anae Community Re-Development Corporation www.waianaeorganic.com 3 elements of Waianae Organic Farms Mission – Operate a youth leadership development training program for low-income and at-risk youth using agriculture as the teaching methodology. What is Social Entrepreneurship? Social Return on Investment – Educate community on It is the process by which individuals, startups, and health and wellness, distribute organic fruit and entrepreneurs develop and fund solutions that directly address vegetables via farmers markets, Café in Waianae social issues. A social entrepreneur, therefore, is a person who serving organic foods, teach young men and women explores business opportunities that have a positive impact on how to farm the land-Quantifiable. their community, society, or the world. Nonprofit with income from products and services that are citizens build or transform institutions to advance solutions to provided or produced and are not supplemented by social problems, such as poverty, illness, illiteracy, external support and subsidies environmental destruction, human rights abuses, and Goodwill Industries of Hawaii corruption, to make life better for many. www.higoodwill.org BOTTOM LINE 3 elements of Goodwill Industries of Hawaii Social Return on Investment (Social Impact) Mission – Provide training, job placement, and Financial Return on Investment (Profitability) support services to people with barriers to employment since 1959 Quantifiable Impact of the Venture Social Return on Investment – Served 6,470 people, SOCIAL ENTREPRENEURSHIP IN THE PHILIPPINES placed 1,079 in employment-quantifiable According to a study by ADB, as of July 2019, there were For-profit company that pursues financial return and 164,473 social enterprises in the Philippines. That’s 17% of the simultaneously generates social outcomes total registered businesses in the country. Furthermore, 71% of the social enterprises are micro, small, and medium-sized Greyston Bakery businesses. The remaining 23% are NGOs and 6% are coops. www.greystonbakery.com 3 elements of Greyston Bakery ANNA MARIA WILK Mission – Part of Greyston Foundation’s integrated Anna Maria Wilk is the Co-Founder and President of Gandang system of nonprofit and for-profits that offer a wide Kalikasan Inc, makers of Human Nature, one of the largest array of community development programs including social enterprises of natural personal and home-care product job training, housing, and child care. line in the Philippines. Through Anna’s leadership, Human Nature is focused on providing gainful employment to low Social Return on Investment – Actively recruit and skilled workers, developing high value agricultural products hire employees who have difficulty finding among partner communities and setting an example among employment in the past. Management services traditional businesses to increase the legal minimum wage. provided by Greyston Foundation. Greyston Among many awards and recognitions, Anna has received the Foundation is sole shareholder.- Quantifiable Beauty Industry Award, Woman of the Year 2017, Asia Society Fellow and Social Entrepreneur of the Year 2011 by Ernst & TO JUDGE THE SOCIAL ENTERPRISE TRACK ENTRANTS, Young. ONE HAS TO CONSIDER TRADITIONAL BUSINESS CRITERIA AS WELL AS SOCIALLY SPECIFIC ASSESSMENTS Traditional Business Criteria In fact, there were several entrepreneurs who Feasibility of business model in the chosen established social entrepreneurs to eliminate social marketplace problems or bring positive change in the society. Marketability of product or service to customer base Vinoba Bhave, the founder of India’s Land Gift Movement Potential for financial return ○ He took donated land from landowner Attractiveness for funding from additional investors Indians and gave it away to the poor and Management team strength, experience, and landless, for them to cultivate. Then after readiness 1954, he started to ask for donations from Sophisticated understanding of risk and contingency whole villages in a program he called plans Gramdan. He got more than 1000 villages by way of donations. Social Enterprise Track Criteria Robert Owen, the founder of the cooperative Integration of the venture’s social and financial movement missions ○ A Welshman who made his fortune in the — Is it reasonable to expect that the financial and cotton trade, Owen believed in putting his social goals can be achieved simultaneously? Do workers in a good environment with access these goals make sense together? to education for themselves and their children. Social Return on Investment Florence Nightingale, founder of the first nursing — How does the enterprise serve a social purpose school and developer of modern nursing practices — Are socially responsible core values expressed might be included in this category. throughout the venture ○ As a nurse, politician, and manager, she was — What is the venture’s potential to meet its social effectively a prominent social goals entrepreneur who, despite her — What is the social impact both monetized and non-conformity, took on a fearless and non-monetized of this enterprise? visionary stance in solving social and health problems. CLASSIFYING A SOCIAL ENTERPRISE ○ She organized professional training for SIX DEFINING CHARACTERISTICS AND VALUES OF nurses, wrote the first nursing textbook SOCIAL ENTERPRISE (PEARCE, 2007): (“Notes on Nursing”) , and took public 1. Having a social purpose positions in favor of health care and 2. Engaging in trading activities to achieve social philanthropic funding. purpose (at least in part) They had established such foundations and 3. Not distributing profits to individuals organizations in the 19th century that is much before the concept of social entrepreneurship used in 4. Holding assets and wealth in trust for community management. benefit 5. Democratically involving members of its constituency Social Entrepreneurs’ Areas of Focus in the governance of the organization a person‘s ability to improve her or his economic 6. Independent organization with accountability to well-being and personal dignity through opportunity. defined constituency & and wider community Harness aid to be more accountable, transparent and solutions-oriented, for lasting development. THE SOCIAL ENTREPRENEUR AND BECOMING ONE Enable access to and ensure the use of reliable, Social Entrepreneurship affordable and appropriate healthcare in Use of the techniques that start-up companies and disadvantaged populations. other entrepreneurs use to develop, fund, and Address issues of sustainable productivity not implement solutions to social, cultural, or beneficiary by beneficiary, but system-wide. environmental issues. Lay the foundation for peace and human security. Harness the capital and consumer markets that drive change by considering all costs and opportunities. THE HUMBLE BEGINNINGS Transform the way water is managed and provided, Social Entrepreneurship is relatively a new term. It long-term, for both people and agriculture came in to notice just a few decades ago. But its usage can be found throughout history. Areas where Social Entrepreneurs can create an impact Result-Oriented Employment Development ○ Social entrepreneurs are driven to produce ○ The first major economic value that social measurable returns. These results transform entrepreneurship creates is the job and existing realities, open up new pathways for employment Estimates ranges from one to the marginalized and disadvantaged, and seven percent of people employed in the unlock society‘s potential to effect social social entrepreneurship sector. change Innovation / New Goods and Services Mission Driven ○ Social entrepreneurs develop and apply ○ Generating social value—not wealth—is the innovation important to social and economic central criterion of a successful social development and develop new goods and entrepreneur. While wealth creation may be services. Issues addressed include some of part of the process, it is not an end in itself. the biggest societal problems such as HIV, Promoting systemic social change is the mental ill-health, illiteracy, crime and drug real objective. abuse which, importantly are confronted in Resourceful innovative ways. ○ Because social entrepreneurs operate within Equity Promotion a social context rather than the business ○ Social entrepreneurship fosters a more world, they have limited access to capital equitable society by addressing social and traditional market support systems. As issues and trying to achieve ongoing a result, social entrepreneurs must be sustainable impact through their social skilled at mobilizing human, financial and mission rather than purely political resources. profit-maximization. Another case is the American social entrepreneur J.B. Schramm ENTREPRENEUR SOCIAL ENTREPRENEUR who has helped thousands of low-income high-school students to get into tertiary education. “STOP DREAMING AND START DOING” SOCIAL ENTREPRENEUR is somebody who takes up a pressing social problem and meets it with an innovative or path breaking solution. Since profit making is a secondary objective, therefore they are people who are passionate and determined about what they do. They possess a very high level of motivation and are visionaries who aim THE ROLE OF TECHNOLOGY at bringing about a change in the way things are. The Internet, social networking websites and social QUALITIES OF A SOCIAL ENTREPRENEUR media have been pivotal resources for the success and collaboration of many social entrepreneurs. Ambitious Using wiki models or crowdsourcing approaches, for ○ Social Entrepreneurs tackle major social example, a social entrepreneur organization can get issues, from increasing the college hundreds of people from across a country (or from enrollment rate of low-income students to multiple countries) to collaborate on joint online fighting poverty. They operate in all kinds of projects organizations: innovative nonprofits, social- purpose ventures, and hybrid organizations PROBLEMS FACED BY SOCIAL ENTREPRENEUR that mix elements of nonprofit and for-profit organizations. 1. Funding 2. Strategy and Long-term Focus Strategic 3. Remaining True to the Mission ○ Like business entrepreneurs, social entrepreneurs see and act upon what others 4. Lack of Skilled Workforce miss: opportunities to improve systems, 5. Social and Cultural Effect create solutions and invent new approaches 6. Lack of Government Support that create social value. THE SOCIAL ENTERPRISES possible will make sure the social enterprise responds These are businesses whose primary purpose is to to community needs. A briefing on how USLS create a positive community impact rather than to conducts community engagement will be done next generate profits for individual shareholders. They meeting. apply the power of the marketplace to advance social, Community engagement can look different depending cultural and/or environmental agendas. Thus, they on the issue you are interested in exploring and who measure success with the attainment of both you want to talk to about that issue. economic and social value. Respect, flexibility, patience, and sincerity are four key values that guide all community planning and activities. Is the Social Enterprise the right business model? This will ensure everyone feel that they have had the Social enterprises have a mission to address social, opportunity to speak and that their opinions are environmental, or cultural challenges by reinvesting valued. profits above operational expenses back into their missions and using a triple bottom line (people, A social enterprise has the opportunity to promote a planet, profit) to measure their success. sense of community. It also has the opportunity to take advantage of and boost existing networks. It is Social enterprises take many forms, including sole equally important to know the community you are proprietorships, non-profits, and co-operatives to serving and their needs. This way, you will have a name a few. Social Entrepreneurs are people who bigger impact on your community see a social, environmental, or cultural problem in their community and want to solve it. Who can be involved in the community? A social enterprise is the ‘vehicle’ that a social Try to include a wide range of people (youth, elders, entrepreneur uses to deliver their solution to the low-income, women, working/unemployed etc.) so that different problem. perspectives can be explored and inform your process Social enterprise is somewhere in the middle between People interested in the topic your social enterprise is commercial businesses and registered charities. addressing Social enterprises use a blended return on investment (people, planet, profit) to measure their success. Community Leadership (Municipal Mayor & Council; First Nation Chief and Council; Other Political Leaders) Organizations Working in this Sector (Not-for-profits, Co-operatives, For-profit Businesses, Collectives) Educational Institutions (Elementary and High Schools, Colleges, Universities, and Vocational Schools) Community Engagements STEPS IN CREATING A SOCIAL ENTERPRISE: 1. The first step is talking with people who have first-hand experience with the issue(s) you are trying to resolve. 2. What community is your social enterprise serving (or will it serve)? Is it a municipality, a First Nation, a region or a province? Or is it a community of interest 3. Knowing which community you intend to serve is important to the creation of your business concept and structure. THE SIGNIFICANCE OF WORKING WITH A COMMUNITY The goal of community engagement is to include individuals’ voices in the process of planning a social enterprise. Gathering as many voices together as  fund expansion. The entrepreneur of a social business venture seeks investors who are interested in combining financial and social returns on their investments. ○ Marketing Oriented COMPARE AND KNOW WHERE YOU ARE STANDING TYPES OF SOCIAL ENTERPRISES Leveraged non-profit ventures ○ The entrepreneur sets up a non-profit organization to drive the adoption of an innovation that addresses a market or government failure. ○ In doing so, the entrepreneur engages a cross section of society, including private and public organizations, to drive forward the innovation through a multiplier effect. ○ Leveraged non-profit ventures continuously depend on outside philanthropic funding, but their longer term sustainability is often under question given that the partners might change / lose interest / be unable to keeping funding the venture. ○ Fundraising Oriented Hybrid non-profit ventures INSTITUTIONS IN SOCIAL CAPITAL MARKETS ○ The entrepreneur sets up a non-profit organization but the model includes some Value banks have the same role as commercial degree of cost-recovery through the sale of banks in traditional capital markets. They take goods and services to a cross section of deposits from savers and give loans to individuals institutions, public and private, as well as to and companies. Since Value Banks focus on the target population groups. social sector, they have a better understanding of the business models and the specific needs and ○ To be able to sustain the transformation requirements of social enterprises. In addition, the activities in full and address the needs of savers sometimes accept a lower interest rate, which clients, who are often poor or marginalized can be passed on to the social enterprise. from society, the entrepreneur must mobilize other sources of funding from the public and/or philanthropic sectors. Such funds can be in the form of grants or loans. ○ Quality oriented Social business ventures The traditional role of investment banks is the ○ The entrepreneur sets up a for-profit entity or financial advisory of corporate clients and the business to provide a social or ecological matching of supply and demand. Social investment product or service. advisers take over the same role in the social sector. ○ While profits are ideally generated, the main They support the social enterprise in setting up an aim is not to maximize financial returns for appropriate financing structure and finding the right shareholders but to grow the social venture investors. and reach more people in need. ○ Wealth accumulation is not a priority and profits are reinvested in the enterprise to  A stock exchange is an efficient public platform to ○ Funding platforms are similar to social match supply and demand. On stock exchanges, stock exchanges as they provide a platform companies can issue shares or bonds which are then to match demand and supply, but without traded continuously. Companies have access to a active trading. large capital pool and investors can sell their shares or bonds without delay at any time. A social Stock exchange can be an attractive financing option for social enterprises with a proven business model and significant financing needs. At the moment, four social stock exchanges with trading activities are being incorporated. WHY BUILD A SOCIAL ENTREPRISE? Social enterprises contribute to vibrant economies. In addition to creating new jobs and enabling non-profits organizations to sustain their services, there are many areas where social enterprises are positively impacting on healthy and sustainable communities. High-net-worth individuals and foundations have started to rethink their funding strategies adopting Stimulating community economies: In some venture capital techniques for their funding strategies. communities, social enterprise can employ people This new form of financing in the social sector is who otherwise may to migrate or endure long known as Venture Philanthropy, High Engagement commuting times. Communities that embrace social Philanthropy or Social Venture Capital. The term is enterprises are supporting jobs and helping to build used differently across the world, but can be defined enduring local economies as having the following characteristics (John, 2006): Stimulating community economies: In some High engagement communities, social enterprise can employ people Tailored financing who otherwise may to migrate or endure long Multi-year asupport commuting times. Communities that embrace social Non-financial support enterprises are supporting jobs and helping to build Organizational capacity-building enduring local economies Performance measurement Environment & biodiversity: Upcycling, recycling, ○ Thus, social investors concentrate their food production, composting, eco-tourism, nature funding, and support only a limited number wildlife and preservation sanctuaries can all be set up of social enterprises. Venture Philanthropy to tackle climate change and social impact. funds also support the social enterprise on a Inclusivity: In many communities, social enterprise non-financial basis with management can help bridge the gaps between young and old, or consulting or pro bono services. settled and Travelling communities, or new Investment funds act as intermediaries between immigrants into smaller towns and villages. demand and supply by bundling funds from investors Overcoming social exclusion: Social enterprises that they subsequently invest in certain asset can work with those more vulnerable or overlooked in classes. This approach reduces the transaction costs society by providing apprenticeships, training, skills, and the risk through diversification effects. Social resources and related opportunities for a living wage; investment funds apply the same principle in the offer affordable housing and offer the support needed social sector. They collect funds from individuals or to assist those in difficulty. foundations that they invest in a given sector such as microfinance or the solar industry. Community and Business: Social enterprises can often play a vital role in bridging businesses with communities and offering companies the chance to invest or purchase in a more socially responsible manner. Rating and research agencies publish ratings and research reports on publicly listed companies to support investors in their capital allocation decisions. In the social sector, funding consultancies play this role. They publish research reports on different sectors and advise funders on which organizations to support.