Social entrepreneurs and financial firms each bring something to the table that the other needs. From their perspective, social entrepreneurs thrive on using their businesses to impact society in real and meaningful ways. Meanwhile, financial firms are adept at generating profits, but sometimes need additional guidance in making a more positive social impact. Working together can benefit both in the following ways.
Financial Firms Know the Right People
Often social entrepreneurs fail in attempting to cultivate relationships with financial backers who are more capable of funding their goals. When social entrepreneurs partner with financial firms, however, they have access to a wider pool of networking opportunities. The entrepreneur can meet stakeholders and firm partners, any of whom may be willing to sponsor, mentor, guide, or invest in their projects. This relationship also benefits the firms in that they can more deeply bond with clients who share the same interests as the social entrepreneurs with whom they have partnered.
Financial Firms Have the Expertise to Fine-Tune Funding Models
While social entrepreneurs may have an eye for developing their specific area of interest into a business, they’re likely not experienced in raising funding to support those projects. This is where a financial firm’s partnership becomes especially useful. The firm can help develop a better philanthropic funding model that will attract wider attention and draw a greater number of investors to the project. Financial firms also have the expertise to assist entrepreneurs in getting program related investments that don’t have the high administrative and operating costs that usually come with raising this type of capital.
Applying Tech Start-Up Thinking to Social Enterprises
This type of union can also bring innovative new approaches from other sectors as well. As financial firms often involve themselves in businesses of every industry, they become knowledgeable about what new approaches work best. By introducing these operating styles and business models to social entrepreneurs, they can help one another maximize the impact that their partnership makes on society. For example, utilizing approaches common in the tech industry, where products are first tested on a small beta group, operating costs can be reduced for the entrepreneur.
By bringing the financial sector and tech sector together with social entrepreneurs, the future for each of three industries can become more hopeful. Working together in strong partnerships will bring the best aspects of each sector to bear in developing a more cost-efficient and productive business model.