Weekly Review May 23-27

In honor of the upcoming SOCAP/Europe conference, this Weekly Review focuses on social entrepreneurs and the challenges they face in the industry, most prominently the task of finding a balance between financial and social returns. 
SOCAP Social Entrepreneur Spotlight Series from Social Capital Markets

SOCAP/Europe (at the intersection of money and meaning) is in on in Amsterdam next week: May 30, May 31, and June 1. Our own Femi Akinde of SlimTrader and Sam White of Promethean Power Systems are both attending. Track Sam’s SOCAP adventure on his blog, Sam at SOCAP. SOCAP spotlighted Femi earlier this month. In the Spotlight Series, SOCAP asks the interviewees what they are working on and what problem it solves. Many entries also feature commentary on roles in the Social Capital Marketplace and reasons for attending SOCAP conferences. Other great spotlights have included COO Dennis Dijkstra from Movirtu and founder and CEO Christine Eibs Singer from E+Co. SOCAP focuses on both mobile technology and alternative energy innovations in developing countries, falling in line with our laser sharp focus. In fact, we first discovered our most recent portfolio company, SlimTrader, at SOCAP last year. Check out the Spotlight Series to learn more about who’s attending this year.
In the wake of Sankalp Forum earlier this month, there have been many articles about the “ecosystem” and reflections on social entrepreneurship, impact investing, best practices, and the structure of the industry overall. Sankalp 2011 brought together entrepreneurs and investors alike, all with the common goal of providing affordable good and services to those at the Base of the Pyramid. It’s obvious that the flow of money at the BoP is not what it is at the significantly smaller ToP. Add this to the list of challenges including high costs, lack of infrastructure, risky and unstable markets. These are all normal challenges that any entrepreneur would face, but a social entrepreneur must consider their social returns as well as their financial. However, by finding innovative ways to meet the needs of the world’s poorest citizens and realize the potential opportunities for change and impact, social entrepreneurship can create value for all involved.
Beyond Start Up” by Tony Sheldon from Beyond Profit
SELCO Solar Panels in India
As the social enterprise industry matures, we are seeing more articles discussing industry challenges and ways to overcome them. Tony Sheldon first shares his thoughts on financing, a topic that very much affects and is influenced by Invested Development. It’s difficult to match impact investors with the right social entrepreneurs and vice versa. The investor and entrepreneur must have a clear direction of the future of the business both financially and socially. Another challenge, rooted in required level of scale in order to maximum social impact, is managing human resources in emerging markets. Acquiring talent and paying fairly while meeting financial and social returns is a time and resource consuming challenge. Sheldon uses SELCO India as an example of a social enterprise that is handling their human resource challenges effectively and innovatively. SELCO seeks to “maintain a 50/50 balance among its staff between those who work there because of the social mission with those simply seeking a good job with fair pay and have the skills needed to do their jobs well.” The overall goal is to strike a balance between the financial goals and the social goals. Sheldon suggests that scale is “the link between profitability and impact.” Once again, however, striking a scaling pace that doesn’t compromise the mission or model is crucial.
Yesterday, I had the pleasure of speaking with Simon Rolland, the Secretary General of the Alliance for Rural Electrification. We discussed the alignment of values that Invested Development shares with ARE. We share the mindset that renewable energy technologies can reduce poverty and are a profitable business practice both in developed and developing countries. In this article, Rolland discusses challenges that social entrepreneurs face – they must meet rural customers’ needs and tailor the products and services accordingly.  For energy solutions, business models and pricing models must fit the consumers’ needs and ability to pay, not the other way around. The article is rich with facts, data, examples of success stories, and ways to overcome challenges in electrifying rural areas in developing countries.   

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