Investors will take social business under their wings, say experts

Investors will take social business under their wings, say experts
David Ainsworth, Third Sector
28.01.09


Social businesses will see a sharp increase this year in the number of ‘angel investors’, who offer cash and expertise to growing companies, social finance experts have predicted.


Jonathan Jenkins, director of ventures at social enterprise support charity UnLtd, said he believed the sector was fast becoming more attractive to angel investors and there was a need for more money for medium-sized social organisations.


‘There’s a clear gap in the market,’ he said. ‘Angel investors fit that niche perfectly. They are also able to help build skills at a time when entrepreneurs may need it.’


Rebecca Harding, a partner at Delta Economics, which promotes and researches entrepreneurship, said: ‘A lot of traditional investments that have been seen as safe are now seen as risky. Angel investors are looking for bespoke deals where they can take a personal interest.’


Daniel Brewer is a director of Equity Plus, a partnership between a charity and two private businesses that arranges deals between angel investors and ethical businesses, said more charities and social entrepreneurs were ready to take funding.


‘There’s interest from both sides,’ he said. ‘There are a lot more investment-ready social businesses out there. Charities as well as social enterprises are becoming more entrepreneurial and attractive to investors.’