Proposed Social Venture fund
Social Investment Scotland (SIS) with support from the Equal Development Programme Round 2 recently kicked off a project to investigate the prospects for the creation of a sustainable social venture fund in Scotland. Such a fund would provide social economy organisations in Scotland with access to investment capital rather than loan finance. A wide range of organisations working within the sector have been identified and will be approached over the next few weeks for their views. These include support agencies such as Highlands & Islands Enterprise, financial institutions like Bank of Scotland, and a number of social economy practitioners.
Phase 1 of the project will focus on the following areas:
∙ Defining what we mean by ‘social venture’; covering charities, revenue generating social enterprises, socially driven businesses, legal structures and charitable status.
∙ The ‘Patient Capital Gap’; covering the need for additional types of risk capital, the influence of Futurebuilders Scotland and the developing market for loan finance in Scotland.
∙ The social venture market in Scotland, covering the size of the market across Scotland and types of ventures which might be supported by investment capital.
Other areas to be addressed include the most appropriate structure for a social venture fund, the interests of potential investors and how incentives such as Community Investment Tax Relief could play a role in any capital raising exercise. A report summarising the conclusions drawn from the completion of the first phase will be produced by the end of December 2005.
It is already clear that arriving at a reliable assessment of the size of the potential market for such a fund will be particularly challenging. We are therefore keen to hear from social economy organisations who see themselves as potential candidates for investment (either now or in the foreseeable future) and who are interested in learning more. As a first step we would encourage them to log onto the Social Investment Scotland website (www.socialinvestmentscotland.com) to provide some basic information about their venture. The details required are set out on the Investment Capital for Social Ventures screen. Any information provided will be treated in confidence and will be used solely for the purposes of the social venture fund project
Source: Social Investment Scotland