Top Tips for Approaching Social Investors

Early research had shown that Voluntary, Community and Social Enterprise (VCSE) organisations were struggling to scale and one of the reasons for this was lack of access to investment.
Out of this came Big Society Capital, and the emergence of social investors keen to invest in the growth of the sector. However, since their launch these social investors have struggled to find sufficient numbers of good (VCSE) organisations that are ready for investment.

Typical issues include lack of market research and business planning, poor management infrastructure, and poor evidence of impact. The potential was there, buy many just aren’t ready to pitch to social investors.

As a result, specific grants such as Big Potential, Stepping Stones and Access have been launched to help the VSCE sector to become investment ready.

Economic Change assists VCSE organisations to become investment ready, providing support with market research, developing a business plan, implementing systems, developing management processes, and demonstrating social impact. Contact us to find out more or come along to #CriticalMass2015 Conference to hear us speak on the Social Investment Panel.

You can find some our top tips below:

Prepare a 3-year business plan – Is it is important to clearly articulate your key performance indicators for projected growth in terms of sales, finance, resources and delivery for the next three years, and to have a business plan prepared with information to back up these projected figures. Having a detailed business plan with robust market research and evidence of planning is the key to convincing social investors that there is a solid foundation to your figures, and that risks have been considered.

Refine your management processes and system – As your organisation scales, the management team will have to oversee performance, quality control and delivery of staff at a distance. Social investors will therefore want to see that the organisation has clear management processes and systems in place and working effectively. This will ensure you are ready to manage and monitor your growth and relationships with a greater number of clients, team members and suppliers.

Build an effective Team Profile – A great business is all about the people who run it and the range of skills and experience you have in place. Whether it’s board members, directors or delivery staff, be sure to communicate the amazing range of skills and experience you have on board, or that you intend to recruit using the investment. This will provide confidence and assurance to social investors that you know what you need in place in order to deliver.

Have a Clear Unique Selling Point – Have you undertaken a robust current competitor analysis, and do you know what makes you different your competitors? Do you know why your customers buy from you? From this research, you should be able to clearly articulate your unique selling point. Social investors are interested in new innovative opportunities and will feel reassured if you offer something distinctive in the market place.

Showcase a satisfied client base – Can you demonstrate a secure, satisfied and established client base that loves your product or services, and can you evidence that you have a scalable client base if you secure investment to expand? Market research or soft selling is important to demonstrate there is demand and need for your services and products in the market segments or locations you are targeting. Can you provide evidence of support or an intention to buy, from new customers?

Demonstrate evidence of Impact – Social investors are interested in the social, economic and environmental impact that you are creating. Providing a summary of your outputs and outcomes to demonstrate the value and credibility of your services will be essential, to convince them of your ability to achieve your social mission.

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