After all, it comes but once a year...
Christmas is a traditional time for end-of-year punditry and New Year predictions. And who better to bring you insights and forecasts in the social enterprise and investment world than the experts at ClearlySo? For a continuing series from around the office (see Jonny Kates' tips for 2013 here) we bring you seasonal offerings from Suzanne Biegel, ClearlySo senior adviser and prime mover in the Clearly Social Angels group launched this year.
Q: What were the key developments in the social enterprise sector and social investment space in 2012?
- The official launch of Big Society Capital, with 12 investment commitments of £37million
- Successful capital-raising for instruments such as the SCOPE bond, Allia bonds and other debt instruments to prime the market, with the help of Social Finance, Triodos, and Social Investment Business/Investing for Good
- Inception of funding sources such as the Investment and Contract Readiness Fund, Social Incubator Funds and other mechanisms which recognise the need to develop pipelines of investable companies
- Launch of EU funds for social investment
- Passage of the the Public Services (Social Value) Act, due to become law in January, which requires the public sector to look at the economic, social and environmental effects of their contracting and procurement
The Public Services Act could drive recognition of social enterprises and social impact businesses as candidates for procurement not only by government, but also in the corporate sector.
Q: What were the key developments for ClearlySo in 2012?
- Funding by Big Society Capital
- Launch of and first closing of deals by Clearly Social Angels
- Big Venture Challenge next phase launch with UnLtd and Shaftesbury Partnership
- Recruitment of Elizabeth Corrado and George Pickford, boosting our team of high-quality, passionate, socially-motivated investment professionals
These developments have helped us consolidate our role as one of the premier investment intermediaries with a social and environmental impact focus.
Q: What are your predictions for this sector in 2013?
- More investors will show up to place capital and really demonstrate that there is appetite for risk-taking and commitment to build the sector. If not, it may really be perceived that there is more talk than action, and momentum will be lost
- More payment-by-results vehicles and SIBs will emerge and we will see if there really is appetite for investment
- Some enterprises will have come through BVC2, ICRF, the incubators/accelerators, and the question is whether those deals can then raise capital and demonstrate that the extra attention paid to them will have resulted in more investable propositions.
We must build investable pipeline. There are so many promising enterprises which need help getting investor-ready. And if they get that help - we MUST come together as a community of investors to demonstrate that the extra attention paid to these ventures will result in more investment. My belief is that those deals WILL attract investment and demonstrate momentum.
- More agreement on practices for social impact measurement and reporting
- More clarity on what makes an enterprise "social", to recognise that "social" is a broad spectrum into which "social first" and "financial first" both fit
- As more capital comes into the sector, seeking deals that are further along, there will be pressure on pipeline development
I believe that the pipeline is out there - some of it is not yet ready for outside investors, and some of it is not self-identified as "social" even though they have strong social values, social impact, and social DNA. We are out to find the best, brightest, and highest impact stars and those who can build strong scalable organisations.
- Continuing emphasis on investment readiness for social enterprises and social impact businesses
- More active corporate entry
- More active participation from philanthropists looking at deployng their impact capital through more diverse mechanisms
I think that 2013 is going to be a critical year for continuing to nurture the sector as we are nurturing the emergent investor base and the entrepreneurial base. We are still early! I hope that as people go off to enjoy their holidays they are thinking - how can I be even more helpful in 2013 to grow the sector. How can I be bolder in my investing, my support, my connectivity in 2013. And how can I bring others to join in, and to reap the rewards both personally and professionally, of helping to create a more sustainable world.