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Your business stage is GROWTH.

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At this stage your business should already prove a solid experience and documented experience with customer, inclusive of relevant key performance indicators (KPIs) to support your business performance overtime.

You will need also to support your business with a clear growth strategy, to understand when you will start being a profitable business (reaching break-even).

→ The most appropriate financing options are:

1. Accelerators

Why?

→ Support start-ups with a structured program along fixed curricula. They tend to look for companies with bigger growth potential & are focused on finding companies looking to grow either nationally or globally. They usually provide financial support through the provision of seed investment in exchange for less equity (5% to 10%)

Important to know:

→ The accelerator experience is a process of intense, rapid, and immersive training aimed at accelerating the life cycle of young innovative companies, squeezing years’ worth of learning-by-doing into just a few months. Application process is highly competitive: Team composition; business scalability & growth potential; product & business model validation are regarded as key aspects to be admitted by an acceleration program.

2. Venture philanthropy and social Investment

Why?

→ Venture philanthropy (VP) and social investment (SI) address the growing need for support and flexible funding. Through three core practices, VP/SI offers an effective, high-engagement and long-term approach to supporting Social Purpose Organisations in generating social impact.
The process through which a venture philanthropy organisation or a social investor (VPO/SI) finds the most suitable financial instrument(s) to support a social purpose organisation (SPO), choosing from the range of financial instruments available (grant, debt, equity, and hybrid financial instruments). The choice of the financial instrument(s) will depend on the risk/return/impact profile of the VPO/SI and on the needs and characteristics of the Social Purpose Organisations .

Important to know:

→  (1) High engagement:
venture philanthropists have a close hands-on relationship with the social entrepreneurs and ventures they support, driving innovative and scalable models of social change. Some may take board places on these organisations, and all are far more intimately involved at strategic and operational levels than are traditional non-profit funders.

→  (2) Tailored financing:
as in venture capital, venture philanthropists take an investment approach to determine the most appropriate financing for each organisation. Depending on their own missions and the ventures they choose to support, venture philanthropists can operate across the spectrum of investment returns. Some offer non-returnable grants (and thus accept a purely social return), while others use loan, mezzanine or quasi-equity finance (thus blending risk-adjusted financial and social returns).

→  (3) Multi-year support:
venture philanthropists provide substantial and sustained financial support to a limited number of organisations. Support typically lasts at least three to five years, with an objective of helping the organisation to become financially self-sustaining by the end of the funding period.

→  (4) Non-financial support:
in addition to financial support, venture philanthropists provide value-added services such as strategic planning, marketing and communications, executive coaching, human resource advice and access to other networks and potential funders.

→  (5) Organisational capacity-building:
venture philanthropists focus on building the operational capacity and long-term viability of the organisations in their portfolios, rather than funding individual projects or programmes. They recognize the importance of funding core operating costs to help these organisations achieve greater social impact and operational efficiency.

→  (6) Performance measurement:
venture philanthropy investment is performance-based, placing emphasis on good business planning, measurable outcomes, achievement of milestones, and high levels of financial accountability.