Introducing our new series of blogs exploring the gritty reality of social investment.
A few years ago, one of the big challenges we faced was translating the theory of social investment into practical examples that charities, social enterprises and investors could relate to. So we concentrated on building up a bank of case studies, making films with organisations that have used social investment, running a series of guest blogs and supporting those that have used social investment to talk to their peers at events. We’re really grateful to everyone who has shared their stories. They have played a key role in inspiring others to think about how social investment might be useful to them.
But taking on finance and investment is not an easy journey. And sometimes these success stories only shed a light on part of the experience of charities and social enterprises, and of investors. This is why we’re launching a new series of blogs on our website – the Gritty Reality of Social Investment. In these blogs, we’ll share stories of where social investment has gone wrong or been really difficult. These stories will be anonymous, to encourage people to be as honest as possible.
The series kicks off today with a blog from one social entrepreneur who got there in the end – but after a rollercoaster ride. If you have a story that you’d like to share, we’d love to hear from you – and will treat any conversations in confidence.
We still believe that social investment is an important tool for charities and social enterprises to be able to use in achieving their social missions. But through sharing these stories we hope we can all learn from previous mistakes and be better prepared for the challenges ahead.
When I say that the investment process was an interesting one; I say that loosely.
Entering with no prior experience or knowledge, I had expected some highs and lows. I started the investment process like a child at Christmas; excited and eager what was to come.
At the end of the process, I quietly uttered the words, ‘I just want it to be over,’ to my mentor, and I wholeheartedly meant it. It was an emotional rollercoaster; there were good times - moments when I was ecstatic, and there were bad times - moments when I was mentally and physically exhausted - crunching numbers over sleepless nights. It was confusing, draining and emotionally turbulent.
Generally, I’m a very cautious person, and I think this came in handy during the investment process. I made solid assumptions for every single number that I had projected, which stood me in really good stead for reassuring all the investors that I spoke with. Failure statistics amongst startups are well acknowledged - and at the end of the day, you’re a start-up with very little experience, so as well as investing in the business, they are investing in you as a person. Let them know your weaknesses too, as it will also let them know how they can help you the most.
A few months into the process, I was deeply involved in conversations with a very large institutional investor. I was ecstatic; and confident that the deal would go through, and yet, at the last minute - due to internal circumstances - it fell through. For anyone going into the investment process, I would say have a backup plan. I didn’t have one, and in the end, I had to rush around to secure another investor - and thankfully, managed to do so. My final investment was so last minute, that I wasn’t even sure that it was going to be successful. The programme that I was on had a deadline in order for me to receive matched funding, and I only managed to do so within the final week. Needless to say, it was a very stressful time - with many sleepless nights!
Once I received an offer, following the misfortune of the previous deal, I was cautious. But I was also confident of my business - since this was the second investor - so I negotiated. Entrepreneurs are well used to negotiating - and many think that this is not possible with an investment deal. At this point, I knew that the investor clearly liked me, and the business, so I tried my luck. I went back and forth with my investor at least ten times until I got to an offer that I was comfortable with - and honestly, I think he respected me more for it.
I’m at the stage now where the money is close enough to being in my bank account and I’m thankful. It has been a process that has been long and drawn out, and whilst I’ve learnt a lot - I’m most certainly glad it’s over. I’m now looking forward to getting back to the ‘real job’ of building my business and my team with a new level of financial support.
By an anonymous Social Entrepreneur