New Business Models Social Entrepreneurship Week 5.

Transcription

1 New Business Models Social Entrepreneurship Week 5 Spring 2018 Rotterdam Business School Bert Vermeulen l.j.t.vermeulen@hr.nl Harm Musters h.e.a.c.musters@hr.nl

2 Theory sessions (2 h) Workgroup sessions (2) + Consultancy (when needed) Week 5 Financing the venture Finance options (crowd funding etc.) Social return on investment Blockchains and currencies in a social context Activities Finance plan Week 5 In class student activities Pitching your draft group assignments Give and receive feedback Prepare final deliverables Week 6/7 Hand in individual portfolio and group assignments Week 7/8/9 Resits

3 Agenda Financing the venture Finalising your draft and preparing your presentation

4 finance banks do not jump to the occasion to fund/ help social enterprises with a loan Finance is seen by social entrepreneurs as the biggest obstacle for growth of their enterprise So...how to get money?

5 finance à Own capital à subsidies à Private investors/financial capital (shares/ stock) à Loans à Donations (funds/ family/ friends) à microfinance à Crowdfunding/ 3rd parties à Lotteries (NL: Postcode Loterij/ Stichting DOEN) à other creative ways of borrowing/ getting money

6 Funding: sources Own capital Subsidy Private investors/shares Bank loan Donation of funds Third party/crowd funding Family & friends Investment funds (shares) Donations family/friends

7 Funding Banks ECB: Less commercial lending in EU from 69 billion => 44 billion Venture capitalists Further in PLC Profit generators (over ) Angel Capitalists Pre-revenue business Is there a problem you solve? And a revenue stream?

8 Funding: Triodos bank => Mission? Mission: to help create a society that promotes people s quality of life and that has human dignity at its core. Socially Responsible Investment Funds: o companies > 50 % sustainable business o Best in class o Business ethics/tax transparency and good governance o Dialogue o Transparency o Country selection (Democracy & No UN boycotts) Lending to o Social housing programs o Fair trade companies o Micro finance investment banks and institutions

9 Qredits à Qredits (NL): Microcredit business loan up to 50,000 Only if: no other funding to obtain a business loan Start ups or less then 5 employees Business operations are conducted in the Netherlands 18 years of age or older Business plan For entrepreneurs at heart. Volunteer coaches Supported by banks & consultancy firms

10 crowdfunding The crowd, YOUR crowd is helping!

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12 Crowdfunding: 3 models Donation model: many donations are gathered to achieve a financing goal. Donors only get a good feeling from their donation. Reward model: again donors provide financial means in order to achieve a financial goal of the entrepreneur. This time they get a reward. These rewards are intangible (a thank you (your name) in the back of the photography book that you helped to finance), or tangible, like a t- shirt Equity model: purely financial, donors get a financial reward (interest, return) on the profits of the investment

13 crowdfunding: 10 most active categories

14 Crowd funding startpagina.aspx Motives borrowers and lenders?

15 Favela painting v=vvloysys6yu

16 Microfinance... Remember examples from earlier on? Grameen Bank!...Meets crowdfunding! à Kiva again: v=v2vetkuqivw à Or:

17 Initial coin offerings (ICOs) (crowdfunding) ICOs: are a new fundraising model whereby a venture issues a new cryptocurrency to raise capital whereby the venture issues a new crypto token

18 How does an ICO work? cnbc

19 Social enterprise and the blockchain Moms avenue

20 (Social) Return on Investment, or (S)ROI The return on investment formula: ROI = (Gain from Investment Cost of Investment) Cost of Investment x 100% e.g. Gains from an Investment = 500; Costs are 400. Then ROI = ( )/ 400 = 100/ 400 = 25%

21 SROI à Social Return on Investment There are many things we value that cannot be easily captured in traditional economic terms. Conventional cost-benefit analysis does not consider anything beyond simple costs and price, which is why we have developed alternative tools to measure social and environmental impacts. Social Return on Investment is an analytic tool for measuring and accounting for a much broader concept of value, taking into account social, economic and environmental factors. (

22 SROI In SROI, you look at the ROI, but also at other indicators. Examples: - the number of (extra) jobs created and the money saved (not spent!) on unemployment benefits - The money saved by a government due to the service provided by the (Social) Entrepreneur - Benefits for the environment (less pollution) - Less traffic jams

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24 Social Cost Benefit Analysis Just like a normal Cost- Benefit Analysis, but with social components. Example: Green Roofs in Rotterdam: v=rfhskfx8ybm See if you can determine the social benefits?

25 Social Costs & Benefits Costs: construction of the green roof (more expensive!) Benefits: capturing water (rain) à less puddles Social benefits: - Cleaner air/ less pollution (oxygen production) - Fight Urban Heat Island Effect - Noise reduction - Climate control - Nicer view/ terrace/ parks

26 Resource acquisition => YOUR COMPANY What are the key resources you need for your project? How to acquire these? What can you offer as internal/external resources? Who can use it? Can you give an indication of your social return on investment? Discuss your ideas with 1-2 others

27 Presentations 5 minutes max => 2-3 questions max. NO COMMENTS! Structure Pain: problem/need/motivation Target group and size Product/service: this is what we do/ solution/adding value Promise: vision/team/partners/resources Funding and revenue model Summary canvas business model Call to action Limited amount of key messages/statements What would an investor/ bank like to know/ hear? Do not tell everything! There is also a report to read! WOW & AIDA

28 Next two weeks (CLASS VELJT) CONSULTANCY 28/5 PRESENTATION & FEED BACK 30/5 You will evaluate one presentation, and you get 4, 6 or 8. à Fit need - Solution Social Enterprise à Contents/business model à Call to action à Professionalism/ Use of English à Way/orginality presentation HAND IN REPORTS 4/6 NATSCHOOL

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