by Servane Mouazan
We put up this post together as we have had several conversations about the rationale behind funding and how to “recruit” supporters for your social business.
Do you really want a
funder that is looking for safe bets, and polished, problem- free
companies? You might have a decent track record, but you also have
issues to fix and learning to do. Most of the time, when a venture philanthropy organisation says “We will not back you”, it really
means no, and it’s because there’s a legal or strategic reason. But when they - maybe - want to back you, they might ask a few things from you before signing off the deal.
When you select your future financial supporters, think of the following:
1. It’s important you understand the perspective of the donor/investor you have selected. Do the due diligence on the donors. Are they clear about why they are backing certain organisations above others? How easy are they to work with? Look at the skills of the board and also the portfolio of ventures they have backed to date, they constitute the knowledge capital that will come on top of the funding. They give away the values that underpin the organisation. Look in the organisations that the funder backs, ask yourself what was the growing pain that needed to be dealt with.
2. You want a funding organisation that will help you move forward and take you out of the “awkward stage”. So don’t be afraid to show weaknesses and your failures in the past and talk about how you have learned from them. If you don’t, your pitch will sound unrealistic. The backers need to know how they can help you.
3. Put together a flexible due diligence pack- a simple file folder with the basic key information - the material the management works with to manage the business.
The clearer you are about your own business and your data, before you approach funders, the better the relationship will start.
Be ready to have the
pack relevant to the type of funders you are going for. It’s about where
you are at now, make sure to remove any outdated information!
4. Don’t try to fit funding agendas at the cost of your mission and real social impact!
5. Keep practicing – there is a conversion process between the charity world to the venture capitalist’s world.
6. Yes paperwork and data are important, but it’s not all about ticking boxes. Professional investors also have instinctive skills they use when judging your proposal. They are also interested in people who have the right attitude and a clear story to tell.
7. You can’t escape it, you have to know your numbers.
If you can’t talk about that number on the spreadsheet, rest assured it is
the detail the board will ask you about! When you pitch, stay clear and
succinct, make sure the board can feel authenticity, direction, and
8. Choose your professional volunteers carefully, as it can sometimes turn into a nightmare. Some venture philanthropists do spend a lot of time in the matching of volunteers with social businesses. A healthy support organisation will have board members who are very hands on and get involved as executive investment committee members, using their broad skillset. Candidates go through their sniff test, based on years on experience of seeing companies fail or succeed. They are engaged by taking a partner role, like a mentor, and also tap in their network to bring in additional people.
So, yes indeed, impact investors too should be able to deal with growing pains and hurdles…
Check the other posts on this ImpactWomen blog to grow your skills around fundraising, governance, operations, etc. Let us know how you are progressing!
Time to sit down (or do a yoga pose) and answer straight questions about how you run your social business and how you will deal with this new opportunity, as you will need people to back you up financially…
Read the article and come back to ask yourself these questions, candidly, brutally, authentically… (It’s like a chatbot without the rings and bells…!)
- What is your market… Really?
- Don’t try to do top-down market forecast. Be realistic and think bottom-up.
- What is a deal for you?
- What is your timeline and the effort involved?
- How long does it usually take for you to close a deal?
- What does it take for you to close a deal?
- What will be different this time?
- How do you know this?
- If I give you money, I really want to see you invest it in areas
that give you more traction (Momentum), whether it is to develop a
product or spend more on marketing or upskill you.
- Show me a good business model, rather than a forecast (Investors never really believe forecasts because they know you have to change your prospects all the time and they are here to help you think differently…)
- Show me a client! People rarely invest in a plain Power Point presentation.
- It is useful to think commercially and to act more responsibly with the money.
- Commercial sharpness and discipline are quite useful whether you want to make money or not. Or whether you will redistribute your profit or not…
- If you can’t afford to pay the bills, you really have to question why you are doing this.
- The good thing with social enterprise, is that you can balance non-commercial with commercial activities, AND being viable is a duty for all entrepreneurs!Read more
During one of our previous Make A Wave incubation programmes for women in social enterprises, we welcomed Ms Sarah Ryan, an advisor for ASTIA.
Astia is a global not-for-profit organization built on a community of men and women dedicated to the success of women-led, high-growth ventures and to the eradication of the need for the organization within the decade. The Astia method is designed for entrepreneurs by entrepreneurs who understand the value of extraordinary relationships and believe in giving back. Designed for high-growth companies at all stages, the Astia offering is implemented by over 1000 volunteer members of the Astia Advisor Network that includes more than former and current CEOs and investors. Astia is an extremely committed community of advisors, investors, industry leaders, and entrepreneurs.
Sarah understands social enterprise. Besides being an advisor for Astia
Europe, she has been a Mentor for the Prince’s Trust, Women Like Us and has
contributed to Pioneers of Prosperity Awards, conducting on-site financial due diligence.
The questions she is always asking social ventures leaders:
- There’s one bottom line: how good is your company for your community, your employees, your customers, your shareholders, and importantly, is it viable?
From Astia’s point of view, Social Enterprises will be looked at like any other enterprises (if they also are a company limited by shares). Venture Capitalists want to see at least a prototype.
They love when you speak a language they grasp (and if they can grasp your language). They want to understand your big story, your plan for scaling, and how you will make it sustainable. You can (and you should) articulate how you are going to “give back’ or “pay it forward” by creating value - if you create employment, if you create other businesses- and that you need to reinvest money in the business to be able to do so.
Whatever the story is, you need to be self-sustaining.
VC’s are looking at investing large sums (+/- £200 000) to help you going to scale. Angels will be considering smaller amounts.
Anyhow, they won’t be interested in writing you a cheque for £25,000 for an office space and a member of staff for 2 years.
So the 5 elements that you will need to polish before starting to approach VC’s will be:
1) A prototype of a product and a clear explanation of what that product is!
2) A real team (knowing what gaps your team has is as important as
having a fully formed board). If the venture sounds interesting, VC’s
are likely to ask to speak to your management team.
3) The assessment and the proof that there is a market for this product.
4) Relevant stakeholders to bring this venture to fruition…
5) Interest in learning, the ability to take feedback, to be ready to be open and make changes.
But more importantly, they want to hear about the BIG VISION!
FACTS to bring perspective to your journey:
- VC’s will look at dozens and dozens of proposals a week.
- They will all do a different amount of Due Diligence.
- They will want to talk to your customers
- They will want to meet your management team
- They will want to see results of the market research.
- They will find a way to know more about your industry!
- They will send you away with more and more homework and collect more evidence (that is if you have secured a first meeting with them and they haven’t yet said NO…)
If you have some government funding, they might be worried about the type of strings attached.
If you are involved with VC’s, remember, they’d love to discover the next Google, they would love your business to be highly scaleable.
You might be running a social enterprise and considering yourself innovative, but by saying this during your pitch, you’ve lost a precious opportunity (5 or 10 seconds?) to tell them directly WHAT YOU DO AND HOW YOU BRING VALUE.
nb: most of them are skilled enough to judge if something is innovative or not.
So remember… it can be a long process but you will learn a lot. They really want to see your business succeed, especially if they are to be involved!
So, who are you going to call now?
in London, our Ogunte #ImpactWomen #GoodBreakfast audience wanted to know more about Machine
Learning (ML) and
Artificial Intelligence (AI), the truth, the misconceptions, and how
we can use them in our social enterprises, and shape the future of work. Here’s the summary of our session, packed with resources!
This session was hosted and animated by:
It’s important to explore what Machine Learning and Artificial Intelligence are really about, and what they can and can’t do.
“Artificial intelligence is intelligence demonstrated by machines, in contrast to the natural intelligence displayed by humans and other animals. In computer science AI research is defined as the study of “intelligent agents”: any device that perceives its environment and takes actions that maximize its chance of successfully achieving its goals”
Read about the fascinating history of Artificial Intelligence starting in Antiquity.
Then have a look at this A to Z cheat sheet about the terms that are frequently used and misused on the topic.
AI is not limited to a story of robots. That would be a pretty simplistic way to describe what it is…
So let’s distinguish Weak AI (very narrow, what Artificial Intelligence is today), Artificial intelligence which is specifically programmed and focused to execute a narrow task effectively. Fos instance: only facial recognition or only internet searches or only driving a car
We are far from taking over the world!
There might be some AI applications coming together and solve big problems, however we are not there yet …
The Future of Life Institute (a volunteer-run research and outreach organization in the Boston area that works to mitigate existential risks facing humanity, particularly existential risk from advanced artificial intelligence) say that to have a realistic time line about the developments in AI, you need to at least double your time expectations to see any substantial developments.
And then there is “Strong AI”
The main vision is to develop artificial intelligence to the point where the machine’s intellectual capability is functionally equal to a human’s.
We can see efforts in applications wishing to mimic humans. Yet we are not talking about mimicking the way humans think and do.
“Humans are not necessarily a superior species. It’s our ability to deal with complexity that is interesting and using tech to augment this, is useful. However we need to be very mindful to the decisions we make,” says our guest Karen Rivoire.
An algorithm is a list of rules to follow in order to solve a problem. Algorithms need to have their steps in the right order to work properly.
They also depend on the information input. If it is biased, the output will be biased too.
We have handed over decisions to algorithms we wouldn’t have let go off in the past.
As technology develops, our host Karen insisted there is still time to influence the development of the technology, but we need to get involved now. Our knowledge of communities, our proximity, our connections, are of key importance.
At the moment some organisations are using technology to research and solve issues in health, science, energy consumptions and more, such as Deep Mind (acquired by Google in 2014).
One of Deep Mind’s approaches is to use AI to deliver better care for conditions that affect millions of people worldwide.
Karen advocates using the P.A.I.R. methodology
and to encourage staff and stakeholders to immerse themselves into a life-long learning mindset.
Robbie Stamp, Chief Executive of Bioss International (working around judgment and decision making), gives an overview of the Bioss AI Protocol in this video.
Think about your Artificial Intelligence systems…
- Is the work they are doing Advisory? Does it inform your judgement? Is the decision eventually made by humans.
- Has the AI been granted Authority over any human being?
- Have you granted the AI Agency? Can it commit resources without human intervention? (Like in the Stock Exchange, or agency to machines to write code or repair their own code…)
- Application: are we clear when we abdicate responsibility to a machine… (eg a driverless car making decisions whilst you are doing something else and not paying attention to the core task as you’ve abdicated responsibility)
- Accountability: all humans have some sense of responsibility (albeit imperfect!) An AI cannot be accountable in the way humans currently are. Can it ever be?
Hoover on the names to open links
Inspirational Women (What would we do without them… )
Cathy O’Neil : Mathbabe.org Weapons of Math Destruction.
Catherine Helen O'Neil is an American mathematician and the author of the blog mathbabe.org and several books on data science, including Weapons of Math Destruction. Some AI stuff has been created without basic Math foundations nor statistical ground. Cathy challenges this.
Kate Crawford – ate Crawford is a leading researcher, academic and author who has spent the last decade studying the social implications of data systems, machine learning and artificial intelligence.
We programme codes with huge bias in. Kate challenges that.
Joanna Bryson Polymath psychologist and computer scientist. Associate Professor in the Department of Computing at the University of Bath, Joanna works on Artificial Intelligence, ethics and collaborative cognition. She asks: How to use tech to become even more human?
Tabitha Goldstaub Co Founder of CognitionX, a Market Intelligence Platform for All Things Artificial Intelligence enabling people and companies to educate themselves and get community led recommendations on how to deploy AI.
Martine Rothblatt The founder of Sirius XM satellite
radio, Martine Rothblatt now heads up a drug company that makes life-saving
medicines for rare diseases (including one drug that saved her own daughter’s
she is working to preserve the consciousness of the woman she loves in a
digital file … and a companion robot.
TechSheCan: a diverse range of organisations who believe that together we will make a much greater impact to address the root cause of the problem. (Video and video transcript)
AiforGood Artificial Intelligence for Global Sustainable Development
TeensinAI exists to increase diversity and inclusion in artificial intelligence
Exponential View newsletter: Azeem Azhar’s wondermissive on
technology, the future & society.
Tim o’Reilly: What’s the future and Why it’s up to us
Pete Trainor: An author, applied Artificial Intelligence designer, technologist, accidental polymath, mental health campaigner and co-founder of Us Ai. He talks all over the world on creative & social technologies, data, Ai and the physiological & psychological effects on their audiences.
Read Futureheads’ Be Kaler’s write up on the hype / trust issues around AI.
Read OECD’s white papers on the Future of Work, and the list breakdown of routine and non routine jobs that will stay or go in the near future.
Events to attend
· Internet Freedom Festival- Valencia, Spain- Yearly event every March.
· RightsCon Tunis 2019.
· Royal Society of Arts (RSA) and DeepMind on The role of Citizens in Developing Ethical AI
I recently ran a rapid prototyping session for senior women in social enterprises, who are contemplating moving from a functional lead or a senior changemaker position, to CEO level.
Did you know:
I decided to interview many CEOs in the social enterprise sector, then use storytelling, co-coaching, leadership growth tools, futures thinking, and an introduction to Design Sprints, to help participants understand themselves better (their success and failure patterns), contribute to move an organisation to the next stage, and become its leading face.
CEO: Chief Encouragement Officer | Chief Energizer + Optimizer | Chief Effective Organiser | Catalyst & Empowerment Officer, etc.
There is a title on one hand, and there is the effective leadership on the other, and this does not necessarily mean you can’t do anything below the CEO title. Even before being appointed to the function, your leadership capacity can be used to galvanise colleagues, manage up, incubate in-house programmes and launch them in the world afterwards.
The social enterprise sector is there to create movements, and sustainable pathways for entire communities, so how can your role be contributing to creating more impact, how can you be more involved in shaping sectors, movements, and influence.
As Sian, one of our participants, concluded:
“It’s not about how to become a CEO it’s about thinking how to use the position to create the change you want to see – If you start with that, it informs your approach to becoming a CEO”.
Your network is there to serve your purpose and empower you.
Start by mapping who your direct and indirect stakeholders are.
Ask them about their work, their methodology, their impact, and if they can be frank with you, what they think your strengths are and also what road blocks you might face along the way, because you:
1) might have a different understanding of what it takes to do the job or
2) you haven’t explored your comfort and discomfort zones in depth yet.
Remember: you haven’t shown the best of ALL your abilities yet in a particular setting; people only know you in particular circumstances, so don’t only focus on that odd 360 feedback comment…
Surrounding yourself by peers – in peer-to-peer mastermind classes for instance or co-production groups - is valuable because you hear them reflecting on their career trajectory. Use this not so much to benchmark yourself but to appreciate that life stories are never linear, and you might find someone who can exchange valuable insights, or reflect on your experience from a totally different angle.
“For time and the world do not stand still. Change is the law of life. And those who look only to the past or present are certain to miss the future.”
John F. Kennedy
This roadmap will look at 5 essential pillars, include what you have built to date and bring with you, and how you can either prepare in depth through additional courses or coaching, or through in-house practical learning experiments.
In each of the categories, think about what you feel you need to explore/ learn more about in the next days/weeks/months.
Each of these pillars should be attached to a particular outcome. Roll back the film and explore what needs to happen from the future, to now.
One participant went away with this thought: Use the quieter summer months to pick apart some of the bigger ‘broken’ processes which have a direct impact on the company strategy and put back together in a way that it helps the company expand and become more sustainable – It is also a way to test whether the leadership role is something I’m ready for or good at.
Do you really want to sign up for the whole package? For example, unless it rocks your boat, we sometimes underestimate the amount of work and time spent on governance. It’s time you don’t get back, even if you spend it to design and implement great structures and processes to move your organisation forward… Look at how much you love facilitating work or be client facing… assess how all this might change in your next mission.
How do you feel about inheriting a big mess? If you have the organisational capacity, the guts, the calm, and the energy to excel under pressure, look for underperforming businesses, a failing service or products, a board that is about to jump, a venture about to be put into administration.
62% of our research respondents told us they’d had only 1 month to make a decision/apply for the CEO position.
So even if you are only playing with the option, get ready now.
Our research among current CEOs showed that, prior to applying, some of our female colleagues had noticed the following:
What CEOs mentioned in the research:
If you are looking at reflecting for your next move from Functional Lead or Senior changemaker to CEO, contact me for individual sessions or a group experience with peers!Read more