Foundation for Social Entrepreneurs collaborates with major Corporate Accelerator in the development of social enterprises
One of the winners of a £10mn Cabinet Office initiative to support the next generation of social ventures, UnLtd, which has had considerable experience through its Big Venture Challenge of incubating such ventures, is collaborating with Telefonica, which has the most experience of Accelerators of any corporate in the world, to work together to start up and grow new businesses to meet social needs.
This is a six-month programme – of intensive development, plus a two-month extension period post ‘Demo Day’, starting in May, for tech start-ups that meet social needs, a programme which will be repeated three times over two years – under the Cabinet Office’s recent bid and contract.
Telefonica will almost double the space in its London Wayra Lab and then the ten selected social incubator teams will have the same regime and similar terms as in the programme of their corporate counterparts on the floor above (see http://wp.me/p3beJt-s). They receive £40k in the form of a ‘convertible note – structured as a loan’, team-working accommodation in the specially designed co-working space, and close project management and mentoring support – in return for 5-15% equity in their businesses.
According to UnLtd, the biggest challenges in this early stage work with social ventures are:
* finding participants whose enterprises seem based on
scaleable models and have adequate routes to market to
make significant contributions to social needs (the call has
used existing channels; and the selection process is using an
application form to reduce the applicants to about 30, and
is followed by a single interview before a small panel);
* finding investors to provide the next round of funding at
the end of the incubation period.
UnLtd’s experience with its Big Ventures Challenge has been largely confined to funding and support (no co-location/co-working); and technology ventures only made up a minority of those supported – with many small, often very local enterprises working intensively on the ground with relatively small numbers of beneficiaries. In the pilot year, just over half of the ventures supported raised external investment but it is still too early to speculate if they will go on to scale significantly or to tackle major social needs.
The interests of investors in not-for-profit social ventures are more tightly defined than those of their commercial counterparts: there are fewer of them; and up until recently most could not benefit from the existing tax breaks. However UnLtd is discovering increasing numbers of commercial enterprises, including one or two in the Wayra programmes, that can claim to be meeting social needs, enterprises that might therefore well come under the umbrella of this scheme.
Support – in the form of process management, learning and mentoring will no doubt be a result of the collaboration between the two: the Wayra UnLtd Academy will provide the hothouse; Telefonica will provide technology expertise. The latter is also able to provide potential access to the large number of their global customers, whilst UnLtd claims to have the largest pipeline of social entrepreneurs in the UK, as well as expertise in monitoring the social impact delivered.
As a six-month programme, in a purpose-designed Accelerator, if it can find entrepreneurs with ambition and with ground-breaking ideas, this programme could mark the way forward for Accelerators.