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What If A Private Investor Wants To Get Involved In Setting Up A Social Firm?

These enquiries are currently not very common as:

- most social enterprises have growth rates that are not attractive to private investors as they compare badly with private sector for-profit businesses;

- most social enterprises can access start-up grants from government and Trusts as long as they are non-profit distributing organisations. This gives social enterprises a competitive advantage as they do not have to repay this investment;

- some grant funds are better than others, and many have drawbacks related to admin or outputs that mean the business is compromising on its business focus. In some cases a social enterprise would be better rejecting the grant route and getting a private investor on board to create a well supported, very focused and dynamic business;

- we donít yet have a network of high net worth individuals interested in investing in Social Firms, but this is something Social Firm UK is working on. We believe that there is a potential pool of investors that will be content with low or modest return on investment as long as the business is producing worthwhile social outputs. This is supported by the experience of our colleagues in Social Ventures Australia;

- a combination of grants and private investment is probably the best way to go for Social Firms. The new Community Interest Company legal model which was introduced in 2005 now makes this possible.  A CIC Social Firm structure allows a certain level of private investment and a capped rate of return, but is also an acceptable company structure for most grant giving bodies. Social Firms UK is monitoring its level of take up in the Social Firm sector with interest.

What If A Private Investor Wants To Get Involved In Setting Up A Social Firm?

Back to What Is A Social Firm?

>What Is A Social Firm?

>What Is The Difference Between Social Firms And Social Enterprises?

>What Is The History Of The Social Firm Movement?

>What Are The Main Issues Facing Social Firms At The Moment?

>How Do I Set Up A Social Firm? Is There Any Guidance On The Structure, Finance And How It Should Be Run?

>I Have An Idea For a Social Firm. How Can I Tell If It Will Work?

>Is There An Accreditation System To Show You Are A Social Firm?

>What Types Of Training And Business Support Are Available To Social Firms?

>How Can We Externalise Our Project From The Local Authority? Are There Any Examples Of When This Has Been Done Successfully?

>I Run A Social Firm. Can You Recommend An Insurance Company Sympathetic To Social Firms?

>Is There A List Of Consultants Who Have Expertise In Social Firms?

>Where Can I Find A List Of Social Firms In My Region?

>How Can I Find A Job In A Social Firm?

>What Work Options Are There For A Disabled Person Following A Long Period Of Unemployment?

>Where Can I Find Information About Benefits Allowances And General Benefits Advice?

>Are There Organisations Equivalent To Social Firms UK In Other Countries?

>I Am Coming To The UK And Am Interested In Comparing Social Firms Here To Those In My Country. Is It Possible To Visit Any Social Firms?

>What Are The Issues About Having Trustees With Learning Difficulties?

>What Is A CIC (Community Interest Company)?

>What Is A Social Entrepreneur?

>Why Should I Join Social Firms UK?

>How Do Social Firms Sit Within The Spectrum Of Employment Provision For Disabled People?

>What Are The Likely Other Sources Of Finance For Social Firms?

>Why Was The Definition Of A Social Firm Broadened To The 'Severely Disadvantaged' In 2006

>What Is A Social Enterprise And What Types Are There?

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