Tuesday, January 20, 2015

Storify Recap of VLAB January 2015: Transforming Entrepreneurship - Women Under 30 [PHOTOS]

VLAB January 2015: Transforming Entrepreneurship - Women Under 30It's incredible to think that this blog post on a fascinating VLAB event on crowdfunding in June 2012 was the first connection point with VLAB. Fast forward two-and-half years and it's been continually enriching to become immersed in disruptive technology, learn about emerging trends, and---especially for our work in exploring social innovation---better understand those points of nexus that connect the vast potential of entrepreneurship with impact.

Tonight's VLAB event featuring five accomplished entrepreneurs and skilled moderator was no exception. The theme of this evening was "Transforming Entrepreneurship: Women Under 30" and featured the Founders, Co-Founders, or CEO's of tech startups TRUSTe, Entefy, Revel, BitWall, Enplug, and Locket.

Here is a social media recap of the event that features posts about the panel, advice shared by the panelists, soundbytes, and reflections from attendees and organizers. Enjoy :)


Sunday, January 18, 2015

What Are 3 Crowdfunding Options for Social Entrepreneurs?


crowd
There is incredible power and potential in the crowd, especially for social entrepreneurs.

My experience in crowdfunding is proof, and has provided new perspective on options in the space, and pros and cons of various forms of crowdfunding.

Additionally, this past week, Jenny Kassan of Cutting Edge Capital presented a webinar on crowdfunding options for small businesses---her firm specializes in an emerging equity crowdfunding form called "direct public offering".

Here are a few broad highlights from Jenny's webinar, along with my own research and perspective.


What Are 3 Crowdfunding Options for Social Entrepreneurs?


1) Crowdfunding for donation (aka perks-based, donation-based crowdfunding)

Key Features:
  • Anyone can provide funding for a campaign
  • The contribution is a "donation", often rewarded with perks or benefits---but not equity
  • No financial return for contributors
Pros:
  • Easiest to set up (i.e. no legal requirements)
  • Anyone can contribute from anywhere
  • No limit to the number of funders or amount of funding requested
  • Direct appeal to customers, friends, and family for small to mid range amounts
  • Social entrepreneurs can deliver value through non-monetary perks (i.e. can find ways to create value for the funder, without prohibitive cost to the social enterprise)
  • Can build community, marketing, branding in addition to raising funds
  • Can serves as a way to test out an idea, concept, features, or pricing by getting customer feedback through interaction with the campaign, comments, orders, etc.
  • Can validate concept and attract other forms of funding (i.e. venture capital, impact investment, angel funding, friends & family, etc.)

Cons:
  • Though not often the case for social entrepreneurs, could create backlash for businesses (i.e. for-profit business asking for donations could raise eyebrows). For an interesting take and experience on that, see the TED Talk by Amanda Palmer (also embedded at the bottom of this post.)
  • Can be time-consuming and resource-intensive, especially for larger asks (requiring marketing budget, high touch points for those launching, and involvement on various social media platforms and engagement tools)
  • Is based on goodwill, so if the project changes significantly---it may mean reaching out to numerous stakeholders to inform (and potentially refund)
  • Some platforms require raising all requested funds, or none of the funds are released
  • The platform will take a percentage of the funding raised

Examples: Kickstarter, Indiegogo, StartSomeGood, Crowdrise


2) Crowdfunding by accredited investors under Rule 506(c), authorized by JOBS Act 2012.


Rule 506(c) was adopted by the Securities and Exchange Commission in 2014. It essentially allows businesses to raise unlimited funds but only by accredited investors. Under the federal definition, accredited investors are individuals who have a net worth of $1M (excluding their primary residences), or earn more than $200,000 as annual income (for past two years, and expected in current year) or $300,000 annual joint income for spouses. Entities can be accredited investors if they are valued at $5M or greater.

Key Features
  • Only accredited investors can invest in a company online
  • A financial return is expected
Pros
  • Can potentially raise an unlimited amount of funding from high net-worth individuals
  • Is a way to attract investors without commitment of traditional, larger initial investments
  • Is a newer form of investment, so may attract different kinds of accredited investors
  • Connects and incentives wealthy, and often well-connected, donors (i.e. accredited investors) to engage and help your social enterprise succeed
Cons
  • Limited to the pool of accredited investors (The SEC has estimated that 7.4% of US households qualified as passing the threshold for being "accredited investors" (an estimated 8.7M households in 2010)--- this leaves out over 90% of households across the US alone
  • Newer form of investment, so accredited investors are less familiar (and potentially less comfortable) with this option
  • Requires an attorney and legal formalities


Examples: CircleUp, Wefunder, Launcht


Important Note: The other provision of the JOBS Act that would allow equity investments by non-accredited investors (which we have written about here and here), has not come into effect. The SEC has not yet adopted specific rules around this type of equity crowdfunding investment. Attorney Joe Wallin has an excellent blog post on this titled "Crowdfunding v. Rule 506(c) Offerings"



3) Direct Public Offering (aka investment-crowdfunding, crowdfinance) 

Key Features:
  • Can offer investment opportunity to anyone
  • Non-accredited investors can participate
  • Financial return is expected

Pros
  • Any type of organization or company (nonprofit or for-profit) can invest for equity
  • Direct investment (no middleman)
  • Can offer any kind of investment (i.e. equity, debt, revenue-based investment contracts, pre-sales, for perks)
  • Is a new form of investment crowdfunding-- social enterprises can be 'first to market' in raising funds for your cause/in your market
  • Can replace an angel round or Series A round (i.e. past DPO's have raised upwards of $500K, $1.2M, even $2M)
  • Can build broader community, marketing, and branding while fundraising
  • Can engage in multiple rounds (i.e. is like a 'faucet', can be turned on and off)

Cons
  • Newer form---fewer people know/are familiar
  • Requires state registrations (which could mean more paperwork if raising funds across states) and legal formalities
  • Can take 4-8 weeks for paperwork and legal compliance before launching DPO
  • Founders may need to manage relationships with numerous investors
  • Resource intensive and may require professional marketing and media services


Example: CuttingEdgeX


Read More




Saturday, January 17, 2015

CA's Flexible Purpose Corporation Renamed to Social Purpose Corporation

fresh carrot juiceBrand new name, same great taste.

That's right, three years after "flexible purpose corporations" rolled out in California, they officially have a new moniker. Effective this month, FPC's are now "social purpose corporations" ("SPC's").

As you may recall, two bills were passed in 2011 creating for-profit legal entities in California that also aimed to create positive impact. One was the benefit corporation legislation, and the other was the flexible purpose corporation.

FPC's were passed as part of legislation called the "Corporate Flexibility Act." That bill was amended and approved by Governor Jerry Brown in October 2014, and became effect at the start of the new year.


How many FPC's incorporated in California?


According to the language in the amendment, 62 FPC's have been formed since the new legal form became effective on January 1, 2012.

Ways "Social Purpose Corporations" in California differ from previously called "Flexible Purpose Corporations"


  • New name. The name has been changed. In some ways the updated name may make the focus on impact more clear, both to companies considering the name change as well as their potential customers and funders.
  • Directors are now required to take company mission into account in decision-making. In its previous form, a company's directors were permitted to take a company's 'special purpose' or mission into consideration. In the amended language directors of a SPC are "required to consider and exercise discretion to further the corporation's special "social purpose.""
  • Provides dissenters' rights to SPC shareholders converting to another form or in the case of merger with a non-SPC.
  • Makes it easier for out-of-state companies to reincorporate as an SPC in California.

Were the changes opposed?


As legislation often has opposition, this amendment did too. It was opposed by the California Association of Nonprofits and former member of working group that proposed the original FPC legislation, opposed the new name. 


CA SPC's and DE PBC's look like siblings, with CA Benefit Corps a close cousin


With all of the changes, and widespread passage of benefit corporation legislation across the country (i.e. as of January 2015, 27 jurisdictions have passed a form of benefit corporation) it bears mention to note that each state passes its own bill. I.e. benefit corporations or social purpose corporations aren't "franchised" to look and sound exactly the same as in other states. The provisions depend a great deal on the state's business and economic landscape and interest in social impact.

That being said, it is interesting that Delaware public benefit corporations (benefit corporation legislation was passed in 2013) is actually more similar to California social purpose corporations than to California benefit corporations. The California benefit corporation has a higher bar for social impact measurement and reporting, among other differences, and more closely resembles the benefit corporation model legislation.


Read More

Sunday, January 11, 2015

Social Enterprise in South Korea: 5 Facts

Social entrepreneurship is developing and evolving in unique ways around the globe. In Asia, South Korea has both government


1. South Korea is the only country in East Asia to legally define a "social enterprise."

It was passed as part of the 2006 Social Enterprise Promotion Act (SEPA), and went into effect in 2007. The government defines a social enterprise as "a company or organization which performs business activities while putting priority on the pursuit of social purposes."

A company or organization must go these 7 steps before being certified as a social enterprise in Korea. 

According to an this article published in the Social Enterprise Journal in 2011, SEPA was in part influenced by British law and social cooperative law passed in Italy in 1991. 

A social enterprise in Korea can be a non-profit or for-profit organization.



Seoul by night
photo by @koshyk


2. In 2011, the Korean government introduced a plan to support social enterprises through preferred contracts, expanded funding channels, and exclusive business management programs specifically for social enterprises.


3. South Korea hosted multiple conferences on social enterprise in 2014 including the 8th Annual Social Enterprise World Forum (Oct 2014), the 3rd International Conference on Social Enterprise in Asia (Jul 2014).

SEWF brought together 600-800 thought leaders, academics, and practitioners around the theme "Social Change through Social Enterprise."

The Conference on Social Enterprise in Asia in July also integrated conferences including the The Eastern ICSEM Symposium took place in Wonju (South Korea) and the Social Enterprise Leaders Forum (SELF) 2014 bringing together over 600 participants including academics, social entrepreneurs, and government officials.

Seoul will host the 12th annual SAGE World Cup finals for high school social entrepreneurs in August 2015.


4. As of November 2014, there are 1,165 certified social enterprises in South Korea. The government aims to promote more than 3,000 certified social enterprises by 2017. (cited from Rappler).
This is especially significant considering the country's strong economic position as the 15th largest global economy, according the World Bank.


5. Seoul Mayor, Won-Soon Park, has taken an active role in facilitating social entrepreneurship in the city of 10M.

Mayor Park introduced was Cheong-Chek – or the Listening Policy-- and founded the Hope Institute for collaboration and action.



Read More



Saturday, January 10, 2015

It's 2015. A Year to Innovate, Ask, and Create.

Dear Innov8Social Readers,

Happy 2015! It is exciting to look up at the potential and possibility of the new year.

In reflecting on 2014---it was one rich with experience and growth.

What's Ahead for the Blog


As the new year starts I am excited to jump back into writing with renewed energy. I look forward to inviting new guest bloggers to submit articles, for posting shorter posts-- 'bloglets' if you will :). I also look forward to doing more audio interviews, and finding a few efficiencies in the process!

Book Update and What's Ahead


card mailing project
sending out thank you cards!
The social innovation book project was an incredible opportunity to deepen learning---about not only social innovation but indie publishing too. And it was very special to garner support from a broad range of contributors. As the project progressed, we began to realize it would make sense to find new paths and independent articulations---that could do justice to our diverse experiences and visions in this space. The work continues ahead!

The Art of Asking


I had a chance to listen to the audiobook version of The Art of Asking by Amanda Palmer--an artist, musician, and TED speaker. To be honest, I hadn't heard her band Dresden Dolls nor had I watched her TED talk. But, in listening to her tell her story, I was struck by her unambiguous message told with honesty, vulnerability, and humor---Ask. often, honestly, and authentically.

You can watch her TED talk here:



I don't know if this makes total sense, but asking for your help in our joint book project has made me more of a book author than having actually published the book without it. Though the book remains to be realized, the intent has been deeply seeded and that desire is so clear that it has made the path much clearer too.

I leave you with a quote from a favorite book that has been illuminating over the past few months---

And when the shadow fades and is no more, the light that lingers becomes a shadow to another light.
And thus your freedom when it loses its fetters becomes itself the fetter of a greater freedom.
- Khalil Gibran, The Prophet

Always,
Neetal



Wednesday, May 28, 2014

Video Interviews with Social Entrepreneurs at Santa Clara University Magis 2014 - Celebrating Social Entrepreneurship

As detailed in the Photo Essay of Santa Clara University's Magis 2014 Showcase for Social Entrepreneurship, the event brought together hundreds of social entrepreneurs, thought leaders, practitioners, and academic thinkers for an evening of exploration, reflection, and recognition.

One of the most impactful features of the event was the networking time before the speeches and evening meal. Flanking the auditorium were tables headed by social entrepreneurs, many of whom were GSBI graduates and current participants. 

Here are video interviews with two of the participants. You will learn a little more about the kinds of social enterprises GSBI has incubated, what the program has meant to them, and about the why, what, and how that guides their work in the impact space.


Artisan Connect at SCU Magis 2014


Interview with Vrnda Dalal, Supply Chain and Artisan Partnership Manager at Artisan Connect., Artisan Connect is an online marketplace for quality home goods made by artisans in developing countries. It was founded by GSBI mentor Amanda North.






Global Women's Water Initiative at SCU Magis 2014


Gemma Bulos, Director of Global Women's Water Initiative , a nonprofit and GSBI alumnus, explains the organization's work in training and building a movement of local women water experts to address water issues, that affect them the most. GWWI focuses on Uganda, Kenya and Tanzania and has trained over 200 women to build over 30 rainwater harvesting systems, that provide over 300K liters of clean water to their communities. 




Tuesday, May 27, 2014

Photo Essay: Santa Clara University Hosts Magis 2014 - Celebrating Global Social Entrepreneurship

SCU Magis  2014On a beautiful Sunday evening in mid May 2014, hundreds of social entrepreneurs, mentors, funders, leaders, professors, and faculty members gathered for a gala to honor two individuals in the social enterprise space as well as to further the global dialogue about mission-driven ventures.

The inaugural dinner named Magis---the Latin term for "more" (i.e. as in more strategic, or better) highlighted the work of the Center for Science, Technology, and Society (CSTS) and its long-running Global Social Benefit Institute which has over 200 alumni social enterprises that have positively impacted nearly 100 million lives since the program launched over a decade ago. It also recognized and honored the work of Graham Macmillan, former Sr. Director of VisionSpring ( social enterprise dedicated to ensuring the distribution of affordable eyewear) and Sally Osberg, President and CEO of the Skoll Foundation (one of the institutions that support GSBI).

Santa Clara University is no newcomer to social enterprise. As learned through an Innov8Social audio interview the Center of Science, Technology, and Society Director Thane Kreiner----the Global Social Benefit Institute (GSBI) has a rich history in the space, and Thane's own experience as a serial entrepreneur in the health sciences arena informs and inspires his work at CSTS. The department also hosts an annual GSBI Accelerator Showcase, which features pitches from current participants. (Coverage of the 2013 GSBI Showcase here.)

Though the Magis showcase & dinner evening was seated in elegance and dressed to the nines, one of its most glimmering accessories was the humility of its participants. From Master of Ceremonies Thane, to featured speakers, and award recipients, to the esteemed guests, there was an honesty and authenticity in engaging in value-driven work, understanding the reason behind the work, and the long and often challenging road in launching ventures that seek to improve lives in addition to employing an entrepreneurial mindset. In this space, just as with any niche, there can be a tendency to gild individual contributions or the sector itself, or brush past known challenges and failures. But the tone of Magis, perhaps due to its firm roots in the Jesuit tradition or because the presence of so many active social entrepreneurs in the evening's program, was one of engaging in dialogue, of furthering conversations, and of finding ways to help each other better understand and support the space.

Photo Essay: Santa Clara University Hosts MAGIS -- Celebrating Global Social Entrepreneurship


Sunday, May 18, 2014


SCU Magis 2014
A pre-event slideshow featured various GSBI and social enterprise projects and initiatives.

Saturday, April 12, 2014

Photo Essay: Social Enterprise Law Symposium 2014 at University of California Berkeley, School of Law

The first Berkeley "Social Enterprise Law Symposium" took place in the first week of April 2014. The Boalt Social Enterprise Group (a student organization of UC Berkeley School of Law) and the Impact Law Forum hosted the insightful event to take a closer look at financing & exits for social enterprises. The event comprised of two panel discussions and surveyed the finance and legal structures for social enterprises from startup stages to scale-- focusing more on scalable social enterprises backed by foundation or grant funding.

Scroll down below for links to watch videos of the sessions.

From the perspective of covering social enterprise law in various posts on Innov8Social about the introduction and passage of benefit corporation legislation in California and beyond; hybrid corporate forms including L3C, CA flexible purpose corporation, and others; the merit of tandem structures (i.e. for-profit + nonprofit combinations); potential of crowdfunding for equity; and impact financing possibilities and constraints----the panel talks validated some overall trends that have been emerging and brought to light interesting nuances by active legal practitioners in the space, social entrepreneurs, funders, returns-focused venture capital, and policy experts.

Below is a photo essay from the talk, along with a few notes about notable quotes and points raised. You can also read literature handed out at the Symposium on the Impact Law Forum website.

Attorney Gene Takagi also posted about about the session in his blog post, "Financing Social Enterprises: From Start-up Through Exit".

Social Enterprise Law Symposium

The panel talks afforded legal practitioners continuing legal education credit and brought together a diverse group of individuals engaged or curious about the social enterprise space.


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