Social Entrepreneurs Fall Behind Impact Investors

When Aron Jakab started Fruit of Care a few years ago, he was a great designer but had no experience business management, marketing research, or finance. Even though his social enterprise was viable, his business was too young for impact investors, reports Triple Pundit.

Fruit of Care instead tapped into an organization named NESsT, which, along with the Business in Development Network is one of the few organizations offering intensive business development assistance to very early stage social entrepreneurs. Thanks to this support, Fruit of Care is now profitable, employing more people, expanding to neighboring countries, and already paying back its first loan which NESsT provided as very patient capital.

While interest in the concept of social investment is growing by leaps and bounds, it seemed from SOCAP that there is some danger of the cart coming before the horse. The burgeoning ranks of associations of social investors such as Investor’s Circle and the Global Impact Investors Network show that demand for good social investment opportunities exists and effective networks to aggregate that demand are keeping pace. Additionally, many of those present at SOCAP represent investors who are sitting on the sidelines, but listening to proselytizers of the field as they spread the word to foundations, family offices, and governments that they should take a look at the opportunities in the space.

Lee Davis, co-Founder of NESsT, believes the space urgently needs more players willing to invest in the early stage development of social enterprises, even if it isn’t as profitable. “We need to develop a stronger pipeline of investment-ready social enterprises or the very impact investors we’re bringing to the table will walk away disappointed and they won’t return,” says Davis, adding “some proponents of impact investing are promising the moon.”

Screenshot from Fruit of Care

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