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Virgin social angel investors help seven ventures to £1m+
I’m so excited to see such a high level of interest from new investors who can see opportunities to back creative, high growth business models that address social issues such as youth unemployment or the prevention of re-offending.
Jo Hill, Director of Ventures, UnLtd
Barely half a year since its winners were announced, the Big Venture Challenge, a programme working with 25 of the most ambitious social entrepreneurs across England, has revealed that seven of the elite cohort have between them secured £1.1m.
A commitment of £420,000 from the Big Lottery Fund has been used to attract £680,000 of external investment – or in investment jargon, a ‘leverage’ of 162%.
Just shy of three quarters of this investment has come from eight so-called ‘angel’ investors who have made their first ever investment in social ventures.
Some 66 per cent of the investment is in the form of equity, and 34 per cent is loan finance. Loans totalling £130,000 have been provided by social investor Big Issue Invest, and a further £50,000 by CAF Venturesome.
UnLtd, the Foundation for Social Entrepreneurs, which is running the programme with support from the Big Lottery Fund, said this week that the nature of these deals was in stark contrast with the experience of UnLtd’s investment readiness work over the previous two years, which saw just 8 per cent of money raised as equity, with 54 per cent as loan and 38 per cent as grant – and no deals involving angel investors.
Jo Hill, Director of Ventures at UnLtd, said: ‘The Big Venture Challenge programme is designed to plug the gap in early-stage, high-risk capital and stimulate the social investment market. The programme has enabled conversations to happen between social entrepreneurs and investors, giving them the chance to dip their toes in the social investment sector for the first time.
‘In addition to these deals, we have had a further £500,000 of co-investment lined-up from investors, pending match funding. There seems to be a real momentum building across the social venture sector. I’m so excited to see such a high level of interest from new investors who can see opportunities to back creative, high growth business models that address social issues such as youth unemployment or the prevention of re-offending.’
Dharmendra Kanani, England Director at the Big Lottery Fund, said: ‘This is People Powered Change at its best, enabling people in communities to unlock solutions to social problems. The Big Venture Challenge provides a platform for spotting and backing people with solutions to social problems but also importantly creates a blend of a private sector analysis of the bottom line with social return and benefit.
‘These are social entrepreneurs who have a shared ambition to deliver impact at scale whether that is working with disengaged youth, supporting vulnerable families, providing employment, reducing re-offending or enabling disabled people to have more choice. We are proud to be backing social entrepreneurs who have the courage, resilience and commitment to respond to need and social issues, but also those making a difference by scaling up impact to make a measurable difference to thousands of people in the community.’
The seven confirmed co-investment deals are:
- Spacehive is an online platform that puts communities in control of neighbourhood planning by tapping private sector investment for capital projects like playgrounds and community centres – helping to offset public spending cuts. Match funding leveraged in £200,000 of equity investment from two angel investors and a small private equity firm.
- Reds 10 addresses long-term unemployment through supporting Local Authorities, Developers and Contractors in meeting local labour and apprenticeship targets on construction projects. Match funding leveraged in £150,000 of equity investment from one angel investor.
- Squease produces award-winning therapeutic garments that help individuals with autism to self-manage their anxiety. Match funding leveraged in £100,000 of equity investment from three angel investors.
- The SWEET Project provides early intervention support to families at risk to prevent social problems from escalating. Match funding leveraged in £80,000 of loan investment from Big Issue Invest.
- Patient Choice is a prescription home delivery service for ostomy products that provides impartial product information empowering individual patients to make their own choices about their care. Match funding leveraged in £50,000 of loan investment from one angel investor.
- Blue Sky Development & Regeneration is establishing a prison industry in a women’s prison to stimulate employment through manufacturing goods for a fashion brand. Match funding leveraged in £50,000 of loan investment from Big Issue Invest.
- Beyond Youth CIC is launching an ambitious social franchising model to scale their Chance 2 Change programme, which uses therapeutic interventions to tackle the root causes of offending. Match funding leveraged in £50,000 of loan investment from CAF Venturesome.
One of the successful Big Venture Challenge Award Winners, Tom Storey of Reds 10, said: ‘The Big Venture Challenge award and the obvious attraction of the match funding really accelerated the whole process for us and our investor. Being a part of the programme has opened doors for us, given us credibility and focused our minds on delivering a coherent growth plan. We see this as the beginning of the next stage of our journey as we look to rapidly scale the social impact of our work – creating employment opportunities for young disadvantaged people up and down the country.’
All of the 25 ventures are receiving hands-on one-to-one support from the team at UnLtd, regular ‘bootcamps’ as a cohort plus mentoring, pro-bono legal support, financial modelling and marketing and PR support.
Based on the success of this programme in stimulating the seed investment market, UnLtd is looking to raise further match funding to support ambitious social entrepreneurs in regional and themed cohorts, to deliver impact at scale in health, education, employment, youth and social inclusion.