When I started C@rma, my objective was to find something meaningful to invest my skills but also something that will enable to earn a salary. I had (and still have) big dreams to develop C@rma, geographically or by product but this requires money and attracting also good people to support me on the road. There are two choices: either live from fund raising, donation or grant or generate money organically. I guess I was (and I am still not) not very familiar with the first option so I went for the second one..Let’s try to generate money to make the business run and hence not be dependent from external sources. So yes, I am generating profit but the objective is the reinvestment of it in C@rma to make it grow.
I did not know I was a “social entrepreneur”...am I really social? Anja Koening, who launched the Social Investment Program with Sabanci University, opened my eyes. Listen to what she considers as a social impact.
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And at the end, I took that road because it is also a nice way to meet likewise people confronted with the same reality of, for example, finding investments. We are not pure technology companies with an easy business model generating return on investment in 3years; impact (in my case raising awareness about pro bono in Turkey) takes time, requires patience and hence profit will be generated much later….and then...since all the profit is reinvested in the company, tja, it is difficult to sell that to “cash flow eater” investors.
But more and more investors understand their responsibility in supporting companies interested in generating cash to invest in impact. Listen to what Ferhan Cook, from M-Spark (in Turkish) has to say about it.
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So far, there are some success stories of social investors. In Turkey, we have B-Fit, Tarimsal Pazarlama, Gelecek Daha Net, etc. Most of the time, once they have had the patience to wait for results, some organizations will support them to leverage these successes and expand their scope. One of them is Ashoka. Listen to what Matthias Scheffelmeier, from Ashoka is saying.
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But for real investors, exit will stay an issue. They are not paid to stay on their investments for 10 years..at some stage, they want to sell back their share (if possible at a higher price) to reinvest in other companies. What I learn from Nikolaus Heutter was that, at this stage, there hasn’t been really documented exist from social business but there are ways..for example, by the founder taking the engagement to purchase back his shares, etc. Listen to what Nikolaus Hutter, from Toniic LLC, a leading global impact investor network is saying about social impact.
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At the end, for me, every person/company can be a social entrepreneur; Google, democratizing access to information, a bank enabling individuals to develop projects has an impact but the main question is: what is the intentionality? why is the company created? For money or to solve a social issue and in the meanwhile make money?
When you are pitching for investment, you are normally receiving this template with all the points to address: the team, the technology, the P&L, etc….I hope that in the near future, all pitches will have also to include one slide about the social impact the company is bringing. The investors will not invest in it only because of the impact but it will be one of the factors they will be taking into consideration when investing together with team and profit generation...lets see!
And don’t forget to register on C@rma..because it is one of the main metrics required by clients and investors so help me to raise it!