Get funding for your social enterprise through an experimental approach


Décio Emanuel


Here’s the truth: the business model you have now is not the business model you will have in a year’s time. The product or service you offer now, will not be the same in a year’s time. And it shouldn’t be. You should view a business as an embodiment of your vision. You should also view it as a ground for experimentation. So, detach your ego from the original idea and be open to experiment.

To all the new social entrepreneurs aiming to put their idea forward, funding always seems to be a struggle. To the seasoned social entrepreneurs, this seems to be their focus too. They tend to blame a lack of funding for the lack of success or inability to take-off. And I’m sure you’ve heard previous accounts for this; after all, you’re in an environment where most people tend to use this as an excuse: ‘We’re trying to do a lot of good here, but we can’t get funding. They just don’t understand our work!’

Partially, I don’t blame them for this negativity. In a report published by the Failure Institute on Causes of Failure in Mexican Social Enterprises[1], two factors in particular that most stand out as causes for failure among social entrepreneurs are:

  1. Lack of resources and infrastructure – defined by ‘the lack of support funds for social entrepreneurs, as well as ignorance as to how to get funded, and the lack of skills to integrate projects to obtain social funds.’
  2. Context – where ‘social entrepreneurship is highly influenced and shaped by the environment.’ This environment is often attributed to the government, blaming the policies in place that do not allow for social enterprise to flourish. Financial support from government can be difficult to obtain and processed slowly.

If you choose to stick with these factors and turn them into excuses, so be it. But by becoming 100 per cent accountable for the success and failure of your social enterprise venture, you will see your enterprise differently. Instead of blaming the government or lack of support funds, we must be self-reflective and self-analytical.

To increase their probability of funding from impact investors, a social enterprise needs to provide evidence of that success and social impact. That’s simple, right? Well, not if you haven’t been around for long, don’t have a measurement strategy in place, or your beneficiary is not clearly defined. To address this, there is a simple answer: you must create a time-bound project with a specific objective.

This could be a small pilot or short-term project. If you prefer, you can view it as a minimum viable product. Give yourself time to plan it – be diligent in your research. You must define and refine the business model and the social impact model. Ensure to establish: the product or service, the customer, the beneficiary, the required financials, what you absolutely need and no more. Do not waste your time in projecting the future.

And more importantly: set yourself an exact period, for example three months, and approach the implementation with an experimental mindset.

It is now your sole objective to focus on this one project with this specific objective, with this specific time limit. Deposit all of your energy in it and harness as much evidence as you can. Take organised notes, and collect thorough data. Gather beneficiary testimonials and customer feedback. Be willing to adjust your model as you go. At the end of the three months, you will have enough evidence to support the hypothesis that your business model either works or doesn’t.

You compile this into a report. You now have a case study. If your conclusion is that this business model works and was successful, given the time frame, then be ready to present it to start-up funders. If it doesn’t, rinse and repeat.

Décio Emanuel is a Young Talent Programme Delegate at SEWF 2018


  1. ^ Lopez-de-Alba, Pedro & Berbena, María & Carranza, María & Armando López Lemus, Jorge & Ramos Estrada, Cecilia, (2017), Causes of failure in Mexican social enterprises

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *