Unlocking finance for social tech start-ups: Is there a new opportunity space?

Abstract

This paper performs a critical analysis of the financial instruments that can be employed to fund social innovation,\ud with a specific focus on social tech start-ups that develop and deploy technology-driven solutions to\ud address social needs in a financially sustainable manner. The paper analyses how these start-ups can access\ud financing, the barriers to financing that these organisations experience and the financial instruments that are\ud most suitable to address their financial needs. Social tech start-ups have many points of overlap with high-tech\ud start-ups in terms of the barriers they encounter to financing in different lifecycle stages. Still, the institutional\ud solutions that are commonly exploited by high-tech start-ups for growth are not enough to support social tech\ud start-ups to scale. Therefore, we introduce the concept of SII and discuss its potential contribution to the social\ud tech finance landscape. Then, using the case of social tech start-ups as paradigmatic of the broader problem of\ud financing mechanisms for social innovation, we formulate a research agenda, including directions for research\ud and theoretical development in the field of SII

Entrepreneurship Education in a Multidisciplinary Environment: Evidence from an Entrepreneurship Programme Held in Turin

“…In other words, it could be interesting to understand whether, why and how students interact with the entrepreneurial ecosystem and what the obstacles and opportunities of their collaboration are within the entrepreneurial ecosystem. Lastly, since social start-ups are considered capable of providing innovative responses to social and environmental problems (EC European Commission 2011) and they are increasing (Arena et al 2018), it is important to create ad hoc entrepreneurship programmes on social entrepreneurship (Viglialoro and Landoni 2019). Future studies could therefore analyse the differences between social entrepreneurship programmes and entrepreneurship programmes by not focusing on social entrepreneurship in terms of teaching models and the impact of these two programmes on students' entrepreneurial skills and EI through the administration of pre-and post-surveys to the participants.…”

Impact Investing Strategy: Managing Conflicts between Impact Investor and Investee Social Enterprise

“…During impact investing, the investee social enterprise is the major instrument through which social and financial returns are generated. The present scholarship on impact investing is nascent, focusing on the concept [10] or typologies [11]. Despite growing investments in impact investing, scholars have not explored the real operational factors and strategies within impact investing that explain the working of impact investing firms.…”

The relationship between small and medium-sized social enterprises and banks

“…The strength of these relationships provides banks with important and structured soft information, and the inclusion of intangibles results in a fundamental strategy. The intrinsic objective of SMSEs to create social value ensures "mission lock", providing comfort to social entrepreneurs and allowing the consideration of social intangibles as collateral (Arena et al, 2018).…”

“…This paper focuses on the credit access problem for small-and medium-sized social enterprises (SMSEs), analysing their complex relationships with different types of banks. This topic has attracted growing attention in recent years, with several authors calling for SMSEs to diversify their funding streams in order to survive in cyclical environments and be able to scale (Nicholls and Paton, 2009;Grimm et al, 2013;Salim and Ellingstad, 2016;Arena et al, 2018).…”

“…They generally have a low level of structuration, which is reflected in the lack of formal organizational arrangements and unsophisticated accounting and control systems (which is easily explained by the scarcity of financial resources) (Bull, 2007;Costa et al, 2011;Bengo et al, 2016). This problem is amplified by the lack of collateral and the intangibility of assets that strengthen a (perceived) negative correlation between firm size and the probability of insolvency (Udell, 2004;Scellato, 2007;Arena et al, 2018). Furthermore, banks are typically less aware of the characteristics of social business organizations in terms of their business model, organizational structure and governance (Fraser, 2007;Chertok et al, 2008).…”