Financing Social Innovation (TEPSIE), SIX TelePresence December 2013

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Financing Social Innovation (TEPSIE), SIX TelePresence December 2013

  1. 1. Telepresence: (The future of) Generating capital flows for social innovation Gunnar Glänzel Georg Mildenberger
  2. 2. Overview • Introduction o o Capital flows: Income and investment Mismatch of needs and requirements between innovators and investors • Research results • Future scenarios • Recommendations 11/12/2013 2 TEPSIE is a research project under EU’s 7th framework programme
  3. 3. The empirical base Denmark: 7 interviews 13 survey respondents Germany: 15 interviews 152 survey respondents UK: 10 interviews 116 survey respondents Poland: 9 interviews 18 survey respondents Portugal: 10 interviews 72 survey respondents 11/12/2013 Greece: 8 interviews 73 survey respondents 3 TEPSIE is a research project under EU’s 7th framework programme
  4. 4. Results: Financing instruments • Investment readiness: Percentage of social innovators stating to be capable of (re)paying... 45 40 35 30 25 20 15 10 5 0 …up to 4% interest: 9.7% …up to 2% interest: 7.1% …but no interest: 25.3% 19.5% …no investment 11/12/2013 Maximum interest: up to 12% up to 10% up to 8% …up to 8%, 10%, 12% interest: 1% of respondents each …up to 6% interest: 5.2% …social investment 4 …commercial investment TEPSIE is a research project under the EU’s 7th framework programme up to 6% up to 4% up to 2% No interest No repayment
  5. 5. Results: Financing instruments • Financing instruments deemed as (un)suitable for financing growth; percentages of respondents assessing a certain instrument as... 100 Secured debt Investor equity Mezzanine …unsuitable 80 Interest-free loan …rather unsuitable Grants/donations (from businesses) 26 …suitable 60 …very suitable 40 20 32 29 17 0 11/12/2013 5 18 11 63 19 19 12 12 5 5 16 12 14 17 12 TEPSIE is a research project under EU’s 7th framework programme 1 2
  6. 6. Analysis: Core innovator and investor needs • Innovator needs: o o o Low cost of capital Autonomy Non-financial support • Investor needs: o o o 11/12/2013 Low transaction costs Impact measurement Adequate risk and return ratio 6 TEPSIE is a research project under EU’s 7th framework programme
  7. 7. OUTLOOK: Scenarios • Independent variables o o Organisational manifestation: In how far there are (more) investmentready organisations? Institutionalization: In how far are framework conditions supportive? • Dependent variable: Capital flows for social innovation 11/12/2013 7 TEPSIE is a research project under EU’s 7th framework programme
  8. 8. 11/12/2013 8 TEPSIE is a research project under EU’s 7th framework programme
  9. 9. Recommendations • Markets and government support for social innovation needed to improve precarious income models • Investment practices and requirements to be adapted for financing social innovation • Need for more cooperation between types of actors to lower capital costs, reduce risks and provide non-financial support 11/12/2013 9 TEPSIE is a research project under EU’s 7th framework programme
  10. 10. Thank you very much! Please take a look at http://www.tepsie.eu/index.php/publications for the full report! 11/12/2013 10 TEPSIE is a research project under EU’s 7th framework programme

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