This document discusses different sources of financing for social enterprises, including traditional sources like personal savings, loans, equity, and grants. It also covers "social enterprise specials" like community shares, social impact bonds, and loan stock. While grants can help with validation and development, they have downsides like restrictions, cash flow issues, and reporting requirements. The document emphasizes that financing alone cannot ensure an enterprise's success and provides additional resources for information.

1. Financing social enterprise guest lecture to MMU students Nov 2011 www.adrianashton.co.uk

2. What type of cash do you need? Adrian Ashton

3. What do you need the cash for? Dealing with failure ( 'rebooting' the business ) fashion/credibility Validation ( reassuring yourself ) Set-up Development Working capital Adrian Ashton

4. Factors influencing choice of money Cash-flow Time-scale Length of time money needed for Likely results of activity/project Attitude to risk Available security ‘ Peer pressure’ Contribution to mission and long-term sustainability Impact on reputation and ability to ‘lever in’ further money Adrian Ashton

5. Know what Investors want Their money back ( loans, equity ) Financial Return ( loans, equity ) Social Return ( grants, loans, equity ) Outputs & Outcomes ( grants ) Security ( loans ) Partners ( grants, loans ) Exit Strategy ( equity ) Adrian Ashton

6. Traditional sources of cash Personal savings Family and friends 'sweat equity' Debt (bank loans, overdraft) Equity (dragons and angels) Factoring Retained profits Grants Adrian Ashton

7. 'social enterprise specials' CDFI Community shares Social impact bonds Loan stock 'In-kind' crowd-funding Adrian Ashton

8. Some problems with grants... Lead time Restrictions on use Cash-flow implications Admin time/cost in monitoring & reporting Risk of 'claw back' Risk to credibility Adrian Ashton

9. GOOD MONEY WILL NOT MAKE A BAD ENTERPRISE GOOD Adrian Ashton

10. Further sources info & reading Unlocking the potential – a guide to finance Social Enterprise UK http://www.ncvo-vol.org.uk/sfp Simply Finance Co-operativesUK Adrian Ashton