Trends in Seed-Stage Social Enterprises
Cheryl Dorsey

Cheryl Dorsey President, Echoing Green

Min Pease

Min Pease Impact Investing Manager, Echoing Green

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May 21, 2014

Trends in Seed-Stage Social Enterprises

Cheryl Dorsey

Cheryl Dorsey President, Echoing Green

Min Pease

Min Pease Impact Investing Manager, Echoing Green

Tags for this post
May 21, 2014

This post was co-authored by Min Pease, Impact Investing Manager at Echoing Green.

In 2007, we selected Felix Brandon-Lloyd as an Echoing Green Fellow. Felix’s organization, Skill-Life, was a game-based platform to help young adults overcome personal debt and little financial know-how. Felix is reflective of all of our Fellows—passionate, innovative, resilient, and a leader. As one of the pioneers in seed stage social funding, since 1987 we’ve disbursed USD 33 million in funding and strategic assistance to nearly 600 emerging leaders around the world through our highly competitive Fellowship Program.

Felix was also at the forefront of a tide of Fellowship applications that proposed using for-profit business models to address the world’s most pressing problems. Skill-Life was acquired in 2010, and Felix recently co-founded another company, Zoobean, a Pandora for children’s apps and books, that has received venture financing from Kapor Capital, Mark Cuban, and others.

Though Echoing Green has always been agnostic about a Fellow organization’s legal structure, for most of our history Fellowship applicants proposed addressing social issues via nonprofit business models. A trend analysis performed by Harvard Business School found that in 2006, 15 percent of our applications proposed programs with a for-profit or hybrid legal structure. This year, for-profits and hybrids (those with for- and nonprofit elements) composed almost half of all applications.

Since our founding by the leadership of the global growth equity firm, General Atlantic, we have been privileged to be part of a global movement of social innovation. Today, we are excited to share some of our recent learnings from our 2014 pool of for-profit and hybrid applications. We look forward to contributing more of our data and knowledge as our impact investing initiative continues to grow.

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Key takeaways from the snapshot include:

  • Applications with elements of for-profit business models continue to increase and now compose almost half of all proposed programs. In 2006, only 15 percent of applications did so.
  • 2014 hybrid applications are both younger, in terms of years of existence prior to application, and at an earlier organizational stage than for-profits.
  • For-profit applications increasingly focus on serving the general population while hybrids increasingly cite the economically disadvantaged as their target constituency.
  • On average, for-profit applications report raising the most funds since launch across all organization types.

For more on overall 2014 Fellowship application trends, read this blog post and view our Finalists. Learn more about Echoing Green’s impact investing work by checking out the initiative’s webpage or email Impact Investing Manager Min Pease, at Min@echoinggreen.org.

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