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Social Entrepreneurship And Venture Capital

Submitted by safford99 on March 2, 2007

Category: Business
Words: 2524 | Pages: 11
Views: 263
Popularity Rank: 44,374
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Research Paper on Social Entrepreneurship and Venture Capital/Start-Up Funding

Nothing can be nobler than wanting to improve the conditions of the world both on an environmental and sociological level. Those individuals and businesses that choose to take on society's problems are a special breed and they face an uphill battle not only in performing their work, but finding the financial resources to grow the business so that it can fulfill its mission. This paper will examine the industry of social entrepreneurship and how venture capital funding is playing a role in improving life for all.

First, to define what a social entrepreneur is. According to one widely accepted definition, social entrepreneurs "adopt a mission to create and sustain social value, act boldly without being limited by the resources currently in hand" and "exhibit a heighten sense of accountabilityÂ…for the outcomes created."(Dee, Gregory). The majority of social enterprises are legally established as not-for-profit organizations, but a growing number have set themselves up as for-profit firms, with the owners agreeing that the business profits are to be reinvested in continuing the organization's social objectives.

Social enterprises face two ongoing hurdles towards achieving their mission, goals and objectives. The first is the nature of the business. Social firms are often referred to as "double bottom line" businesses, meaning they are designed to make a profit while fulfilling a social mission (Clark, Gaillard). This dual goal can be seen as paradoxical, which is often difficult for both employees and funders to come to terms with making it harder to motivate all parties towards achieving sustainable profits. The second hurdle is that the sources of funding for social businesses are more limited than the for-profit arena. Foundations and government grants have traditionally been the primary source of funding, but they provide mainly...

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