We’re an unusual Social Enterprise. The traditional SE - such as a shop, advice centre, café or small manufacturer - is relatively low tech. They can start with minimal cash and develop progressively from there, reinvesting their earnings. Most build up assets, buildings or vehicles for instance that create financial security.
But we needed expensive software, with negligible resale value, before being able to help anyone. That technology needs to be continuously developed as we learn lessons from its use. Our service requires critical mass (market liquidity) quickly, which needs a lot of outreach. We can’t start with a few users and wait for it to grow organically.
In short, this is a Social Enterprise that needs £millions before it generates enough earnings to sustain itself. Some of that has come from government. Beyond that, no responsible grant-making body would fund an early stage technology venture, even one with 12 year’s development behind it. Launching Slivers-of-Time Working across the UK requires Silicon Valley style risk capital.
We have been fortunate in finding investors who share our vision of a Social Purpose Business. We unlock the economic value of “wasted hours” when individuals would like to work but currently can’t do so. Long terms that funds itself through a charge to employers. We haven't yet reached the long term.
What structure?
It’s widely recognized that Slivers-of-Time Ltd. (wholly owned by Tower Hamlets based Guaranteed Markets Ltd.) is at the forefront of Social Enterprise development in the UK.
In May 2007, UnLtd convented a panel to discuss the best legal structure for Slivers-of-Time Ltd. How do we enshrine our commitment to our social aims? We’ve already committed ourselves to creating a universal marketplace that can best serve the people who need it most. A more short term, profit orientated, company would probably just focus on easy to reach students and aim for a trade sale to a multinational agency in a few years. That's not us. We're here to bring opportunity to everyone who needs it. How does that get funded?
New Start Magazine 14th Sept. 2007
The panel at UnLtd included strategists from Ethical Banking, Charities and Social Investing. Should we be established as a Community Interest Company? Or, maybe, create a “golden share” given to a trust to safeguard our social purpose? Limit our possible actions in the Articles of the company?
The verdict: any steps like this would cramp our ability to attract capital in the future. Our investors demand that we operate within the disciplines of a normal commercial company. They expect payback for the benefit of future enterprises with the capacity for social good who will also go through a cash-hungry phase.
We offer investors a “blended return”: social good and capital appreciation. Social purpose is at the core of what we do, we are not an operational company with a philanthropic commitment bolted on. But we have to secure investment in a competitive marketplace.
For deeper insight into the problems of getting Social Innovations funded it’s worth reading the NESTA/Young Foundation report: In and Out of Synch, the challenge of growing social innovations.
Paul Barry-Walsh, highly successful technology entrepreneur and founder of the charity Frederick’s Foundation which gives development funds to inner city entrepreneurs.
UnLtd., the fund for Social Entrepreneurs.