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SSIR & RPA Symposium 1Hybrid Social Enterprises
Hybrid Social EnterprisesHybrid Social Enterprises
Charly Kleissner, [email protected]
Co-Founder, KL Felicitas Foundation
May 16th, 2006
SSIR & RPA Symposium 2Hybrid Social Enterprises
Hybrid Business Model Hybrid Business Model
For-Profit Entity
Hybrid Social Enterprise
Not-For-Profit Entity
In-Kind EquityConsulting
BrandIntellectual Property
R&D
R&DConsulting
Profit SharingLiquidity Events
SSIR & RPA Symposium 3Hybrid Social Enterprises
Hybrid Business Model Hybrid Business Model
For-Profit Entity
Hybrid Social Enterprise: Governance
Not-For-Profit Entity
For-Profit BOD Not-For-Profit BOD
SSIR & RPA Symposium 4Hybrid Social Enterprises
Hybrid Business ModelHybrid Business Model
Why?Why? To attract different types of capital / investorsTo attract different types of capital / investors To partially subsidize services / products To partially subsidize services / products To invest in basic researchTo invest in basic research To prepare immature markets To prepare immature markets To leverage both legal structures, while not being To leverage both legal structures, while not being
boxed into only oneboxed into only one
SSIR & RPA Symposium 5Hybrid Social Enterprises
Case Study: Biomass Electrification Case Study: Biomass Electrification in Rural Sri Lankain Rural Sri Lanka
SSIR & RPA Symposium 6Hybrid Social Enterprises
Case Study: Biomass Electrification Case Study: Biomass Electrification in Rural Sri Lankain Rural Sri Lanka
SSIR & RPA Symposium 7Hybrid Social Enterprises
Case Study: Biomass ElectrificationCase Study: Biomass Electrification
Flowing Currents Ltd. Aspira
In-Kind EquityConsulting
Profit SharingLiquidity Events
Biomass:• Project Management• Project Planning• Installation• Training• Maintenance
Village Societies:• Organizational Development• TrainingReforestation Program:• Training • ManagementPartial subsidy of tariffs
SSIR & RPA Symposium 8Hybrid Social Enterprises
Hybrid Investment StrategiesHybrid Investment Strategies
Invest-mentRisk
Enterprise Life Cycle
High
Low
Seed Start-Up Early Expansion Late Expansion
Grants Social Loans
GrantsSocial Loans
Commercial Loans GrantsSocial Loans
Commercial LoansGovernment Loans
Equity Commercial LoansGovernment Loans
Equity
• Social Investors• Foundations
• Social Investors• Foundations• Social Venture Funds• Banks
• Social Investors• Foundations• Social Venture Funds• Banks• Governments• Corporations
• Banks• Governments• Corporations• Etc.
SSIR & RPA Symposium 9Hybrid Social Enterprises
Hybrid Investment StrategiesHybrid Investment Strategies
Not-For-Profit Entity
Investors
Entities For-Profit Entity
Hybrid Social Enterprise
Foundations: * Social Loans (PRI)Social Venture Funds: * Social Loans
Social Investors: * GrantsFoundations: * Grants
Banks: * Commercial Loans * EquitySocial Investors: * EquityFoundations: * Mission Related Equity
SSIR & RPA Symposium 10Hybrid Social Enterprises
Case Study: Biomass ElectrificationCase Study: Biomass Electrification
Aspira
Investors
Entities Flowing Currents
Hybrid Social Enterprise
Social Investors: GrantsFoundations: Grants
Local Bank: Commercial LoanSocial Investors: EquityAspira: In-kind equitySocial Venture Fund: Social Loan
SSIR & RPA Symposium 11Hybrid Social Enterprises
ConclusionConclusion
Define mission of social enterprise, Define mission of social enterprise, thenthen implement best legal implement best legal structure to support the mission, not the other way around. structure to support the mission, not the other way around.
Hybrid structure is appropriate if youHybrid structure is appropriate if you Need to/want to attract different types of capital/investorsNeed to/want to attract different types of capital/investors Need to/want to partially subsidize services / productsNeed to/want to partially subsidize services / products Prepare immature marketsPrepare immature markets Invest in basic researchInvest in basic research
Examples: Flowing Currents, World Of Good, IDE-I, CBI, etc. Examples: Flowing Currents, World Of Good, IDE-I, CBI, etc. Watch out for Watch out for
Governance and leadership issuesGovernance and leadership issues Clear value proposition for different types of investorsClear value proposition for different types of investors
Need to work on business model templates Need to work on business model templates
SSIR & RPA Symposium 12Hybrid Social Enterprises
Hybrid Social EnterprisesHybrid Social Enterprises
Charly Kleissner, [email protected]
Co-Founder, KL Felicitas Foundation
May 16th, 2006