In this special International Women's Day spotlight piece, we hear from Eloïse Day (Founder and Chief Creative, Effervescent) who shares her reflections about taking on social investment. 

“It is a truth universally acknowledged, that a social investor in possession of a fortune, must be in want of a compelling investment opportunity.” – Jane Austen.  

Effervescent makes authentic and creative campaigns by collaborating with children and young people on behalf of ethical brands. We didn’t start off that way, though. Back in 2004, my principal motivation as a Founder was to find ways for children and teenagers who had endured extreme, traumatic adversity to tell their stories in a way people in power could really - really – understand, empathise, and commit to doing something meaningful to help.  

At first, we worked through theatre, dance, and multimedia live audience experiences. We made work about being scared of making the wrong choices, the pressure to be a kid, the experience of psychosis, and the grief of a broken heart. The work was incredible, and the emotional impact was impressive, but audiences were limited because theatre is fleeting; we’d spend three weeks making a show that a few thousand people saw. It didn’t feel like enough. 

So, we re-imagined our practice as an advertising practice.  What if we could partner with ethical agencies, child-focused brands and Nonprofits to co-produce campaigns that could reach the entire country? We developed some test work. We had a product proof: a reliable, replicable method for creating communications which positively impacted society, supported social justice and sustainability, and improved the wellbeing, happiness and future life chances for the young people working on the campaigns. 

But it was almost impossible to get to a viable business model on sporadic grant funding, public donations, and partner contributions.  We tried convincing our main funder to give us a chunk of grant investment to scale, but they had no other business models like this in their portfolio, so they said they couldn’t do it.  But they did point us in the direction of Nesta and Resonance, who became our social investors (find out more about Nesta, Resonance and many other social investors via the Good Finance directory).  

The 18 months of writing that business plan, testing it for robustness and market fit, working with the investors on the legal and financial groundwork to draw down the funds was tough.  It took much longer than we or they expected, and it came on top of the usual work running the business, leading the creative work with young people, and looking for new opportunities. 

Timing taking on new staff was difficult, and we tried to do everything at once which meant everyone needed onboarding at the same time whilst I kept all our projects and programmes running in the background.  At times I was like a harried octopus trying to do everything and trying to make everything work.  But we drew down the money in December 2019.  So, what do I wish I had known then, that I know now? 

The good stuff 

1. Social investors want you to succeed

They’re investing in you and your organisation because they believe in the product, they believe in the team, and they believe in your impact. They also know a lot and have their eyeballs on a whole handful of other social enterprises, so they have a lot of market intelligence about where the opportunities are. 

Ours – Nesta and Resonance – were incredibly helpful and supportive when the pandemic lockdown occurred, and we love working with them. Try to get the most from them and their knowledge and connections; talk to them regularly because they will help you succeed. 

2. Don’t be scared

Because I was terrified. When the Nesta team first told me they would like to invest in Effervescent I collapsed in a crying-shaking-laughing mess on the floor (luckily it was a phone call so they didn’t see that.) As I’ve said in other blog posts about this, asking for investment can be very intimidating, especially if it’s an entirely new thing for you, but investors want their capital to make a difference as well as getting a financial return. Be impressive, but also be vulnerable if you can, and be completely honest about what you’re doing because they will advise and support you before investment to be in the best position to make good use of that money. 

3. Business models can change after investment 

Wildly. So, write a great business plan, thoroughly research it, get investment in it; and then be prepared to rip it up.  No business plan stays static and no matter how much you love your beautiful plan, the world changes. We had to completely rethink our Minimum Viable Product and how we deliver it twice in the last three years, as the world has changed so much for young people and charities.  

Another section of our plan was based on being building-based, and Covid made that impossible.  We’ve recently created more ‘off the shelf’ products at the lower end of our funnel because otherwise we’re asking clients to make a huge commitment very early in the relationship. Accept what’s not working, adapt, and use that to build yourself to be more resilient and sustainable. 

The difficult stuff

4. I wish I’d known there was going to be a global recession and chaos caused by the pandemic (but didn’t we all!) 

All but one of our warm pipeline of customers stopped doing anything but the absolutely most urgent stuff and it became impossible to progress contracts for around 18 months. When they returned, so many staffing changes had happened that we had to start entirely from scratch, and most organisations were re-writing and re-re-writing their strategies in response to a chaotic environment for children and young people, changes to what young people needed, and increased financial vulnerability for most NGOs and charities. 

5. Product and business proof are relatively easy, and it’s important to be super objective

This is tough when you’ve founded something based on passion and belief, rather than opportunity to make a surplus.  Market proof is difficult: markets change all the time, and you may already have close to market saturation even though it looks like there’s a big opportunity out there. Just because you love it doesn’t automatically mean your customers will. 

6. Not all grant funders understand social investment

One of our key funders who contributed around 30-35% of our income mix pre-social investment, have declined to fund us after our social investment. Our balance sheets show the social investment money that needs to be repaid as a loss, and they have considered this to be a risk. We didn’t anticipate this on our investment journey, and in hindsight, we might have made different choices on how to structure the finance. 

Our understanding is that this situation is unusual, and there are more and more grant funders now who are expanding their services to offer social investment as well. But there are still some who view loan finance and social investment as a risk; not all grant funders have moved on from the old-school model that you receive a grant, spend the grant, then ask for another grant. This is an important conversation to have with your existing funders if you think this may be a possibility. 

So there’s my balanced and truthful round up of what I wish I had been able to foresee about our social investment journey four years ago. It’s been a fun, harrowing, beautiful, hideous journey – which in my experience is much of a muchness in leading a charity or social enterprise. Ultimately, I’m glad we took on this investment. It’s opened a gateway for us to develop partnerships with incredible global and national brands, NGOs, governments and universities. We’ve made some very beautiful, very significant work with children and young people which has reached millions of adult and young audiences; and created significant change in individual behaviours and beliefs, government processes, commercial product sustainability, and charity policies and services. 

Our young people and their parents tell us working with Effervescent is life-changing and it’s been wonderful to see our young co producers growing up and gracefully sliding into apprenticeships with the BBC; jobs in marketing and advertising where people like them are underrepresented; and glamorous education opportunities all over the world thanks to the confidence, skills and self-belief we were able to help them unlock with this investment.

Part of my role at Effervescent is to create the space for sustainable creative communications and insight work with children and young people to become ever more visible, achievable, and a normalised way of working. If you’d like to know more about our investment journey or just to get some peer to peer support – because leading an organisation is tough work – please reach out to me.