A recent report from Social Enterprise UK: No Going Back: The State of Social Enterprise Report 2021 highlighted that 55% of people from racialised communities feel discouraged from applying for social investment and 44% of disabled founders expect their applications to be rejected.
The event was an opportunity for diverse founders to ask questions, share insights and hear more about the tools, resources and funding available. Our panel of investors included representatives from CAF Venturesome, Charity Bank, Social Investment Business and The Ubele Initiative who discussed the work they are doing to make social investment more equitable and the support available for diverse-led organisations.
In case you missed it, you can catch the full session on demand! Here’s just a few of the key takeaways from the event.
There is no one-size-fits-all when it comes to tackling the barriers to social investment
‘We can’t lump Black and racialised minority communities into one pot’ says Hanif Alli, Chief Officer of BASE. “We need to look at each community separately and see what their barriers are. Yes there’s commonality - a huge percentage of organisations from racialised communities aren’t aware of social investment, but actually the barriers are quite diverse. Some communities feel comfortable with the idea of taking on debt, while for others this is something they would never consider.”
‘There are a number of challenges’, says Philip Udeh, Director of The Ubele Initiative. ‘Barriers are often around mindset; Leaders may not understand how they can deploy loan capital in a way that can make their organisations more resilient and create new streams of income. They equate loans to risk and can shy away from something they consider to be risky.’
‘Social investors are looking for a way to say yes, not a reason to say no’
Fear of rejection can discourage organisations from applying for investment. “‘Computer says no’ is a big set-back.” explains Hanna Latif, Partnership Manager at Social Investment Business, who recommends reaching out to funders and organisations directly if you are worried about your application being rejected. “Relationship managers can give advice on how to strengthen your application. They’re on the other end of the phone (or Zoom!) and ready to offer support”.
It’s about more than just the money
This is very much aligned with the lessons social investees have shared with us in the past; social investors care about the impact your organisation is making, they want to see you succeed and will often offer help and support if things don’t quite go to plan.
Anoushka Amin, Investment Executive at CAF Venturesome agrees. “Our lending relationships are like partnerships; we act as a critical friend to investees and will be upfront in the beginning if we don’t feel an investment will get approval and where necessary provide investment-readiness support. We’re also not going to come and take the TV off the wall if things go wrong! You know your organisation and the people you help better than any investor, so don’t be intimidated.”
Our panel was unanimous - reaching out to social investors is the way to go. “Getting feedback is really important” says John Murray, Senior Lending Manger at Charity Bank who suggests making contact with investors at an early stage.
If you want to learn more about funds, investors and advisors who operate across the UK, take a look at the Good Finance Investor Directory. Additional support for diverse founders is available in the Addressing Imbalance hub.
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