1. Borrowing (debt)
Taking out a loan which you agree to repay over a set period of time. Most debt investments are paid back with interest - a fee you pay to the investor for the use of their money.
E.g. an investor loans your organisation £10,000 and you repay a total of £11,000 at £229 per month over 4 years.
2. Shares (equity)
Selling shares in your organisation to an investor. Equity investors receive a share of any profits paid out by the organisation and get to have a say in how the organisation is run.
E.g. an investor pays £10,000 to own 10% of your organisation.
Donations from lots of people who support what your organisation is doing, given in exchange for ‘rewards’ which can range from a thank you on your website, to merchandise such as branded bags and t-shirts, to the actual product you are raising money to develop.
Money that your organisation has in the bank as a result of making profits or generating surpluses.
Conventional finance – including high street banks – offers many of the same products available from social investors with the key difference being that the investors do not have a social motivation to their investment. Mainstream banks may also offer you an overdraft facility – an agreed amount of loan finance that is available to manage your cash flow when you need it.
Financial support from people you know or who support you personally. For example, three friends/family members loan you £10,000 between them to get your organisation up and running.
Early-stage investment and support – including training and office space – for business ideas that have the potential to scale. Many social accelerators and incubators are focused on ‘Tech for Good’ businesses seeking to use digital technology to make a positive social impact.
Money paid to you to carry out a specific project (restricted grant) or to generally support your organisation’s work (unrestricted grant).