In this guest post, Big Venture Challenge lead David Bartram explains why he thinks language is the biggest obstacle when it comes to getting social investment.
Social investment is growing. The amount of investment offered by social investors, with the explicit primary intention of generating social returns, is currently sized at just over £200m, while 89% of Social Investment Finance Intermediaries (SIFI’s) recently announced they expected to increase their investments into social businesses over the next two to three years. Access to capital should therefore be abundant. With politicians heralding social investment as the solution to increasing funding constraints, it is no wonder a growing number of social entrepreneurs are pursuing investment as a viable solution. So why are so few able to access this capital?
For me, the obstacle that must be overcome before any other is the language barrier that exists between social investors and the entrepreneurs attempting to access the capital. The world of social investment is flooded with acronyms, jargon and confusing language – making things needlessly difficult for social entrepreneurs new to the space. If we want social investment to be accessible to social ventures we need to find a way for social entrepreneurs and investors to better communicate.
Many social entrepreneurs we work with as part of UnLtd’s Big Venture Challenge at first struggle with the simpler questions around investment; ‘how much’, ‘what for’, ‘where from’? However, too often there is an expectation that these entrepreneurs should come with all the knowledge and understanding required to communicate with many social investors.
The ability of social ventures to access early stage social capital is not just down to communication – but tackling the language barrier would be an immediate step forward. There are examples in the market where this is done well, such as with Key Fund’s work to bridge this gap through the use of simple terminology and language, while Esmee Fairburn have created a Social Investment Jargon Buster – but is there more that social investors and the market can do?
Following the advice of the Alternative Commission on Social Investment to provide greater transparency in the market would be a good first step. We should be working together to help entrepreneurs navigate the social investment market, create greater clarity around the language that is used, and provide entrepreneurs with simple guidance and advice on accessing the capital available.