Good Capital: A little return, a lot of good

Life as a social venture start-up like CommuniTeach can be tricky, particularly when you’re contemplating your need for capital while in a non-profit/L3C/for-profit identity crisis. On the non-profit side, traditional grants and foundations don’t exactly jive with your social entrepreneurship sensibilities and desire for unique models of revenue generation and financial sustainability. But the idea of going  to a venture capital fund, or anyone really, and easily articulate that yes, you see their point about high returns, but no you don’t think maximizing your profits is the most important thing compared to the social return on investment is…rather painful to contemplate as well. Perhaps you will get incredibly lucky and snag and Echoing Green or Ashoka fellowship and use that support and prestige as a launching pad for your organization…but until then, you sometimes feel rather stuck.

Luckily, a few innovative venture capital style vehicles are trying to step up and fill that space of providing capital to social ventures that provide a substantial social return on investment while at least considering the financial return or revenue generation aspect as well. One such organization that I recently came across is Good Capital.   According to their website,  “Good Capital is an investment firm that increases the flow of capital to innovative ventures creating market-based solutions to inequality and poverty. Using a high engagement model, we invest in the most promising social enterprises and give them the tools and guidance they need to succeed.”

Sounds good, yes? What’s even more interesting is that Good Capital is apparently open to funding both non- and for-profit entities. For non-profits, it appears they offer some sort of low interest venture debt and additional non-financial support, while in the case of for-profit entities offer venture capital with the expectation of less then market rate returns but extremely high social impact. They also charge a management fee, which at least partly supports the additional advisors and consulting support Good Capital provides to the ventures they fund.

Good Capital, and other funds like it, will play a critical role as the social enterprise space continues to mature. By providing social enterprises with access to the critical capital and support structures they need to scale up their initatives without compromising their social mission, these new funds are ensuring that social entrepreneurship will continue to flourish and grow in the coming years.