Equity finance for social enterprises

This chapter outlines the opportunities and challenges involved in social enterprises accessing a broad range of equity financing options in the US public market, from the IPO markets, mini-IPO offerings under Regulation A and crowdfunding, to private equity opportunities through traditional venture firms, philanthropic capital and dedicated impact funds. In assessing this variety of financing options, it builds a framework social entrepreneurs can use to match their business models and aspirations for impact with appropriate and aligned financing mechanisms. Key considerations include rightsizing for scale, accessing critical non-financial resources and aligning the preferences of investors and the social enterprise with respect to investment time horizon and impact legacy. Demonstrating how US social entrepreneurs can use this framework to evaluate equity financing choices offers a roadmap for future work extending the approach to other geographies and financing options.