The UK has a vibrant impact and social investment market. Yet beneath the headlines of record levels of investment in UK tech and social businesses, social tech ventures continue to tell us that access to appropriate finance is the biggest obstacle to their plans for sustainability and growth.
To understand more about the barriers they face, and what new approaches they would like to see, we convened a series of roundtable discussions with social tech ventures from across the UK.
Our research identified several challenges that ventures experience when engaging different investor groups, including misalignment with the dominant VC model, investor aversion to impact-focused business models, and investor hesitancy about tech propositions.
The participants expressed a clear desire to see more innovative investment models and instruments being used that have a closer alignment with their financial and impact objectives.
Several key areas were highlighted where the ventures saw opportunities to take a different approach, including exploring models that focus on sustainability as well as growth; developing more revenue-based approaches; and addressing the need for patient and flexible finance.
Ed Evans, CEO of Social Tech Trust says, “social tech ventures have consistently evidenced their commercial acumen and the positive impact of their work on society. This report validates what we have known for years – social tech ventures are being negatively impacted by mis-aligned funding models. Going forward, we’ll continue to focus on addressing the investment gap so that ventures can access the capital they need to build a better society.”
Read the full report. For more information about our investment approach, read our blog ‘Fair play: why sustainable impact needs a more flexible approach to investment’.
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