Позитивные изменения. Том 2, № 3 (2022). Positive changes. Volume 2, Issue 3 (2022) - Редакция журнала «Позитивные изменения»

its introduction to impact projects with pro bono support. And only a year later it proceeds with loans (interest-bearing or interest-free). In this case, pro bono is often even more useful for social entrepreneurs than the direct financing tools, or loans.

According to the expert, often applicants to the Impact Investors Club come from the positions of a philanthropy project, rather than that of a social entrepreneur. Projects like these often have no business model and no view of the future. Which means an experienced investor would not fund such an application. After all, a social entrepreneur must have a calculated financial model, and an objective of solving a specific social problem. Besides, applicants often fail to consider the impact investors’ motives, which also means they do not receive funding.

“In the current situation, it is not the amount of funding in the market that changed, but the social entrepreneurs’ willingness and desire to seek funding, which they have to repay later. Remember: when we take a loan, we borrow somebody else’s money for some time, and when we repay it, we part with our own money for good. A loan is all about responsibility. Of course, we will ask for reports, we will look at how the project goes, because we often commit not just our money, but also our expertise, connections, and contacts. The money in this market has not run out. Some impact investors have indeed left, but others are coming in: people who had been involved in venture capital investments and have grown interested in the social component,” says Olga Ryabova.

Applying to the Club is not the only way to declare yourself as an impact project. As noted above, many impact investors use different tools. Some hold special “speed dating” days, when the founder of any project can sign up for a one-on-one meeting with an impact investor. A typical pitch session does not exceed 15 minutes. Pro bono support options are also available.

IMPACT INVESTORS’ EXPECTATIONS

The difference between impact investors and ordinary investors is greater faith in the project, experts say. What criteria must a social entrepreneur’s project meet in order to be supported?

For an impact investor, as clichéd as it may sound, it is important to hear how the founder talks about the project, to see his/her expression and feel his/her energy. The investor would also want to see the project team, because there is strength in numbers. The team does not have to be composed entirely of professionals, but they must be committed to their project, and not eager to leave tomorrow. Next, it is important to understand why you are doing this particular project. Is anyone else solving this social problem? The worst advice is to say that you are the only ones dealing with the problem.

“I would advise that you have a dialogue with yourself before coming to an impact investor. If you are sure you are the only one, why are you alone? More often than not, it turns out that there are others. Maybe in other locations, maybe using other methods. It is a good indicator for us: if you do not know the market, then how do you enter it? And the market, among other things, consists of those who solve the problem,” Olga Ryabova explains.

Another indicator is the words you use in your speech. For example, you go and say, “our competitors in this market…,” “we have no partners, only competitors.” The impact investor prefers to hear the words like “our partners,” “such and such companies work with us,” “we do it together.”

Another important point is to understand the geography and scope of your intended growth. If you are going to stay in a particular spot, that is also a good answer, the main thing is that you should be honest and make yourself understood by the investor.

It’s also worth thinking through the question of what happens once you do get the money from the impact investor. What kind of leap, what kind of change will there be? Also what happens if you don’t get that money?

“The more we speak the same language, without eluding answers, the more likely you are to get money. The more we, as impact investors, are aligned with you in the logic of your project and its development, the more we will believe in you. If we talk about tools, I would focus on trust and honesty,” says Olga Ryabova.

When an impact investor decides to dismiss a project, they are usually prepared to explain why. Such a dialogue allows the project to take another look at itself and understand what to do to move forward.

WHAT THE STATE DOES

In recent years, the government has been looking very actively towards social entrepreneurship. A federal law has been passed that enshrines the concepts of “social entrepreneurship” and “social enterprise.” Therefore, social entrepreneurs should pay attention to the wide range of opportunities offered at the federal and regional levels. Experts also pay attention to the subjects of the Russian Federation. They offer tax benefits, free rent for decent locations, information and advertising support, attendance at exhibitions, support from the SME Corporation and Rosmolodezh. You can also contact the Social Innovation Center in your area.

“Clearly, there is still work to be done in the legislation. Currently it does not cover socially-oriented NGOs, which in fact are also part of social entrepreneurship. I think changing the law is a matter of the nearest future. At least colleagues in our sector are actively pushing this issue,” says Impact Hub Moscow Program Director Valeria Zavgorodniaia.

The most important thing for a social entrepreneur is to understand what kind of support he/she needs. The state has plenty of mechanisms and tools.

“According to our survey, very few people are looking in that direction. They don’t rely on anyone giving them anything. They try to develop their own internal resources. But I think external support is really worth taking advantage