Comments on: Will “social capital” be the next big industry to emerge?

By: edhardy622

edhardy622 — Tue, 13 Oct 2009 13:35:13 +0000

British law student sues Abercrombie-Fitch for disability discrimination.
http://www.abercrombieshop.us

By: Openworld

Openworld — Wed, 29 Apr 2009 20:40:25 +0000

Challenge offers from digital philanthropies -- such as microscholarships for new learning options, and microjobs to build track records in online markets -- can spur creation of social capital at the base of pyramid . See Seeds of Change at http://www.openworld.com and strategies for human capital formation at www.entrepreneurialschools.com .

Best,
Mark Frazier
@openworld (twitter)

By: ventureblogalist

ventureblogalist — Tue, 21 Apr 2009 19:59:03 +0000

Great article Chris. I hope you are doing well. I think there are more models to be explored here to get higher IRRs for traditional VCs and to effectively link pension funds, endowments to foundations.

By: Sean

Sean — Tue, 18 Nov 2008 03:01:30 +0000

Interested in Socially Responsible Investing? Check out this Facebook group dedicated to it;

http://www.facebook.com/inbox/readmessage.php?t...

By: Sean

Sean — Tue, 18 Nov 2008 02:42:14 +0000

Great Article! The only point that i would contend with is the idea that these Social and Environmentally Responsible Venture Capital opportunities will inherently generate a subpar ROI. There is no reason that these innovative companies cannot meet or exceed market returns. We can have our cake and eat it too. I am a part of a team that is proving this point; www.funkventures.com.

By: Michael Cayley

Michael Cayley — Tue, 04 Nov 2008 00:30:55 +0000

Here is my take on SoCap08 and the integration of social capital at the heart of capitalism.

It is due to the emergence of social media networks.

http://socialcapitalvalueadd.com/2008/10/20/soc...

By: Link per il 31 Ottobre :: Yawn

Link per il 31 Ottobre :: Yawn — Sat, 01 Nov 2008 09:12:02 +0000

[...] Will “social capital” be the next big industry to emerge? – [...]

By: Social Influence Valuation : Chief Social Officer ™

Social Influence Valuation : Chief Social Officer ™ — Sat, 01 Nov 2008 01:19:17 +0000

[...] An earlier post on online social capital and influence touched on managing it as an asset, and certainly there is an increasing awareness of the value of online social capital in business and personal life. (This is not to be confused with traditional social capital, an emerging industry) [...]

By: mdangear

mdangear — Fri, 31 Oct 2008 21:21:16 +0000

Grunche:
As Muhammad Yunus mentions in his book "Creating a world without poverty", and I believe he is right, Capitalism a half developped structure because it assumes that people are one dimensional beings only concerned about maximizing profit for themselves. And the theory behind free markets is that the best way you can contribute to society and to the world is by doing just that, getting the most for yourself.
However it is not working, and this is probably what we are seeing the current crisis in Wall Street, because of this "conceptual failure" as he calls it, because people are not one-dimensional beings, they have many other interests beyond maximizing profit, and they have many other needs. So Capitalism is the way to go, but it needs to evolve.

Chris:
Going back to Blended Capital as discussed in the post, there is one big issue that has not been resolved yet is what is it exactly? While everybody understand at a high level the concept, or what some other people call double or triple bottom line, it is very hard from the investor prospective to figure out what you can expect from it. You know you will get less return, but how much and how do you figure out good deals and bad deals? There is an issue of estimation and measurement of success that still needs to be resolved.

One way to deal with this is what we are doing with Entrepreneur Commons (www.entrepreneurcommons.org), using debt instead of equity. Because equity creates tension between the investor and the entrepreneur, for example by forcing the issue of exit: the investor needs his money back at some point, but who do you sell too, and should you really? (the Ben& Jerry things)
With debt, everything becomes a lot easier: you know exactly when you will get your money back and how much you will get, and you can benchmark this against the market to decide whether you are comfortable with a given rate for a given "mission".

In addition to clarifying the issue, debt is a good thing because we have historical data on what can be done. Microfinance is for a big part about helping entrepreneurs in developing countries. This is debt to finance small businesses.
And "Social Capital" in the US can be done the same way, with the difference that you need more than a few dollars to help an entrepreneur here. And the good news here is that you do not need huge amounts of money in the US either: according to Inc Magazine, and looking at their Top 5000 fastest growing companies, the average capital to get started for companies in the list is $25K, and if you look at their top 500 it is $75K.
The default rates from Grammen Bank (microfinance) are 1 to 5%, so very manageable, and there is no reason why we could not do as good in developped countries.

So there is an opportunity to make a big impact, and I am convinced that Social Capital is the next big thing because we have no other choice if we want to world to become a better place...

By: Grunche

Grunche — Fri, 31 Oct 2008 17:43:45 +0000

Capitalism is the longer and harder road, but necessary, towards a classless society and without State: communism.

By: Glasshouse Partnership | Branding Social Capital. Corporates must step up…

Fri, 31 Oct 2008 09:56:56 +0000

[...] Social Entrepreneurs are the latest to try and claim the term…aligning social capital closely to ideas of future capitalism and creative capitalism… [...]

By: bhalchander

bhalchander — Fri, 31 Oct 2008 05:00:23 +0000

Good article . If we analyze the organizations you mentioned, I think there is great potential for new kinds of businesses to emerge. I think all these organizations will have a primary mission to do good with financial returns being secondary.
Types of businesses which might emerge : Triple bottom line, double bottom line, social businesses ( i.e. no dividend to shareholders).
Capital source options: funded like traditional business, social venture funding, patient capital, crowd funding, grants,etc..

A matrix on the 'business goals' and 'capital sources' might give all possible combinations of new types of organizations.

By: Chris Morrison

Chris Morrison — Fri, 31 Oct 2008 02:08:30 +0000

This is just my own opinion, but I wasn't considering businesses that have a regular business plan (e.g. brewing beer) but just give a good deal of money away to causes to be part of this particular group of companies. That seems to be much of what the WSJ is talking about.

Take D.light for example. They're not giving away any of their profits. Their actual product is the charity — just a cheap light designed for people in the developing world.

Then again, I'm not the one writing the definitions. Thanks for the note

By: Scott

Scott — Thu, 30 Oct 2008 21:59:31 +0000

Twitter now has a new competitor

Niche market MicroBlogg. It's been called the Twitter for VC's and entrepreneurs. A microblog with a purpose: http://www.venturedig.com

By: Will “social capital” be the next big industry to emerge? « CommunityLend blog

Thu, 30 Oct 2008 19:46:32 +0000

[...] October 30, 2008 · No Comments Here is a link to a recent thought-provoking article from VentureBeat journalist, Chris Morrison, entitled "Will "social capital" be the next big industry to emerge?" [...]