Big Issue invest has teamed up with social entrepreneur funding foundation UnLtd and design agency Shift to announce a social investment fund offering finance and support to diverse early-stage social businesses.
The Growth Impact Fund has early investment from Bank of America and Big Society Capital, and hopes to reach £25m.
It has been developed in collaboration with a diverse range of social entrepreneurs and hopes to address the structural barriers of inequality within social investment, as highlighted by the Adebowale Commission. The commission ran between February 2020 and January 2022, and found that despite £600m of public investment since 2010, the social investment market remained unchanged.
These barriers mean current finance “doesn’t quite work,” according to Danyal Sattar, CEO at Big Issue Invest. “We know a large pool of talented and diverse investees exist who aren’t being served by current products,” he said.
The fund will offer between £50k and £1.5m to its investees, who must have 75% of their board and 50% of their management team from one of the inclusion groups: women, disabled people; Black, Asian, minoritised ethnicity, Gypsy, Roma, or Traveller; LGBTQIA+; and have direct lived experience of the social issues the social business is focused on and socio-economic disadvantage.
As well as funding, Growth Impact will offer investees wrap-around support.
Sara Redford, chair of the social impact investment committee for the Growth Impact Fund, said: “The Growth Impact Fund has been structured by listening to the sector, being open-minded and thinking differently.
“I have seen first-hand the frustrations that social purpose organisations and investors suffer, and believe that the flexible, patient capital and technical assistance offering will help growing businesses thrive. The Growth Impact Fund will address the bias, which we know can close doors to diverse-led organisations, and share its learnings to wedge those doors open for more funds and entrepreneurs to follow.”