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Equal-Invest 6 December Finale - Green light from investors for five enterprises (10/12/2007)

Social investors responded warmly on 6 December to a pitch for a £40K loan from 19-year-old Kevin Condliffe, Director of Muddy Icon, which combats antisocial behaviour in Slough through engaging young men with dance. Muddy Icon was one of five diverse social enterprises that heard the desired 'yes, let's talk' message from investors at the finale of the Equal-Invest development programme for social enterprises. The other enterprises deemed investment-ready were:

• Brighter Future Workshop based in Skelmersdale, Lancashire, which employs disabled and disadvantaged young people to help refurbish mobility equipment
• West Anglia Crossroads, which provides respite care in order to relieve carers in Cambridgeshire
• Compass Peterborough, which provides advice and affordable goods to local disadvantaged communities
• Emmaus Bristol, which offers a new start to homeless people through community living and recycling work

Funding to achieve self-sufficiency and foundations for growth

Muddy Icon needs the £40,000 to establish a venue to offer private, paid-for dance training, the profits from which will enable its free outreach work to continue without third-party grants. Other enterprises had identified different routes to self-sufficiency and growth, such as new equipment or a year's salary for a business development person.

Feedback from the investors

The potential investors who heard the pitches were:

• Sue Cooper, senior manager at Triodos Bank
• Nigel Kershaw, CEO of Big Issue Invest
• Naomi Kingsley, CEO of the London Rebuilding Society
• Henry Pitman, independent investor

The two panellists who had participated in the 17 October practice pitching event commented on the step-change in enterprises' confidence between the two events. All panellists gave the pitchers valuable feedback, from 'Are you trying to achieve too much too quickly?' and, 'You'd be much more compelling if you reported on your profitable activities separately from the others', to 'It's fantastic how your ideas have come out our your grass-roots knowledge of conditions,' 'I think there's a real gem in here,' and 'This model could be rolled out nationally.'

The next steps will be one-to-one meetings between the interested investor and the enterprise, followed perhaps by due diligence. The investors may well suggest alternative routes to growth that the enterprises haven't so far explored. Thus the dialogue with investors will continue the development of the enterprises as businesses that the Equal-Invest programme started.

Background on the project

Equal-Invest is funded under the European Social Fund's Equal initiative in the UK. Equal has goals in the areas of entrepreneurship, employment, equal opportunities and sustainable development. Equal-Invest contributes to Equal's goals by empowering innovative social enterprises that promote equality and diversity by their activities and by their selection of employees. Through access to investment and expertise, these social enterprises are getting the opportunity to overcome the obstacles that are limiting their size and their impact on the community.

How the project developed all participants

The Equal-Invest finale may have looked like the television programme, Dragon's Den, with nervous enterprises delivering strictly timed pitches to the panel of four seasoned investors. But Equal-Invest was designed to develop all the participating enterprises rather than sort winners from losers. The project, which began only in July 2007, has improved the business skills of 15 ambitious and very different social enterprises through consultancy, mentoring and a practice pitching event on 17 October with feedback from real investors. Of the 15 enterprises that started the programme, only seven pitched on 6 December. But the decision taken by some enterprises not to pitch was a positive one: at the 17 October practice pitching event, John Montague, chief executive of the Trees Group and a member of that day's investor panel, had advised enterprises that building their own revenue streams from trading could well be a better option than seeking external funding - and that external funding would in any case be easy to come by when they could demonstrate strong cash flow from trading.

Tribute to the volunteer mentors

At the 6 December finale, Dan Gregory and Justine Dapalmavieira from the Cabinet Office presented tokens of the project's gratitude to the volunteer mentors who had made a vital contribution to the project's success. Through one-to-one coaching, the mentors developed the enterprises' skills in business strategy, planning, marketing and finance, and helped the enterprises to present their vision and their case for funding.

Equal-Invest partners and core stakeholders

The mentors were recruited and managed by Eastside Consulting ( www.eastsideconsulting.co.uk), one of the partners in Equal-Invest who also supported the development of the social enterprises. The lead partner for the Equal-Invest project is Tribal Group plc (www.tribalgroup.co.uk). Tribal's role is to provide overall project management (including management of all investment events) and (through Tribal Education and Technology CTAD) to develop a virtual space and software tools. Big Issue Invest, abdi ltd and the Social Enterprise Coalition are core stakeholders in the project. Big Issue Invest (www.biginvest.co.uk) part of The Big Issue group is a specialised provider of finance to social enterprises. The Social Enterprise Coalition (www.socialenterprise.org.uk) is contributing its expertise on social enterprise and abdi ltd (www.abdi.eu.com) is using the ROI methodology to evaluate the project overall and its impact on the social enterprises.

Evaluation of the project

Perhaps Equal-Invest's most unique aspect is the built-in ROI evaluation - this means that the progress made by the enterprises during the project can be measured according to objective criteria not just assessed by a more subjective perception of improvement. The ROI approach acknowledges that the project is not happening in a vacuum and uses standard means to isolate the added value that can be attributed to Equal-Invest. The evaluation will generate evidence and analysis that can be applied to other projects. On 6 December abdi presented one phase of this analysis showing the enterprises' audit of their progress attributable to Equal-Invest between August and November. Case studies of selected enterprises will follow giving an in-depth picture of how the project has changed them.

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Pitching for Growth (29/11/2007)

After several months of intensive support from the Equal Invest project, eight social enterprises have resolved to go forward and pitch for investment funding on 6 December. The amounts they will be asking for vary between £20,000 and £1 million and the purposes include premises, equipment, product development and extra staff. The eight enterprises are:

• Brighter Future Workshop
• Commedia Sheffield
• Elemental Worldwide
• Emmaus Bristol
• West Anglia Crossroads
• Compass Peterborough
• Inclusive Solutions
• Muddy Icon

They will be pitching to a panel of very experienced social investors who between them are in a position to fund further growth for any or all of the enterprises. The panel will consist of:

• Nigel Kershaw, Chief Executive, Big Issue Invest
• Sue Cooper, Senior Manager, Social Banking Team, Triodos Bank
• Naomi Kingsley, founder and Chief Executive, London Rebuilding Society
• Henry Pitman, founder of Tribal Group and angel investor

Photos from the practice pitching event held on the 17th October 2007 may be viewed here.

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The 17 October pitching rehearsal (29/11/2007)

'It's really encouraging to see the learning that's gone on today,' said Sue Cooper, senior manager of social banking at Triodos Bank towards the end of the 17 October practice pitching event. Over the day, eleven social enterprises made the case for investment funding to a panel of genuine potential investors such as Sue Cooper and received feedback that will help them to strengthen both their real pitches and their business strategy.

Equal-Invest is all about developing the participating social enterprises, taking them step by step into a more commercial environment. One of the innovations planned from the start was a full-scale dress rehearsal for the culminating pitch to potential investors on 6 December. The timing of the rehearsal allows the social enterprises to reflect on the investors' feedback, clarify their goals and modify their plans, as well as to perfect their pitches before 6 December.

The structure of the day allowed four self-selected social enterprises to repeat their pitches late in the afternoon after absorbing the morning's feedback and the afternoon's coaching. All four repeat pitches demonstrated the learning that Sue Cooper noted. The quality of presentation was improved, with better self-introductions and crisper pacing, as the presenters covered all the expected ground, including financials, business goals and what they wanted the funding for. One business had been asked in the morning to clarify its status as a social enterprise rather than simply an SME. By the afternoon the answer was clear: not only would the product benefit the disadvantaged, but a proportion of the business's profits would also be ploughed back via a trust into meeting social goals. Another enterprise had managed to adjust its business proposition radically in the few hours since the morning's feedback.

Equal-Invest aims to document the value added by the project, taking care to exclude improvements that cannot be attributed to the project. Towards this end, each of the participating enterprises recorded their learning from the day and their resulting planned actions, which will be noted and followed up using Equal-Invest's online forums. Following advice from one of the panel members (John Montague, chief executive of the Trees Group) that external funding is not hard to come by if the business's revenue stream is strong, a number of enterprises made an overhaul of their sales plans an urgent priority. Others resolved to review and clarify exactly what they would use external funding for, and how much they wanted to pitch for.

Photos of the event are available here.

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17 October: filmed rehearsal for December pitching event (05/10/2007)

On 17 October, 14 social enterprises seeking investment for growth will take part in a filmed rehearsal for a pitching event to be held on 6 December - this is the high point of the Equal-funded Equal-Invest project. The audience for the trial pitches will include heavyweight investors in social enterprises such as Nigel Kershaw, chief executive of Big Invest, and Mike Baker, chief investor of the Local Investment Fund.

The primary purpose of the day is to give the social enterprises an opportunity to practise pitching and to receive constructive feedback from the types of people and organisations that are most likely to invest in them.

The day also provides the first opportunity for the social enterprises to meet face to face with the mentors that have been helping them address their learning needs, and with the Equal-Invest partners: the Tribal Group plc, Eastside Consulting Ltd, the Social Enterprise Coalition, and Abdi Ltd.

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Scorecard of success for Equal-Invest development project (02/10/2007)

The newly completed "scorecard" for evaluating the ESF-funded Equal-Invest project sets out the project objectives and how achievement of each objective will be measured and evidenced. The project evaluator (Abdi Ltd) has selected the ROI ("return on investment") framework as the best structure for reporting on the success of the project to prepare 15 social enterprises for pitching to investors. The ROI framework groups data into five levels, from 1 (reaction and engagement) to 5 (value).

The objectives set out in the scorecard reflect the project's many dimensions. Equal-Invest aims to develop social enterprises that are valued both for their potential to empower citizens not represented in the first or second sectors, and for their delivery of public services. If this second role is to expand, enterprises need to grow in part through investment. Hence another of Equal-Invest's aims: to broker investment in social enterprises. One of the objectives at level 4 is that at least 25% of the enterprises are offered investment following the end-of-project pitching event.

The targets of the social enterprises being supported represent another dimension of the project. In many cases these targets, such as employment of disabled workers, parallel national and/or EU policy. Case studies will be used as level 4 evidence against this objective.

As a project funded under the Equal programme, Equal-Invest needs additionally to be evaluated in terms of the priorities of Equal, notably innovation, empowerment, and equality and diversity.

Mainstreaming or long-term impact is a goal of the project and therefore an element of the evaluation. Mainstreaming of practice includes developments in the participating organizations that are sustainable. It may also include bringing into widespread use new types of mentoring, L&D services and investment brokering services for social enterprises. The potential impact of the project on policy also needs to be considered. Here the measures relate to engagement with key policy stakeholders and to the generation of robust evidence that could be used to inform policy development.

Finally, the project will be reviewed in terms of value for money. The end-of-project evaluation report will include a cost/benefit analysis of all the major outcomes.

Evaluation scorecards tracking impact at levels 1 to 5 are an invaluable tool by which projects and indeed whole organisations can monitor progress against objectives. Although initially developed for businesses with a strong bottom-line focus, they are equally suited to a project with primarily social goals such as Equal-Invest.

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Enterprise Recruitment Report (25/09/2007)

The Enterprise Recruitment Report is available here.

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Mentor Recruitment Report (21/07/2007)

The Mentor Recruitment Report is available here.

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Learning and issues from the mentor workshop (20/07/2007)

The September 17th workshop aimed to give mentors the clarity and confidence they needed to move forward with their enterprises towards the 17th October event. Presentations and dialogue provided detailed information on finance options and the investment-readiness process. After lunch the discussions focused on the areas where enterprises had requested help from the mentors: business planning, financial planning and marketing. The differences between the needs of the enterprises were more striking than their similarities. Some were already focusing on the pitch to investors and how to optimise their chances. Some faced immediate funding problems and had requested advice on tiding themselves over until the December pitching opportunity. Some were struggling to bridge the gap between their social aspirations and day to day business operations. The support and training provided for the mentors will now aim to address both the common needs of the social enterprises and the particular issues faced by the mentor's enterprise.

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Equal-Invest mentors' workshop (18/09/2007)

On 17 September the Equal-Invest programme is providing a workshop on financing and investment readiness to its fourteen volunteer mentors. The mentors come from a range of backgrounds including coaching, accountancy, entrepreneurship and academia. They offer the programme a rich and diverse range of skills. The workshop is to ensure that all mentors are confident in supporting their social enterprises in preparing to pitch to potential investors - initially in a dress rehearsal on 17 October and then for real on 6 December.

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Project report on selection of social enterprises completed (12/09/2007)

The first report for the Equal Invest programme has been completed. The report scrutinises the recruitment and the selection of eligible social enterprises and was undertaken by abdi as part of its evaluation of the project.

The timescale for recruitment was tight. Key channels for awareness-raising in June 2007 were the Equal programme and the networks of the Social Enterprise Coalition. Twenty-nine social enterprises completed applications by the July deadline. Those meeting the mandatory requirements were scored against selection criteria that included indicators of social mission employee disadvantage and enterprise viability. Fifteen enterprises were selected and all accepted.

The enterprises' activities are varied ranging from manufacturing and refurbishment to training and theatre. Managers from the selected enterprises show a fairly good ethnic balance with African and Caribbean ethnicities well represented but Indian and Pakistani somewhat less so. Four out of fifteen selected enterprise leaders have a disability.

The selected enterprises were slightly more likely than the average applicants to have a turnover of over £100,000. A loss in the previous year was no barrier to selection and the amount of funding sought did not seem to have a bearing on selection.

Ideally, more time and effort would have been putting into targeting particular groups but the process and achievement were impressive given the short timescale available.

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Consultant/mentor handovers (31/08/2007)

Mentors of the social enterprises have now received the consultant' "health checks", which identify the critical outcomes and actions that the enterprises must take to be ready for investment. The consultants and mentors have been contacting each other to ensure a smooth handover, and mentors are now arranging their first meetings with the social enterprises to start work on the actions identified in the health checks. Some mentors have requested extra support from Eastside Consulting (for example on fundraising) so that they can then meet the support needs of the social enterprises.

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Health check news (14/08/2007)

Consultants from Eastside Consulting are completing "health checks" this week with each of the Equal-Invest enterprises. The health check template is now available on the site for mentors to review.

The essential outcome of the health check will be the identification of critical outcomes and actions that the enterprises must take in order to be ready for investment. These prioritised outcomes and actions will form the basis for the partnership between the mentors and enterprises, and help both groups measure their progress throughout the programme. By mid-August, all the mentors and enterprises will have been introduced to each other, and will have the information and resources they need to start moving forward in their collaboration.

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Induction day news (14/08/2007)

On 1 August, all of the 15 mentors chosen to support Equal Invest's selected social enterprises met together for the first time and discussed their role with Equal Invest partners and stakeholders.

The day included an introduction to the programme by the project partners, an exploration of the mentors' motivation for getting involved, and provision of information and resources on the readiness of social enterprise investment. Mentors talked about they would like to get out of participating in the programme, including: "giving something back", developing new professional competencies, and engaging with the social enterprise sector. A framework and processes to support and evaluate mentors' and enterprises' learning and progress was also introduced. Finally, mentors were able to share their passions, interests and background as part of the process of matching mentors and enterprises.

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