TISE SA in the autumn of 2018 won the competition organized by the Ministry of Investment and Development to create, within the framework of the EU POWER program, a social venture capital fund intended for social enterprises.
Social Venture Capital (SVC) is a method of financing using a venture capital strategy model and instruments known from the capital market to finance non-governmental organizations, social enterprises or activities that generate a large social impact. The traditional financing model is mainly based on loans or guarantees, and thanks to SVC, these entities can use the equity or quasi-equity instruments. Innovative support, combined closely with consultancy throughout the investment period (including in the area or running a company), will increase the potential of social enterprises not only in the financial aspect, but also substantive and organizational. Thus, SVC is an innovative financial instrument that will increase the opportunities for the development of social entrepreneurship in Poland.
In the project, we use our many years of experience from both the traditional venture capital market, where we operated over a dozen years with more than ten years of experience in lending to social economy entities – says the head of the project, Michał Radziwiłł – the president of TISE.
TISE has already established a company – Fundusz Kapitałowych Inwestycji Społecznych (FKIS Fund), which will carry out investments. The process of accepting applications has also started and advanced conversations with the first potential investors are being concluded.
11.3 million zł was allocated to the program Funds come from the EU Knowledge Education Development Program (Measure 4.1 Social Innovation) and from TISE own resources. Transactions may be concluded by the end of June 2023 or until exhaustion. The investment will be long-term, up to 10 years.
The project offers financial support in the form of two financial products, ie: capital and subordinated loans (facilitating the acquisition of financing from other sources) and consulting services supporting the investor.
The fund will support entities throughout the country by investing in social enterprises of various legal form, implementing projects in the areas of care services, creating jobs for people at risk of social exclusion, supporting obtaining or maintaining independence and ecology.
Each social enterprise wishing to join the Program will have to meet five basic criteria:
- An enterprise is or has a chance to become an economically independent entity an economically independent entity or develop organizationally maintaining the ability to operate an investment vehicle.
- The company has a clear, real vision of achieving, as a result of the implementation of investments with specific, measurable and qualitative effects. An additional advantage will be the development of an effective and reproducible model of the social economy based on healthy business rules.
- The company has an effective and supporting team ready to combine consistent and long-term implementation of social and business goals.
- The company’s managers express their willingness, confirmed by an agreement, to undertake long-term, transparent cooperation with TISE. This cooperation will be based on the rules of capital or quasi-equity investment.
- The company is looking for external financing up to a maximum investment value of about 1million zł, or, in the case of larger needs, is willing to combine various instruments available on the market within a given project.
SVC is an innovative instrument that also allows to finance these investments and ideas of social entrepreneurs, which sometimes do not fit into the rigid framework of the loan process. It gives the opportunity to implement even very risky, but socially important, projects – declares Michał Radziwiłł.
Organizations that are interested in using this form of support may submit their applications to the following e-mail address: email@example.com