The CIC needs to change. That’s community interest company to the uninitiated.
Simply really. We need to change it one simple way for two reasons:
How?
The asset lock needs to look like the dividend cap. Some portion of the asset needs to be available for private asset appreciation.
Why?
1. Social Entrepreneurs need to be fairly compensated for creating value for social benefit. We aren’t talking about anything close to traditional Entrepreneurs and yet the social entrepreneur often leaves a larger legacy.
2. Investors need to be enticed to put capital into social businesses in the form of equity. This is only really possible if the investment can appreciate.
Let’s change the CIC to allow some portion of the asset to be available for a return. You can place all kinds of caveats on the changes if you are paranoid; examples include a cap (35%), a portion of the unlocked asset must be in the form of employee shares, the unlocked portion cannot exceed private investment, etc.
I am hearing rumblings of pent up socially-minded money waiting to invest in our kinds of businesses. We need to unlock that potential to grow the movement. We don’t need more debt, we need more investment.
Related posts:
Whoa steady Tiger!
Firstly why should just CICs from the pantheon of SE legal structures provide a reward to the entrepreneur in proportion to the value created, and a reward to the investor in proportion to the risk and the level of investment?
Also taking capital investing it, providing a ROI to both investors and entrepreneurs and making the world a better place would just be what ‘good’ for profits do.
Perhaps that would be a good thing.
Let’s stop seducing passionate caring entrepreneurs into the ‘progress traps’ that so many social enterprises become!
Seduced by notions of a morally and ethically superior movement (whiffs of fascism), seduced by cheap money from the state. Seduced by an instant injection of street credibility by the label.
I don’t give a a damn about how an entrepreneur negotiates deals with those who supply capital. All I care about is whether they radically pursue ‘good work’ in the Schumacherian sense.