Beeline Reader
It is no secret that access to capital is the biggest binding constraint to growth for social entrepreneurs. Nearly 60 percent of our current Solver teams are structured as for-profit entities, and at any point, about 50 are actively raising funding. At Solve, we are committed to pursuing creative ways to use philanthropic and commercial capital to advance the goals of these incredible innovators.
As of our March 1, 2021 Challenges launch, we have over $1.5 million in funding pre-committed to the newest Solver class, which will be selected in September 2021. This year, we are thrilled that some of this funding may be invested directly into our Solver teams via our Solve Innovation Future venture fund.
Every year, when Solve picks the 30-35 social entrepreneurs to join our incoming Solver class, about half are set up as for-profit organizations. For these for-profit Solver teams, an investment could help to close an active round, or act as a catalyst for future investments.
In such cases, it would benefit the Solver team, the funder, and Solve to structure prize funding as an investment. An important note: decisions regarding the structure of a prize as investment is independent of Solver selection decisions, which happen in September 2021. Further, prize funding announced when Solver teams are selected in September 2021 will all be disbursed in the form of grants. Investments will only be deployed in the form of “follow-on” funding–capital that can be awarded to select for-profit Solver teams at the end of their cohort year in May 2022.
For the Solver, this source of capital helps advance their progress to commercialization in pursuit of fundraising and growth objectives. Solve’s investments are intended to be founder-friendly in nature–i.e. an investment that recognizes social benefits in addition to financial returns. Once a Solve Innovation Future investment is executed, investees have access to post-investment backing, including additional strategic and growth coaching, network building, and mentorship.
For Prize funders, this is an opportunity to multiply the impact of their funding. By disbursing capital in the form of an investment, any returns generated stay with Solve Innovation Future and can be re-invested in future Solver teams. This is a serious multiplier effect for a one-time donation from the funder.
For Solve, employing alternative disbursement strategies helps to ensure that we are thoughtful about our own resources, presents an opportunity for us to experiment with disruptive philanthropy, and enables us to deepen our own impact by recycling prize funding into future Solver teams.
We believe that today’s global challenges will only be solved with a rich ecosystem of innovation, business and funding models, and partnerships working together to scale new solutions and build lasting, positive change.