Since 2011, Laurie Lane-Zucker has been building social entrepreneurship ecosystems. He founded Impact Entrepreneur, a LinkedIn group, to combat the isolation and dislocation he felt as a social entrepreneur working in the hills of Sheffield, MA, in the Berkshires. Today that group counts 17,000 members around the globe. From there, he created a consulting arm followed by a think tank, the Impact Entrepreneur Center for Social and Environmental Innovation, which has pursued concepts including regional impact economies and public benefit enterprise zones.
Lane-Zucker’s latest project is Impact Inside, a network of social enterprise incubators for ventures focused on the UN Sustainable Development Goals (SDGs). The incubators will be located at various universities and co-working sites, tapping impact investing and entrepreneurial incubator tech platforms.
After sending out a call for places interested in participating in pilots, Lane-Zucker heard from about 80 cities, from Amherst, Mass. to Nairobi, he says. Each pilot location needs a partner that provides space and another to provide financing, though, in some cases, that might be done by the same entity.
Lane-Zucker is counting on the strength and breadth of his network to add an extra punch to what the incubator will be able to offer. “We’re bringing to bear the largest global network of entrepreneurs, investors and scholars who are focused on impact—an incredible collective of educational, intellectual and on-the-ground business experience,” he said.
The plan is for each pilot location to kick off with a challenge, inviting applications from entrepreneurs focused on the SDGs, with an emphasis on goal #2 (“End hunger, achieve food security and improved nutrition, and promote sustainable agriculture”). Each place will choose 5 to 10 teams, who then will go through the incubator program.
That will include a combination of online and on-site activities. After a one-day orientation, teams will be matched with a set of appropriate mentors, tapping Impact Entrepreneur’s network. They’ll spend the next four to six months working remotely, using Bridge for Billions, a technology platform for online startup incubation, to come up with an investor-ready plan with marketing strategy, financial models and the works. They will also participate in educational webinars.
Towards the end of the process, entrepreneurs will get access to the CASE Smart Impact Capital platform, which supplies tools and lessons for finding impact investors.
Acknowledging the difficulty that social entrepreneurs face in finding funding, both from foundations and conventional sources, Lane-Zucker is creating a new financial instrument, which he’s calling an Integrated Impact Finance Vehicle (IIFV)— or “iffy”—to help support some of the enterprises going through the program. The goal is for it to provide a gradual mix of grants, debt and private equity as a social enterprise grows. It would include a donor-advised fund and seek to engage family offices as well as foundations.
The IIFV “would create “a fundamentally different, healthier and infinitely more impact entrepreneur-friendly funding continuum,” explained Lane-Zucker on LinkedIn. It is similar in concept to the “blended capital” strategies of organizations including RSF Social Finance.
Still undecided is whether partners, like hubs providing space, will take an equity stake in the enterprises. Whatever the decision, according to Lane-Zucker, the model could be especially attractive for co-working hubs, since it allows them to provide local entrepreneurs with access to a network of global resources. “How many hubs can do that?” he says.
As for who will fund the pilots, some participating universities might be able to provide financing for pilots they house. Other schools, along with hubs, likely will need to team up with a fiscal sponsor. Lane-Zucker is hoping impact investing-oriented foundations and community foundations, as well as individuals and local economic development programs, also will be interested in providing funding. He’s worked it out that a pilot with 10 teams will cost $130,000.
The call for partners will continue through this month. Pilots will run on their own timeline, so they aren’t all starting at the same time. The number of them will depend on how many viable partnerships Lane-Zucker can help put together.
The Impact Inside incubators are an evolution of the insights that sparked the creation of Impact Entrepreneur in 2011. While the idea of “systems entrepreneurs” is in vogue these days, back then, he was among the first to put social entrepreneurship within the context of systems change, with the declaration that “change-makers needed to be as focused on collaboratively building a supportive business paradigm and ecosystem…as they are on building the businesses themselves.”