According professional association UKBI there are currently around 300 incubators in the United Kingdom, supporting more than 12,000 innovative businesses.
For those lucky enough to be selected, a good incubator programme can make a huge difference to a young company’s chances of survival by providing help in key areas such as business planning, marketing, management team creation and attracting investment.
And over the last couple of years the UK government has undertaken programme to extend the scope of incubation to the increasingly important “social venture” arena. Back in 2012, the then Minister for Civil Society, Nick Hurd announced the launch of a £10m Social Incubation Fund, which would provide grants to support the operation and investment books of up to ten incubators. Since then a number of incubators have been established and funded.
So how does a social incubator work in practice? I spoke to Belinda Bell, Programme Director for Social Incubator East to find out.
As she explains, Social Incubator East is supported by a number of partners. These include Cambridge Judge Business school, which provides much of the educational input and Allia, a charity with long-established experience of hosting social-impact ventures in the East of England area.
What Is A Social Business
The organisation is relatively liberal in its interpretation of what constitutes a social venture. Traditional social enterprises operate as fully commercial businesses but any profits made are largely reinvested, rather than going to shareholders, and no matter how successful the operation becomes, founders can’t look forward to selling out and crystalizing a life-changing sum on exit. However, there is an equally important group of entrepreneurs who are focused on creating a business that delivers a social benefit without necessarily constituting their companies on the social enterprise model. In other words, they want to do good and also have the opportunity to make their fortunes. “We don’t take a view on the legal structures,” says Belinda Bell. “We have companies that are constituted as traditional social enterprises and we also conventional limited companies. What we focus on are the intended social outcomes. Social impact should be the primary motivation”
Social Incubator East is looking for businesses that have the capacity to scale up but unlike many conventional incubators there is no bias towards specific sectors, such as tech. “Or focus is on the East of England,” Bell adds.
A Tailored Programme
In many respects, the organisation’s approach mirrors that of conventional incubators. In the first instance, social ventures are invited to attend training weekends at a cost of £50 and although these are open to everyone, places are limited. The next stage - which is selective – is place on a twelve month programme which provides not only a working environment but access to education, technical support and mentoring.
“Businesses will join the programme at different stages,” says Bell. “But when they finish we want them have a business plan that is actionable, sustainable and fully funded.”
The SEI also hopes that ventures completing the programme will be ready to scale up their operations and growth potential is an important factor when candidates are selected. “We are looking for ventures that we feel we can help,” says Bell.
Spot The Difference
And it’s that point that highlights one of the key differences between social venture companies and other kinds of businesses. Although new models are being developed, investment can be difficult to obtain, particularly outside London. “One of challenges we face is to develop the investment ecosystem around Cambridge and in the East of England,” she says. Other specific challenges specific to the social venture sector include helping companies deal with a range of legal issues and the formation of advisory boards.
The success of a social venture ultimately can’t be measured purely in terms of profits and growth and Bell stresses that SIE’s does not see success in terms of one or two ‘big’ ventures emerging from each cohort. The goal is to maximise the ability of all the applicants to create sustainable ventures that have the capacity to grow, create jobs and have a social impact.
With registrations now open for the next training weekend and advice available on the incubator’s site for all social ventures, SIE is hoping that it can make a real impact across its East of England catchment.
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