Foundation support to the SME sector

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Foundation support to the SME sector
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Foundations
Mission social/charitable purposeComparative
advantages - small non-bureaucratic
organisations - can accept high risk (the 4
Fs) - can bridge market gaps - move from
just grants to social investments Some
limitations - restrictive view of markets
- development v finance can impact scale-up -
projects not strategic partnerships -
legacy of non-performing SME funds
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Corporate Foundations
Diverse models - Varying independence -
Some closely related to CSR/philanthropy -
Others have core alignment with business Core
alignment - Harness corporate assets (eg
skills, tools) - Can attract suspicion -
Development Business interface
SME sector
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OUR APPROACH
Target market start-up/growth (50k-1m) Bus
model develop with strategic partner Product
BDA and appropriate finance Aim Maximise
financial returns (scale-up, exit) SF smart
subsidies to create infrastructure SF anchor
investor to leverage risk capital SF harness
assets of large companies SF active role in
governance MORE THAN MONEY
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Lessons
Foundations can play an important role, BUT -
financial approach to development sector- treat
grants like gold-dust- greater discipline of
social investments- invest in long term
strategic partnerships- leverage capital from
FIs- not compete with/replace private capital
VC/PE - ensure monitoring/reporting is fit for
purpose- choose partners like friends very
carefully SF attracting other Foundations to
SME sector