Everyone loves news about million-dollar funding rounds, but Australia’s new breed of entrepreneurs are searching for capital in new places, wanting more control over their businesses and sums much smaller than seven figures.
A new Australian funding and development hub, Social Change Central, launches this week as a portal to bring together funding and mentoring opportunities for members in the startup and social enterprise business space.
The operation is spearheaded by Promise or Pay founder Jay Boolkin and founder of social enterprise recruitment service SheWorks, Anne Lennon, who say the space has been fragmented for too long and many Australian social enterprises are unable to access funding in the early stages of their businesses because there’s no proven financial – or social – success yet on record.
“The reality is that many social enterprises aren’t at that stage of investing,” says Lennon.
“They do require more philanthropic support to get them off the ground.”
Social Change Central memberships will give users access to listed funding opportunities and resources for early stage businesses, many of which will aim to be profitable and sustainable companies that also bring some broader social good.
This type of company is gaining traction, with company founders suggesting to SmartCompany over the past month that younger business owners have reimagined exactly what a small business can contribute to the community.
“I think there’s a huge move towards business with purpose…my passion has shifted towards philanthropy,” co-founder of architecture operation Superdraft, Mark Deacon, explained last month.
The fight for funding has always existed, but Social Change Central is expanding the focus to smaller businesses that might not need to raise millions to get off the ground.
“Impact investors generally require two to three years or more of both social and financial returns,” says Lennon.
Many entrepreneurs simply can’t wait that long. Founder of eco-friendly feminine hygiene company Tsuno, Rosyln Campbell, told SmartCompany she took the crowdfunding route for her business because of the flexibility on offer – and she didn’t want to be beholden to investors for big sums without a proven business model.
The business has managed to grow while also supporting women in need by providing sanitary products to a range of community stakeholders – and it started with a callout for pledges to fund it.
“I felt like it’s the smartest way to enter the market,” Campbell says.
She considered applying for grants and funding after formulating her business plan, but was wary about losing flexibility in those early stages.
“I think I looked into it and got a bit scared off by having to have a really set plan – I was really just testing it and wasn’t 100% sure if it was really going to be possible. The idea of applying for grants or investment could have limited flexibility,” Campbell says.
Now the business has survived two years and emerged with a regular customer base – collected, in part, from the initial crowdfunding campaign – Campbell feels more ready to look at bigger investment amounts.
At the time of launching her business, however, the number of people she was able to connect with for mentoring and professional development was limited.
“I didn’t have anyone really who was a mentor in that space for me,” she says.
“I’ve made some amazing connections from people reaching out after, but [connections] would have been really handy to have.”
Lennon agrees, saying that while Australia has been great at championing individual businesses, the overall community is still missing pieces for both funding and development.
“There seems to be more of a focus on people setting up their own things, instead of the ecosystem,” she says.
“Funding is just one part of it – we recognise that entrepreneurs need more than just funding. They need mentorship; they need exposure – that’s why we’ve made the decision to start this.”
The Social Change Central site already lists $320 million of existing Australian and international funding opportunities for businesses, ranging from $10,000 seed funding to shares in million-dollar grants.