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• examine key components of the entrepreneurial economy, including…

- - - - seed stage funding
        
        options
        
        Founder’s financing
        
        Informal investors
        Initial start-up funding comes from the ‘4Fs’—friends, family, founders and other ‘foolhardy investors’ (neighbours, work colleagues and even strangers)—also known as informal investors. Informal investors use their own money and carry out their own (sometimes haphazard) due diligence to invest in the entrepreneurial opportunities of entrepreneurs. This investment may be either debt funding or in exchange for an equity stake.
        
        Accelerator programs
        The last decade has seen the rise of accelerator programs around the world (e.g. Y-Combinator, Tech Stars and 500 Startups). These programs invest in entrepreneurs in the seed stage and give them 12 to 16 weeks of intensive training and mentorship as well as a small investment
        of $20 000 to $50 000 in exchange for 6 to 7 per cent equity in the company. Needless to say, entry into these programs is extremely competitive with many more entrepreneurs applying than are accepted.
        
        Peer to peer lending
        Peer to peer lending is the practice of lending to unrelated individuals without going through a traditional financial institution. This is facilitated by peer to peer lending companies who have an online platform and a system of credit checking.
        Australia’s most prominent company in this space is Society One. Individuals can borrow between $5000 and $35 000. Interest rates currently range from 8.95 per cent for individuals with an excellent credit rating to 19.94 per cent for a borrower with a below average credit rating (Society One 2015).
      - Sources of funding for start-up stage ventures
        
        Crowdfunding
        Crowdfunding is a method of funding a venture by raising contributions from a large number of people, usually via an internet based crowdfunding platform such as Kickstarter.com or Indiegogo.com. Crowdfunding campaigns tend to work best for product based start-ups— once the entrepreneur has completed and tested the product and is ready to start production. Contributors to the campaign, called backers, are given a reward for their contribution that can range from an acknowledgement to receiving the product itself or other more valuable rewards. Crowdfunding can be used to raise anywhere from a few thousand dollars to hundreds of thousands or even millions for successful campaigns.
        
        Angel investors
        
        • domain expertise in a specific area, often science or business;
        • high levels of annual income and net worth, and invest 10 to 12 per cent of their capital in entrepreneurial firms;
        • expect a minimum rate of return of 20 per cent; and
        • wish to exit in three to seven years.
        
        Business angel investment has some potential downsides. FSD
        
        • First, business angels are less likely to make follow-on investments in the same firm. (Conversely, venture capitalists spend approximately two-thirds of their funds on expansion funding of their existing portfolio of firms).
        • Business angels prefer to have a say in the running of the firm, which may force the entrepreneur to give up some control. Some business angels have limited expertise in running the particular type of investee firm that they fund, making their contribution less valuable and more meddlesome.
        • A small minority of business angels may turn out to be ‘devils’ who have self-serving motives for investment, rather than promoting the good of the firm.
      - Sources of funding for early growth stage ventures
        
        Commercial banks
        The business may be sufficiently established at this stage to be able to access business loans and other products supplied by commercial banks.
        
        Venture capital
        
        VC firms
        raise funds from sophisticated investors and then use the money to invest in early growth,
        high potential start-ups. VC investment is usually done in stages called rounds; more investment
        is released once the venture has reached certain milestones.
        Raising VC funds involves a lot of effort for the entrepreneur in networking and pitching to VCs and then complying with the VC’s due diligence processes. It is not uncommon for this process to take 12 months. Entrepreneurs must also be aware that this is a highly professional and technical area of financing and it is crucial for them to review carefully and ensure that they understand all of the terms and conditions documents
      - Sources of funding for established ventures
        
        Private equity funding
        Private equity firms are investment managers. Much like VC firms, they raise a pool of funds from investors and then they use those funds to take a controlling or substantial minority shareholding in a private company. Private equity firms look to maximise their investment by using their expertise to take the business through an initial public offering (IPO), a merger or acquisition or a recapitalisation.
        
        Government assistance for start-ups
        Governments around the world offer a variety of assistance for ventures. The federal, state and territory governments in Australia do not offer grants to start a business, only to expand, develop and export.
- - - - men more likely to start but only just
        
        25 to 44,
        
        The study also finds that individuals with higher levels of education are more likely to engage in social entrepreneurial activity, especially in those countries with lower levels of economic development.
  - - - • Accountability considers the extent to which the venture assumes implicit or explicit social responsibility. For example, CDDP’s accountability is to disadvantaged people who are living in poverty.
        • Evaluation involves the systematic study of the quality or success of activities and they must be useful and cost-effective, and focus on the correct measurement.
        • Outcomes refer to the extent to which social value is created.
        • Performance can be measured on a continuum (e.g. with a precise scale, such as the number of people served), via a rating scale (e.g. ask people to rate the effectiveness of outcomes on a five-point scale) or a binary scale (e.g. answers on a yes or no scale).
    - - Enterprise value (Value of sales – Cost of goods and services sold – Operating expenses)
        
        Social purpose value (Grants and gifts – Fundraising and grant writing costs + Social cost savings
        
        – Social operating costs – Increases in taxes) – Debt carried by social enterprise
  - - - Define and reach the target markets, asking questions such as: –– Who are the clients, and how can they be reached?
        –– What is the optimal price for services?
        
        –– How should we communicate with clients?
        
        Complete a thorough external analysis to consider other constituents such as donors and governments, and develop a marketing strategy.
        
        Look externally to competitors, and consider all sources and the industry.
        
        Conduct an internal analysis to consider what the social venture does and does not do.
    - - the win (acquiring new donors or regaining lapsed donors);
        
        keep (maintaining active donors); and
        
        lift (moving current donors to higher giving levels).