Creative Financing for Social Enterprise
Document Type
Article
Publication Date
Summer 2014
ISSN
1542-7099
Publisher
Stanford University
Language
en-US
Abstract
Social enterprises, like all ventures, leverage ideas through the application of capital. To bring innovative products and services to market -- to produce robust and scalable social change -- businesses of this kind must have access to reliable funding. Without access to capital, even the most compelling social enterprise idea will go nowhere. In discussing the challenge of capital access, social enterprise advocates often argue that traditional nonprofit and for-profit legal forms compel entrepreneurs to choose between protecting their social vision and raising capital. For capital to flow to social enterprise, entrepreneurs and investors must be able to rely on one another's commitment to a double bottom line. Hybrid financial tools combine elements of standard debt and standard equity to fashion a product that provides substantially increased flexibility. The authors envision a financial tool that they call FLY Paper. FLY stands for "flexible low-yield." FLY Paper is a variant on the convertible bond -- perhaps the best-known hybrid debt instrument.
Recommended Citation
Dana Brakman Reiser & Steven Dean,
Creative Financing for Social Enterprise
,
in
12
Stanford Social Innovation Review
50
(2014).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/3410
