Conflict area of Social Entrepreneurship and Venture Capital
The Venture Capital Club invites to the first event of this term. For us, the HHL Venture Capital Club, it is a great honour to have four very different panel discussion participants in order to receive detailed insights into the different perspectives of the topic of social entrepreneurship. Comparing the founder standpoint with the venture finance viewpoint as well as getting insights into the academic and practical perspective on this current topic.
Speakers/participants of panel discussion:
Thorsten Jahnke (Co-Founder of Social Impact gGmbH)
Steffen Zoller (Founder of betreut.de)
Stephan Stubner (Co-Founder of Monkfish Equity)
Andreas Suchanek (HHL Chair of Business Ethics)
David Hoffmann (Founder & CEO of Zuri)
On October 13th 2014, the HHL Venture Capital Club hosted an exciting panel discussion with the topic “Conflict Area of Social Entrepreneurship and Venture Capital”. Around 70 people, among whom were also many external participants, attended the evening event. The social entrepreneurial perspective of the discussion was represented by the external speakers David Hoffmann (Co-Founder of zuri GmbH), Stefan Zoller (Founder of betreut.de and CEO of care.com Europe GmbH) and Thorsten Jahnke (Co-Founder of Social Impact gGmbH). Furthermore, the HHL-internal speakers Prof. Stephan Stubner (Chairholder of the Strategy Chair and Partner at Monkfish Equity) and Prof. Andreas Suchanek (Chairholder of the Business Ethics Chair) provided interesting facts and experiences from a venture capitalist and ethical point of view respectively.
During the panel discussion, the facilitators as well as the attendees raised some challenging questions such as at which point an entrepreneur can call himself a social entrepreneur. An entrepreneur provides job opportunities for other people thus contributing to the economy and society as a whole, but a social entrepreneur differentiates himself from the latter by his motivation to really create social impact – a spirit and passion one can directly see in a social entrepreneur’s eyes.
However, does this passion suffice to attract investors? Traditional investors often perceive social entrepreneurs as ‘dreamers’ who do not seek to maximize their profits but rather aim at making the world a little better with their products and services. Social entrepreneurs on the other hand view traditional venture capitalists as too money-focused and rational-thinking. So, what does it take to bring them together and establish a partnership that satisfies all persons concerned?
During the panel discussion it became clear that one answer to this question is trust since trust is an invaluable factor necessary for all parties to create a shared understanding. Still, 95% of all venture capitalists do not invest in social ideas. How can this be changed? How about a quota for venture capital firms demanding that a certain percentage of their investment has to be dedicated to social entrepreneurs?
In this respect, the speakers agreed that a quota would probably increase the money available for social business ideas, but it would also bring about other problematic issues such as the specification of the right target quota and the potential discontent and lacking passion of investors who do not believe in their social investments. These and other questions were debated during the interactive panel discussion.
Overall, the event was a great success according to Carolin Schäfer, Co-Head of the HHL Venture Capital Club: “It was a very interesting discussion with a pretty diverse range of speakers. I was impressed by the good attendance of the Event, especially by the interest of external participants to attend our Event. As we have already received some positive feedback, we feel vindicated in our approach and will continue to organize guest lectures and panel discussion for the HHL-community.”