5 Things you must know about getting investment ready

Big Potential, a BIG Lottery Fund grant fund managed by the Social Investment Business aims to improve the sustainability, capacity and scale of voluntary and social enterprise organisations to deliver greater social impact.  In the context of Big Potential programme, we asked our social investment experts about getting investment ready and here are five things that could help you attract investment to realise your ideas, growth ambition and social impact.

  1. Revenue generation potential is really, really important!

Does your organisation, or a service/project with your organisation, have revenue generating potential? i.e. is there a trading element, is there a chargeable service you can provide to other organisations, businesses or individuals or do you have plans to substantially scale up fundraising? If you think that your ability to raise money in this way is limited, or at odds with your charitable objectives, then social investment may not be for you. This is because social investment, in the form of loan finance, needs repaying.

  1. Your big idea must also be big on detail

How developed is your thinking about the project? Whilst a preliminary grant may appear to support feasibility activity, in order to make an application you need a clear idea of what project you wish to develop. It helps if you can base the application around something you are already delivering or have clearly developed thinking. Ideally you will already have a business plan, but if not the support can be used to develop one.

  1. You don’t have to be Warren Buffett, but you should know a thing or two about investment

Have you done some preliminary research into social investment? You may find it helpful to have an initial conversation with a social lender, for example Charity Bank or CAF, to discuss the type of investments available. Typically social investment is conceived of as a repayable loan (hence the requirement for income generating ideas) but there are other options such as Community Shares, which may be an option for some organisations who want to embed strong beneficiary or wider community engagement.

  1. Your financial strength will be scrutinised

How are your organisation’s finances? Big Potential will require you to submit published accounts and current management accounts. The panel scrutinise these closely and may reject an application solely based on financial status if a plan for addressing this is this is not clearly articulated, including reference to your reserves policy. This is necessary and you can be sure that a potential future investor will be doing the same! Remember, the purpose of support is to undertake investment-readiness work, so the panel will anticipate risks potential lenders may perceive.

  1. Social Investors are looking for Social Impact, obviously.

Social impact, or clearly evidencing public benefit, can be addressed in a number of ways, and there is not a prescriptive formula for demonstrating that what you do works. The Big Potential application specifically references Big Society Capital Outcome Matrix so you may wish to align your impact with this. However if you already collect impact data or have a method that works well for you current funders, supporters or beneficiaries you can use this. The impact data is a way of telling a story, so as long as you do this clearly, the format can be one of your choosing.

Do you want to improve your organisation’s sustainability? Do you want to reduce dependency on grants and contracts? Do your service users or staff have an enterprising idea that you want to get off the ground or further develop? Is your board ambitious about growth?

If so, Big Potential Breakthrough may be for you. ACEVO Solutions is an Approved Provider and we welcome enquiries from ACEVO members about Big Potential. If you have an idea that you wish to develop further and feel you would benefit from some external support, let us know how we can help.

Mark Winter, Director of ACEVO Solutions

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