Social Venture Exchange Building Financial Market
Social Venture Exchange has a vision to effectively transition new financial capital to achieve improved social and environmental outcomes, and Adam Spence says there is great potential for this work to be successful in Canada.
Spence is chair and founder of the Toronto-based Social Venture Exchange, a project housed at Social Innovation Generation at MaRS. The project is working to develop and pilot an ethical financial market with a platform that will provide sustainable financing for social mission ventures.
“Our biggest hope would be that the social finance sector in Canada would realize its tremendous potential, and so our hope would be that we would galvanize interest and activity to attract new capital and generate positive social and environmental impact,” says Spence.
“We’re at a fork in the road or a tipping point whereby we can see a tremendous amount of activity that is newly generated and I think it really comes down to two things, one is new or additional capital in the sector and the second is demonstrable social or environmental impact,” he tells Axiom News.
Spence says they are looking at the new financial capital to ensure it is new or additional money coming into the space from either new players or existing investors who are increasing the amount they are contributing to social finance purposes.
He says it is not just about new money but the social or environmental impact. He says they will look for proven positive impact, such as increasing the number of people going into affordable housing or reducing the effects of climate change through the work of the social mission organizations.
“We know there is a growing demand in Europe and in Canada and around the world for people to invest their money in ethical and sustainable ways, and so if we could translate that into local opportunities for applying that capital we can have a huge impact,” Spence says.
In order to provide a structured, ethical financial marketplace for investors Spence notes they need to understand the supply of capital, the demand of capital and intermediation — how to flow the money from investors to social ventures. Social Venture Exchange is currently working on a feasibility study examining these three areas, which will be complete at the end of this month.
Social Venture Exchange intends to launch a pilot in January, with the goals over a 12-18 month period to attract financing for at least 10 social ventures, attract five or more institutional investors and to have a functioning, online platform where people can view the deal-flow activity and the proven social/environmental performance measures.
“We’ve seen the activity that is already underway in Canada, so what’s exciting is that we know that there is proof to the vision we are actually setting, and we also know there are ventures that are in need of capital and investors that want to apply their capital to this cause,” says Spence.
“The conditions and the circumstances are there for us to be successful, it will just matter how hard we work, whether we are up to the challenge. I think that’s exciting.”
Social Venture Exchange is funded by Social Innovation Generation @ MaRS, the Government of Ontario, Causeway Social Finance, and the TMX Group Inc.
To learn more about Social Venture Exchange, visit http://socialventureexchange.org/.
— More to Come
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This is a copy of an article that appeared on Axiom News: http://www.axiomnews.ca/gennews/1023