Bethnal Green Ventures

On a very sunny morning in London (never take these for granted in London!) I strolled into along the Thames to meet with Bethnal Green Ventures hosted at Makerversity within Somerset House. I had come across BGV quite a bit over the last years and was surprised they have only been operational since 2012 (the predecessor – Social Innovation Camps – started in 2008). Paul Miller picked me up personally and after a labyrinth tour of Somerset house (up the stairs, round the corner, down the stairs, repeat, reverse.), we found ourselves in the basement overlooking the Thames. BGV works alongside with their startup founders and Alumni all sharing a large space full of desks, prototypes of fashion items next to yellow robotic parts spread out in the communal area.

'You don’t need much for your 1st social venture, that's what we designed the program for.' Click To Tweet

Bethnal Green Ventures started out as a hack-weekend that was geared towards developing technical solutions to societal challenges, called social innovation camps. More and more professionals participated who started wondering how they could turn these weekend-gigs into their career. “You don’t need a lot of things for your first social venture, so we designed a program to help in this situation.” Paul and his team started out in 2011 with no money. “Over half the teams we worked with in the first round were able to successfully raise investment. Then Nesta got interested in working with us because they wanted to build a pipeline for their investment fund in 2012.” It went from there.

Bethnal Green Ventures space within Somerset House

Bethnal Green Ventures space within Somerset House

In July 2012, the Cabinet Office launched the Social Incubator Fund with the objective to support ten social incubators in the UK to “strengthen the growing social investment market by providing startups with intensive support to enable them to take advantage of social investment opportunities so they better serve communities and people most in need.”1)https://www.gov.uk/government/news/10-million-social-incubator-fund-launches The Social Incubator Fund (Cabinet Office), together with Nesta and Nominettrust backed Bethnal Green Ventures for four years, and BGV ran with it. They received £1.8m investment to invest up to 80 early stage technology startups tackling social and environmental problems over the next four years2)http://www.nominettrust.org.uk/news-events/news/accelerator-tech-based-social-ventures-receives-cabinet-office-backing.

'We invest in teams at the beginning rather than giving out prize-money at the end.' says Paul Click To Tweet

BGV was the first accelerator for social entrepreneurs that I had come across. They run an intense three-months program designed for tech-based startups that meet the criteria of

  1. solving an important problem through
  2. an ingenious approach working in
  3. a strong team.

Participants receive 15,000 pounds as a living stipend and business investment for the months within the program. Paul explains “We believe in investing in teams at the beginning as a sign of our trust and belief in their business rather than treating it as some kind of prize-money at the end.”

Along with all the expertise they receive during regular workshops, office hours with the BGV team, and pitch practice, being part of BGV also means free office space for six months, legal support, free web-hosting, and Founder Confidential – a Wednesday lunchtime event with invited speakers. That the program works show Alumni such GoodGym, Fairphone and DrDoctor.

Demo Day on 17 September, 2015

Demo Day on 17 September, 2015

I got the impression that the social mission was intrinsic to BGV’s ventures, yet not the label of their entrepreneurs who are first and foremost tech-savvy entrepreneurs. When I asked Paul about the unique features of BGV’s program I was surprised to hear him say:”The entrepreneurs we work with are very comfortable doing it for a social purpose.” It was here that I understood their distinctiveness not to the social but the tech startup world: “BGV entrepreneurs don’t have to hide their social purpose when developing an app or some tech-based service. They understand money as a means to an end compared to a straight-forward tech program.” Amen.

'We look for ventures that go through the roof. There is little room to worry about the risk.' Click To Tweet

Investment such as from the  Social Incubator Fund is a great starting point to design an impact accelerator model. Taking equity in return for the up-front investment is one promising approach to becoming financially sustainable as a support organization. But then, why don’t more support organizations do it? I assume equity is less attractive in ventures that do not primarily – or at all – pursue profits. I would imagine it to be a more attractive option for startups with better (economic) growth potential, such as in the tech industry. Paul adds “We can’t invest by trying to limit our downside risk, we have to look at the possibilities. We look for ventures with great potential to go through the roof. There is little room to worry about the risk.”

I personally am a great fan of Bethnal Green Ventures and I love seeing support organizations like them operating on a financially sound basis. The coming years will have to show whether this model will sustain itself and if it is replicable in countries with less government support.

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References   [ + ]

1. https://www.gov.uk/government/news/10-million-social-incubator-fund-launches
2. http://www.nominettrust.org.uk/news-events/news/accelerator-tech-based-social-ventures-receives-cabinet-office-backing

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