Den Sociale Kapitalfond

As I was getting ready for my visit to Denmark, I reached out to Den Sociale Kapitalfond, recommended to me by Kai Hockerts, professor at Copenhagen Business School. Maria Fester Petersen, program manager at Den Sociale Kapitalfond, invited me to stop by their bootcamp and see their social entrepreneurs at work. In between, I had a chance to talk to her and CEO and co-founder Lars Jannick Johansen.

The location was a thirty minute walk from Frederiksberg and for the first time in Copenhagen I came across some of the more diverse neighborhoods near the main train station. The bootcamp itself took place in a massive 2nd floor space in a conference center – and the space was much needed. As Maria explained, her team had spent the previous two weeks interviewing over 80 out of 100 startup teams and social entrepreneurs that had applied to join Den Sociale Kapitalfond. The day I visited, they had narrowed that selection down to 31: 10 teams that had applied to their Social Growth program, and 21 who wanted to join their Social StartUp program. The idea of the bootcamp was to support them in developing their business models and refine their concepts until pitch night the week after. At pitch night, the team would select four startups to join the Social StartUp program (early stage) and five for the Social Growth program (advanced: growth and post-revenue stage). Everywhere I looked I saw mentors and teams hunched over post-its or wildly articulating in front of their social business model canvases. This place had energy!

Den Sociale Kapitalfond - bootcamp

Den Sociale Kapitalfond – bootcamp

Lars Jannick Johansen founded Den Sociale Kapitalfond three years ago and told me: “At the beginning, it was just an idea I had. But the more I talked about it, I noticed that others had had the same idea. It came down to someone having to turn this idea into reality. Having spoken to so many people who shared my attitude, it suddenly seemed feasible. That someone was me.” Both programs today accelerate social enterprises that focus on employment generation for marginalized communities: people who are excluded from the labor market due to their physical, mental or social disability. With two cohorts per year until 2016, the Social Startup and Social Growth Program will support 20 and 32 social business respectively.

Social Startup Program: Turning concepts into viable business models

In each selection process, social enterprises who make it to the second round are invited to join a one-month long bootcamp. Bootcamp itself kicks off with a two-day workshop during which participants present their ventures. They receive training in prioritizing their areas of concern, developing a solid business model and designing their pitch. Throughout this first bootcamp month, they learn how to use the Social Business Model Canvas and apply the Lean Startup approach. At pitch night at the end of that first month, four to five teams are selected to join the five-months accelerator. Each team works with a dedicated business developer (from Den Sociale Kaptitalfond), receives training and mentoring through camps and labs, and benefits from the network that the team around Lars Johansen has built up: They match their startups with anyone from local government representative to lawyer or accountant to angel investor. Based on startups’ performance and need, Den Sociale Kapitalfond has the opportunity to invest (up to three million kroner/year) and will work with the most promising startups for another year after program end through mentoring and possible further investment.

Social Growth Program: Scaling established social enterprises

Working with advanced social enterprises (post-revenue and growth stage), also the Social Growth Program works with participants through a dedicated business developer, training labs and camps, as well as professional advice from mentors, funding and network access. In both programs, labs and camps take place three times each and support startup teams individually in developing their business skills, project management, their social model, marketing and operations. Inputs are provided by their business developers as well as external experts and mentors.

Bootcamp participants during an outdoor peer session

Bootcamp participants during an outdoor peer session

Social Enterprise Support in Denmark

I ask Lars where their applicants come from and he outlines:”The pool of usual social enterprise suspects is pretty small in Denmark, so we went beyond the impact space and started talking to small and medium sized companies. The term social enterprise met many blank faces, but once we started talking about local business that works consciously and responsibly, we found that many of the entrepreneurs were already or willing to live up to these standards.” And even this is starting to change, I noticed when we talked about emerging social enterprise trends in Denmark: “Over the last years, social enterprise has been put on the public agenda. Suddenly we have a National Center for Social Enterprise, legislators are developing a legal form suitable for social enterprise, we have more capacity-building organizations and investment funds such as our Social Capital fund. Things are shaping up.”

Den Sociale Kapitalfond and Social StartUp are funded by charitable donations and government tender funds the Social Growth Program.

One of the big questions – as for many support organizations – will emerge as the end of the funding cycle draws closer in 2016: How to fund an accelerator such as Den Sociale Kapitalfond? Taking equity may be one stream of income but the nature of their enterprises is not necessarily characterized by high growth (if we compare it with tech-oriented accelerators such as Bethnal Green). I think a hybrid financial model that includes philanthropic capital and government tenders is highly likely – and why not? Employment generation for disadvantaged unemployed takes a burden off municipalities and that is a service worth paying for.

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