The document proposes a Social Good Ecosystem Incubator model to support pre-proof of concept social ventures. It suggests structuring the incubator as an ecosystem where established organizations help offset costs for early-stage ventures. A technology layer across projects would provide visibility and collaboration. A Social Good Ecosystem Pooled Fund would provide cash for projects through structures like bonds that guarantee investor principal while funding the incubator ecosystem. The model aims to proliferate social entrepreneurship by supporting many small ventures rather than just one large venture.

1. Social Good Ecosystem
Incubator
Supporting Pre-Proof of
Concept Social Ventures by
Rethinking the Resource
Allocation Paradigm

2. What Is The Opportunity?
 Develop a prototype for a solution that
will solve a systemic problem!... To
totally change the game… to make a
difference at a global level…
 Ramp up capacity for the movement for
change in our local area

3. The Paradigm Shift
1. Systemic View of Resource
Allocation… from funding one project
at a time to funding one ecosystem
at a time!
2. Combining two resource allocation
concepts into one
Early stage seed funding… cash
Incubators… in-kind
Different
forms of
value

4. What We Will Cover
 Social Finance concepts and articulation of the
systemic problem
 Present concept for prototype of the Social
Good Ecosystem Incubator
 Present initial sketch of Social Good
Ecosystem Pooled Fund
 Scalability: how we can make the model go
viral!

5. What is a Social Venture?
There are many definitions. I am offering the
following…
‘Projects, the objective of which is to bring
about positive social change’
Note that, there is no reference to said projects
necessarily having to make money in this
definition

6. Why this definition?
I will start with the following assumptions…
 The world needs fixing
 We need more social innovators
 We must provide social innovators maximum
flexibility to innovate
Hence, we cannot allow the requirement to
make money to be a constraint on the
development of innovative models.

7. First... A rough picture of the current
Funding landscape
returns
NOTHING!!
Charities/
Not For
Profits
For Profit
Companies
-100% rate of
return
Traditional
market rate
NOTHING!!
Socially
Motivated
Financially
Motivated
NOTHING!!

8. So what is needed is...
Charities/
Not For
Profits
For Profit
Companies
-100% rate of
return
Traditional
market rate
returns
Social
Ventures
-for profit
-not for profit
Socially
Motivated
Financially
Motivated
Social Investors
looking for Social
AND Financial
Returns
Socially and
Financially
Motivated

9. What is the Problem Being
Solved?
 Lack of resources (cash and in-kind) for
pre-proof of concept social innovators…
which is a systemic problem
… why is this a systemic problem?

10. The Systemic Problem
 Seed stage social innovation projects (as
defined) carry very high risk and very
little financial return potential (by
definition)
 This is to be contrasted with financial
innovation which behaves like…

11. ‘Financial Driven’ Angel
Investments… return distributions
Socially motivated
investments don’t
have this return
potential
Seed stage Social
investments have
high risk and
moderate return
potential
All seed stage projects are risky but
some that are profit motivated do really
well!... This compensates for all those
that do poorly…

12. Guess where the bottleneck is?
Pre Proof of Concept
Proof of Concept
Mid Stage
Late
Stage
No $
Small $
Volume of Ventures
Some $
Huge $!Enterprise
Centric Model

13. Where is the money going?
High Financial Return/Low
Social Return
- traditional investments…
served by existing capital
markets infrastructure
High Financial/High Social
Return
- traditional ‘social ventures’…
served by current social
financiers… at least to some
extent
Low Financial Return/Low
Social Return
- badly designed projects…
deserve no external capital
Low Financial Return/High
Social Return
-No financial support from
social investors!

14. Taking a System Approach…
from One To MANY!

15. Traditional Funding Mindset…
scale one project
Scalability: support the one project that has the
highest probability of doing extraordinarily well.
Problem…
 Ignores 9/10 projects
 Reinforces survival of the fittest
Underlying Perspective
 Competition versus cooperation

16. Social Change and Cultural Change…
proliferating social entrepreneurship
The Problem with the One Project Scalability model…
Is it better to fund 1 * $200,000 into a great project that
will scale… or 10 * $20,000 into smaller unproven
projects?
Not clear from a financial perspective
A definite NO from a cultural change perspective

17. The Cultural Mix
Is it better to have?...
Highly
Scalable Projects
Moderately
Scalable Projects
From the perspective of the
system... The world!... How do
we scale the entire system?

18. How Can We Solve the Problem
of Lack of Resources?
In principle there are three ways
1. Convince social innovators to focus on making
money
2. Convince investors to assume reduced financial
return
3. Structure transactions to mitigate financial risk
4. Structure the relationship between projects
(and the community) to flow non-financial value
to the project … think in terms of ecosystems…
and provide resources to the entire system

19. What is an Incubator?
 Co-location space
 Provide support services…
• Infrastructure
• Advisory
 Connect projects to mentoring support
 For profit: equity stake in projects

20. What is a Social Good
Incubator?
 Internal Ecosystem located in a Co-
location space
 Provide in-kind support services…
• Infrastructure
• Advisory
 Connect projects to mentoring support
 Offsets financial cost

21. How Can An Incubator Mitigate
Financial Risk?
What is the primary financial obligation for
projects situated in an incubator?...
Lease payments (and other costs of
being in incubator)
So, the question is…

22. How Can You Reduce the Burden of
Lease Payments for Seed Projects?

23. View the Incubator As An
Ecosystem!
Hmm… what does this mean?

24. Distribution of Lease Payments
(costs)… sufficient in
aggregate
Organization Type Lease Payment Capacity
For Profit Service Profit Service
Providers
Strong cash flow… and ability
to cover lease payments
Established Social Business
Service Providers
Reasonable cash flow… and
ability to cover lease payments
Early Stage (post proof of
concept) Service providers
Some cash flow… can manage
reduced lease payments
Pre Proof of Concept Service
Providers
No cash flow… no ability to
cover lease payments

25. Hypothetical Project Mix
SERVICE
TYPE
For Profit Social
Venture
Not-for-
Profit
Technology Technology
infrastructure/web
development
Strategy Business/strategic
planning
Media Film, video,
content
development
Crowdfunding Anti Pipeline
Activists

26. Why would sustainable organizations ‘cover’
lease payments for early stage projects?
 Be a good community citizen
 Provide in-kind support for social
enterprises
 Receive in kind-support from other
organizations in ‘ecosystem’
 Receive financing from Ecosystem
Pooled Fund

27. Hypothetical Financial Model
REVENUE
For Profit $9,000
Social Venture (cash positive) $1,000
Not-for-Profit $300
COSTS
Lease $10,000
Internet $100
Insurance $200

28. But Projects Need More Than
Their Costs Being Reduced…
So extend the ecosystem beyond the
boundaries of the Social Good
Incubator…
… and build a Value Exchange mechanism
within the ecosystem… a Social Good
Currency

29. Social Change Ecosystem
SOCIAL GOOD
INCUBATOR
Social Change
Ecosystem

30. Ecosystems
Some technology/ open
architecture concepts

31. What is an Ecosystem?
“An ecosystem is a
community of living
organisms…”
“…ecosystems are
defined by the
network of
interactions among
organisms, and
between organisms
and their
environment…”
“While the resource
inputs are generally
controlled by external
processes like climate
and parent material, the
availability of these
resources within the
ecosystem is controlled
by internal factors…”

32. Why Ecosystems Now?... The
connectivity network
Internet connectivity penetration rates are increasing
Bandwith limitations are being reduced
The cost of communication is dropping (thank you Skype!)
Interoperability protocols, applications etc. are evolving
Social networking platforms (Facebook...) are changing the culture of
communication
Processing power is being pushed to the edge of the network (Smartphones etc.)
The real time infrastructure is evolving (Twitter)
We are connected like at
no other time in history!

33. The Collaborative Context
Information flows freely across organizational boundaries
Geographic constraints are less meaningful
Structural limitations on information management don’t constrain participation
(thousands of people can work on projects!)
Meetings can be run virtually
Projects can be managed asynchronously
Projects can be scaled to involve many people with minimal incremental cost
Your communications infrastructure can be scaled to include many people with
minimal incremental cost
Collaboration makes
sense!

34. Build a Technology Layer Across the
Ecosystem of Projects
Social Change
Ecosystem
SGEI
Why?

35. Emergence, Presence, Visibility and
the Fluidity of Early Stage Projects
Early stage projects are…
 Basically concepts…
 … residing in the head of one or two people
 … lacking in resources
 … lacking moral support
 … they can go in many directions
 … depending on people… money… opportunity…
If only we, as social entrepreneurs, had a sense of the
bigger picture (the Ecosystem)… and others that
were working on similar things!
Build a shared virtual
space!

36. Systemic Visibility… an example

37. Systemic Visibility… an example
Early stage projects
are fluid… what if we could
see what others were doing
and where they wanted to go?

38. Governance and
Scalability

39. OK… but how does this model
scale?
What do we mean by scale?... Remember
the goal is to proliferate the world with
more social entrepreneurs!
To Scale we need to…
1. Ramp up the number of federated
Social Good Incubators
2. Ramp up Ecosystem Pooled Fund

40. What about Governance?...
Cooperative
Operate as a cooperative
 Democratically governed
 One vote per member organization
 Membership classes can be defined,
however if necessary

41. A Few Principles and Processes
To Drive Scalability of Model
 Develop and document Prototype
 Develop Open Source platform to
disseminate prototype
 Develop Federated Open Collaboration
Platform to connaect incubators
 Develop an emotionally compelling story
 Utilize video
 Utilize social media channels

42. Federating the Social Good
Incubators with Open Architecture
SG Incubator
SG Incubator SG Incubator
SG Incubator
SG Incubator
Open Source Best Practice Repository
and Communication System
(Embrace P2P/Sharing
Economy Principles)
SG Incubator

43. In Principle an ‘incubator’ is just an
ecosystem with a physical footprint
SG Incubator 1
SG ‘Incubator’ Ecovillage 2
Social Housing
Complex
Ecovillage 1
Open Source Best Practice Repository
and Communication System
(Embrace P2P/Sharing
Economy Principles)
SG ‘Incubator’

44. The Social Good
Ecosystem Pooled Fund
Developing Ecosystem
Focused Funding
Structures

45. But Projects Need Real Hard
Cash As Well!... Introducing the
Ecosystem Pooled Fund Capital
Distribution Models!

46. The Paradigm Shift
Construct the funding structures in a
manner that is targeted at the unique
features of the SGI Model, in
particular…
1. The SGI is based in a physical location
2. The SGI provides capital to high risk
projects

47. Traditional Pooled Financial
Capital Distribution Models
Manager
Company Company Company Company Company
Financial Capital Pool
Investor Investor Investor Investor

48. Ecosystem Pooled Fund Capital
Distribution Models
Project Project Project Project Project
Social Good Ecosystem Pooled Fund
Investor Investor Investor Investor
Cooperative
Crowdfunded Creative
Structures Targeted at
Financing Ecosystem
Social Good Ecosystem
Incubator

49. Zero Coupon Principle Guaranteed
Social Good Bond… an example
 Raise $1,000,000 via Social Good Bond
 Invest $930,700 in a 5 year zero coupon
bond guaranteeing investors their principle
back
 Invest $69,300 in ….. A project… a pool
that can invest in other projects…

50. Traditional Bond Payments

51. Ecosystem Pooled Fund
$1,000,000 – Principle Guaranteed!
Ecosystem of Projects
Investor Investor Investor Investor Investor
Fund Entire
Ecosystem
Governed As A Cooperative
Targeted
at High Net
Worth
Individuals
… that are
socially
conscious
Targets Another Problem: how do we unlock private sector capital?