One of the biggest challenges for social enterprise incubators is funding. Unlike more transparent and easy to understand business like manufacturing, companies and venture capital firms don’t understand how to value social impact and therefore don’t know how to justify how much to give. Traditional manufacturing companies use a % of expenditure model to figure out how much money they need, but of course this can’t be applied in the same way to social enterprise start-ups. Such a challenge remains a bottle neck in really promoting social or non-profit organizations.
In some sense, China is undergoing the same path South Korea is. Now experiencing a period of unprecedented economic growth, many poor and marginalized people on the sidelines are being forgotten. China can learn from South Korea’s experience and balance economic growth with sustainable and equitable social welfare. More emphasis should be put on social entrepreneurship rather than start-ups that can simply raise a lot of VC funding and have a big exit.
