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Interview: SOCAP’s Kevin Jones on trends to look for in 2011

   /   Jan 26th, 2011Business, Finance, Interviews

The Beurs van Berlage in Amsterdam, site of the first SOCAP, Europe

Kevin Jones is perhaps best known as one of the fathers of SOCAP, a series of annual events dedicated to the flow of capital to social enterprises. SOCAP 2010, which took place last fall, saw the largest gathering yet of people and organizations working at the intersection of money and meaning. Jones’ expertise on the trends taking place in the social capital markets extends to his position as the founder of Good Capital, a venture capital firm that invests in social enterprises. As Jones and team look forward and prepare for the first SOCAP/Europe event in Amsterdam in late May, Jones talked to Dowser about a more unified and international community of social entrepreneurs and investors in the coming year.

Dowser: You’ve been working with social capitalists for a long time. What kinds of trends are emerging that are new and different for the field of social entrepreneurship?
Jones: Impact investing in social enterprise is a term that is emerging at both ends of the spectrum. It has become legitimized as an asset class in which institutional investors and large wealth managers are now taking this sector seriously and saying we should be moving some of our money. The investing is also emerging on the bottom end, where you have all kinds of opportunities for everyday individuals to invest in social enterprise start-ups. For example, I think Microplace is doing some interesting things where you can invest in a project for $25 dollars that is helping to lift people out of poverty in developing countries. Social entrepreneurs are getting around the traditional investors and when everyday people are involved, it becomes more of a movement.

Because there’s new money in the room, several things happen. The intermediaries get better and metric testing gets better because there’s a need for independent analysis. The quality of the entrepreneurs also gets better. We saw the same thing happen with clean tech. People who started out in traditional technology went into clean tech. We’re getting some of the best entrepreneurs in this space that we wouldn’t have seen two or three years ago.

Can you talk a little bit more about innovative funding models for social enterprises?
We’re launching a seed fund, which is a partnership with Hub-Bay Area and First Light Ventures, and it’s going to be a pretty innovative model because entrepreneurs are going to be able to decide who gets the money, which adds due diligence to the equation. We’re seeing in a lot of other places a new resurgence of seed funding, and a move away from the older funding style that places like Ashoka utilize. I think in the coming year, funding will have a better pipeline. The whole food chain of funds for social enterprises – everything from friends and family to seed and angel funding is only going to become more clear and more available to social entrepreneurs.

What do you think was the most successful part of SOCAP last year?
The most successful part was that we attracted 1,460 people from 60 countries. We got the nonprofit and for-profit camps talking in the same room about the same issues. I think these groups are still learning to understand each other; they speak different languages, but when you’re working in the same village in Africa and don’t really know each other and don’t know how to partner, that needs to change. But I can see the divide between for-profit enterprises and nonprofits becoming smaller. There is a breaking down of some of those walls, and the fact that all different types of socially-minded people are learning to work together more has definitely been one of our biggest successes with SOCAP.

Which people or organizations are you watching in 2011?
Like anybody, I’m curious to see what The Unreasonable Institute will come up with next. Then there’s this bigger trend of baby boomers signing up to help the millennial generation in their social endeavors. The boomers are seeing that a lot of the leading in this sector is being done by the 20-somethings, and they are primarily the ones that are giving them funding. One of the new challenges for this sector is how to link in the Generation X-ers who have 10 to 15 years of real expertise in their fields. A lot of them are stuck at jobs they aren’t satisfied with but they don’t know how to engage in this work. We need to figure out how to tap into that talent from Gen X because it takes more than the enthusiasm of the Millennials; you have to have the practical expertise of people in mid-career too.

You mentioned you had SOCAP attendees from 60 countries last year. What are some of the developments taking place internationally within the social entrepreneurship community?
We are holding the first SOCAP Europe, which will take place in Amsterdam at the Beurs van Berlage in May. The building we’ve chosen for the event is symbolic – we’re going back to the birth of the capital markets, and we’re going to look back and think about how, if we had the chance to create the market over again knowing what we know now, how would capitalism be different? We are working deeply with our European partner, PYMWYMIC, a company that has done impact investing for about 17 years already, longer than most. This event isn’t going to be a giant American transplant going into Europe, but instead looking at collaboration on an international scale. More than 100 attendees out of 1,400 at SOCAP last year were from Europe.

I think there’s an amazing opportunity to build a very strong network between the entrepreneurs and the companies in this space in Europe because it’s smaller geographically speaking. We want to highlight a lot of the European players that have been doing this work for a long time, but kind of under the radar and not known outside their own network. There are amazing innovative veterans of social capitalism that don’t get a lot of attention but are quietly doing some of the best work in the world.

Interview has been edited and condensed.

Photo: Courtesy of SOCAP

3 Responses

  1. Geri Stengel says:

    I think one of the most important milestones this past year, in addition to SoCap itself, was the announcement by JPMorgan Chase that impact investing should become an asset class. That is a big step toward attracting private investors to values-driven businesses.

  2. marwan taj --s,f ca ,usa says:

    I think > Jones and team are doing some of the best work in the world. and for that I thank them.

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