financing and structures

Nineteenth century sociologist and economist Max Weber's "ideal" concept of capitalism is the amassing of more and more capital for its own sake, as a self-righteous endeavour. This is a positive reinforcing loop whereby the more capital one has, the more power and influence and consequently the greater success in amassing more capital.

Philanthropy, on the other hand, is “the love of humankind.” Get Well UK started with a social loan from philanthropist Polly McLean. Polly’s views on the redistribution of wealth are refreshing. She bases her ideas on social change rather than charity and was a co-founder of The Funding Network. Radical young philanthropists like Polly have been involved with Resource Generation in the US - an organisation which aims to challenge the fundamental basis of capitalism as a working model for a humane and just society. The mission statement of the Funding Network is: "Giving for a change - individuals joining together to fund projects that work towards a fairer, healthier and more sustainable society."

Get Well UK started with a £60,000 input, for which we made budgets that we adhered to closely. Polly Lawrence stopped working with me after about a month, so the money saved by not paying her helped to keep the company going for longer. The money was spent on development whilst some major fundraising was undertaken.

We started off imagining that the best way to provide this service was through a regular company. Various fundraising for business workshops taught us the ways for businesses to raise up to £1m (which I think are best summarised in this great leaflet). We tried to become corporate and met with individuals, business angels, and venture capital companies and also presented at the Enterprise 100 Club.We filled in application forms, met fund managers and boards, wrote cold letters and basically did everything that the capitalist system requires for people without money to get money. It is a tired cliché that some great businesses wouldn’t happen without tenacity, determination, and the ability to handle endless rejection from bank managers and other people who hold money. I agree.

We explored EthEx, an ethical exchange operated by Triodos bank, where ethical companies can trade their shares. Entering this exchange in a few years was our objective, with regard to an exit for investors.

One venture capitalist company who rejected us suggested that we contact a corporate financier and gave us some names, including Oliver Woolley from Envestors. They have the most helpful website I have seen in regard to raising money for new businesses. We were fortunate to be able to get the last place on a DTI scheme, which paid the majority of a consultancy fee for Envestors to help us with the next stage of fundraising. So for £500 (from us, I think the DTI might have paid quite a lot more…) we had an excellent appraisal of our business plan and fundraising to date. We pretty much started the financials again and felt that we were in a strong position to reapply to some of the companies who had rejected us previously (after all, we had addressed their concerns etc).

It was after we were rejected by the London Fund Managers, because we hadn’t tried out our model, and we could not (near as damn it) guarantee that we would turn a profit for them, that I had a major realisation or two…

• When creating a new enterprise, you do not have to conform to old models that you don’t like, which promote inequity (especially if this is against the values of the enterprise you are setting up)
• Capitalism is a process which makes rich people richer. It will not benefit the poor.
• The focus of the business has to be income generation if you have agreed financial targets with investors. The focus of our business is already quite large, consuming and challenging the changing of the landscape of healthcare in the UK.
• I have the power to make this a good business and to try out tools and methods for social change, so upholding capitalism is not the way forward
• Getting rich on the back of other people’s hard work, without them sharing in the wealth, just cannot be a good idea

At the same time Alex realised that social enterprise was the way forward. This was confirmed when I was a finalist in the Upstart Awards - Young Social Entrepreneur of the year (link to). If my skills for social enterprise were being recognised then what was I thinking of trying to mould myself into a world which I neither like, nor am inspired by, nor feel comfortable in? And so it was decided.

Raising Social Enterprise Money

Our plan for the coming year is to borrow £100k, raise grants of £205,000 and get contracts worth a total of £300,000. In 2005/6, our plan is to receive £260,000 from grants and £850,000 from contracts. In both years, we forecast that the company will report a small surplus.

So after thinking I was no longer a fundraiser for a not-for-profit, I found out that I was wrong. We now have a clear plan of who to approach, and are working with the fantastic Bates, Wells and Braithwaite in rewriting our constitution so that our legal structure reflects our aims and ambitions. This will be easier if a new legal structure comes into being - a Community Interest Company - which we hope to adopt after wide consultation with the communities we serve and are part of.

We appointed our auditors, somewhat prematurely, at Buzzacott, because I had such a fantastic experience with Amanda Francis in their charity division whilst I was the company secretary of a London-based charity 10 years ago. We will work with Buzzacott at the end of our first year to review all of our financial processes so that we can build the company from a strong systematic base. In the meantime, Pat Lavery is our accountant and has done a great job in pulling together our accounts which you can read here.

Back to the Introduction of the 2003 Annual Review