AMSTERDAM, May 10 (Thomson Reuters Foundation) - Competition for funding among companies trying to do good by doing everything from harvesting rainwater to making prosthetic limbs can be fierce.
Taking part in international contests that reward the best business ideas with prize money is a way for social enterprises to raise funding without giving away equity.
Some of the largest contests include Facebook’s Social Entrepreneurship Award, the Global Social Venture Competition in Berkeley, Calif., and the Tata Social Enterprise Challenge in India.
“Going to fairs and events is time consuming and also very expensive, with participation fees and travel... especially if you are a small startup like us,” said Valentina Longobardo, co-founder of Vegea, an Italian social enterprise.
Vegea, which turns waste grape skins and pips from wine making into an alternative to leather, was one of a cohort of 20 social enterprises selected to take part in Chivas Ventures, a competition by global drinks company Pernod Ricard.
The 20 shortlisted social enterprises where flown out to a Chivas Ventures event at Europe’s largest tech summit, The Next Web Conference in Amsterdam on Thursday.
Five finalists, who were selected by a public vote, then pitched their businesses in front of an audience of 2,000 investors, entrepreneurs and tech enthusiasts at the glitzy event.
Xilinat, a Mexican social enterprise that uses agricultural waste to create a sugar alternative won the overall competition, scooping up the $50,000 prize, while the other competitors got a smaller share of the fund.
Among the judges was “Avengers” star Zoe Saldana, who told the Thomson Reuters Foundation she also found it very difficult to get funding for her business, Bese, which aims to tell stories of underrepresented groups in the United States.
Because Chivas Ventures covers the social entrepreneurs’ expenses, it was easier to take part in the competition, said Longobardo.
With more than 8,000 applicants to Chivas Ventures from around the world, it was fiercely competitive to win a place, said Michal Matus - whose Slovakian social enterprise, Save the Bees, sells technology to beekeepers so they can monitor their hives
“You are like a needle in the haystack,” he said about getting selected for such competitions, having been named one of the top 10 finalists at Chivas Ventures.
For Vulcan Augmetics, a Vietnamese social enterprise that makes affordable prosthetics to help amputees in poorer countries get back into the workforce, it is a challenge to raise funds domestically, said General Manager Trinh Khanh Ha.
Travelling overseas to attend such events helps, she said on the sidelines of the Chivas competition.
“It is little bit hard for us to get the message out that business can do good and be profitable at the same time in Vietnam,” she said.
Likewise, in Argentina, the amount of investment available for social enterprises is growing but still, “really small” said Nicolas Wertheimer, founder of Agua Segura, a social enterprise that collects and filters rain water for rural communities.
He took part in Chivas Ventures not only with a view to winning money and meeting investors, however.
Such events enable social impact businesses from around the world to learn and share ideas, he said.
“For us it is really important to get around and travel to North America and Europe, not only for fundraising and investment raising but also to see the new ways to be a social B-Corp and learn about new economies,” he said.
Plus, he enjoys it. "Fundraising for me is really fun, I love talking with investors," he said. (Reporting by Sarah Shearman @Shearmans. Editing by Jason Fields. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's and LGBT+ rights, human trafficking and slavery, property rights, social innovation, resilience and climate change. Visit news.trust.org to see more stories)