Social venture capital focuses on companies that are looking to provide real social change. It is a form of investment capital that is usually offered by an impact investor or a group of social venture capitalists. Social venture capital often backs companies that want to solve social and environmental issues, such as curbing climate change. The companies can aim to solve these problems either directly through their service or product, or by implementing certain programs in this area.
Social Venture Capital is a philanthropic form of investing because it aims to find companies with a strong social conscience. Although social venture capital focuses on investing in socially responsible companies, it still emphasizes returns. It is not simply provision of donations or a form of charity work. Social venture capitalists are interested in investment opportunities that have a healthy return on investment.
Social venture capital is mainly provided by specialist social venture capital firms and impact investors. Almost all major venture capital firms have special social venture capital funds that operate alongside traditional funds. Additionally, both local and international development banks can provide social venture capital.
There are many types of social venture capital investors. The common ones are social venture accelerators, social incubators and funds, non-profit oriented funding, and business angels.