Fostering social business through venture philanthropy: the role of financing in the process of new social business creation

After reframing the content of contemporary understanding of Social Business (SB) and the process of new SB creation, we link them with Venture Philanthropy (VP): a high-risk financial capital provision, combined with technical and managerial expertise transfer, which offer the potential for financial returns, as well as contributing to fostering social change through entrepreneurship. The paper delves into this industry, revealing its characteristics, models, processes and mechanisms. It relies on the assumption that SBs differ in the ways they pursue social innovation and social change. We suggest that the basic ingredients across which SBs vary can be grouped into two main groups: the ‘organisational set’ – composed of three dimensions: a cause-driven vision, a scalable innovation and economic robustness; and the ‘environmental set’ – concerned with those features that affect an SB’s success but that are hardly controllable by organisations directly. VP is included in this set in that it affects SBs’ growth capacity.