Newscenter
The Wall Street Journal recently featured VisionSpring in an article about the unique challenges that social enterpreneurs face when looking to fund new ventures. Originally published on smSmallBiz.com, the article is part of a weekly column by Diana Ransom entitled "Starting Up," which follows entrepreneurs through the early stages of launching a business. In "Starting Up: Funding Your Social Venture," the author points to VisionSpring's prospectus as an innovative funding model that is mimicking equity-like structures, much like a traditional business, but with social rather than financial returns.
Article excerpt:
"Many social ventures - even the ones that eventually become self-sustaining - may never yield enough of a financial return to attract traditional backers or investors. As a result, a social entrepreneur's task of raising financing poses unique challenges.
For one thing, social ventures are often structured as nonprofits, which means they can't offer an ownership stake in exchange for capital, like a traditional business might. After all, "a nonprofit doesn't have equity," says Rick Aubry, a social entrepreneurship professor at Stanford University's Graduate School of Business. However, some social enterprises are mimicking equity-like structures to work around the ownership issue, he says.
That's what Scojo Foundation intends to do. Since 2001, the New York nonprofit has sought to reduce poverty through the sale of affordable reading glasses in poor communities. Today, Scojo is changing its name to VisionSpring and - much like a company going public might do - releasing a prospectus to attract philanthropic investors.
According to the prospectus, VisionSpring wants to raise $5 million by the end of the year to deliver almost 650,000 pairs of glasses to people in Asia, Latin America and Africa. The company also plans to train more than 5,000 village-based entrepreneurs on the sale of those glasses. Similar to a Wall Street prospectus, the document outlines risk factors, from currency fluctuations to natural disasters. Investors will receive quarterly reports. But unlike a traditional offering, VisionSpring's investors are only promised a "social" return on investment rather than lucrative financial returns.
VisionSpring co-founder Jordan Kassalow, a practicing optometrist, says the prospectus was borne out of frustration. He decided "enough is enough" after watching "everyone work so hard cobbling together funding throughout the year, rather than doing what we should be doing (helping disadvantaged individuals see better)." The company worked with the Nonprofit Finance Fund, a community development financial institution that helps nonprofits secure funding, on the prospectus."
Read more at WSJ.com.
