Course Catalog

Fall 2009

B9455-017: Financing Social Ventures: Risk Capital for Expansion

W - B Term, 02:15PM to 05:30PM

Instructor: rick larson

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This course is designed for MBA students who plan to (a) be social entrepreneurs and seek to understand the forms of risk capital available to grow their ventures “to scale”; b) work in financial services and want to be familiar with social venture risk capital structures; or (c) support social ventures at some point in their career by serving as board members, financial supporters, advisors, and investors. Students with venture capital experience are welcome but may find some material repetitive.

Conventional growth companies focused on a single bottom line have access to a range of equity and debt capital at every stage of their development. However, social ventures, which seek self-sustaining revenue through income-generating activities while simultaneously achieving social or environmental benefits, have a harder time finding risk capital to expand. For-profit social ventures find that traditional investors are wary of any objective that might reduce the potential profitability of a firm. Non-profit social ventures, which are unable to access traditional equity markets, struggle to strike the right balance among philanthropic revenue (grants and donations), debt, and earned income.

Financing Social Ventures explores how social entrepreneurs who need capital to expand their enterprises -- and their board members, funders, and advisors -- are adapting traditional forms of financing to create hybrids that support both growth and mission. The course will begin with an examination of debt and equity structures available to social ventures (both non-profit and for-profit). Students will then apply these concepts in a series of cases on domestic and international social ventures that need risk capital to grow.  By the end of the class every student will understand the existing capital opportunities for non-profit and for-profit social ventures and have an appreciation for the “state of the art” through class assignments, readings, and contact with both entrepreneurs and financiers.

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Rick Larson

Rick Larson

Adjunct Associate Professor

Rick Larson is Director of Sustainable Ventures for The Conservation Fund (TCF), a national nonprofit organization with a unique dual mission of land & water conservation and economic development. Based in Chapel Hill, North Carolina, Mr. Larson serves as NC Program Director of Natural Capital Investment Fund, a TCF affiliate that provides subordinated debt and equity to companies that promote and practice the sustainable use of natural resources. He also is assisting TCF with the development of investment vehicles for forestry-based carbon sequestration.

Prior to joining TCF, Mr. Larson was Managing Director for SJF Ventures, LP, a $45 million mission-driven venture capital fund with offices in Durham, NC and New York, NY. A member of the Fund's Investment Committee, he sourced, conducted due diligence on, and structured equity and subordinated debt investments in SJF portfolio companies. He served on the Board of Directors of Ryla Teleservices, Inc. and B.B. Hobbs, Inc. and as liaison to other portfolio companies. His other professional experience includes twelve years as Executive Director of REAL Enterprises, a non-profit social venture that provides entrepreneurship curriculum, training and support to secondary and post-secondary instructors nationwide. He also worked in financial and shop floor supervisory positions in manufacturing for the Cummins Engine Company.

Rick is a director of TransFair USA, the certifier of Fair Trade products in the US. He has served as an evaluator and judge for numerous social venture competitions, including the Yale SOM-Goldman Sachs Foundation Partnership on Nonprofit Ventures and the Duke Fuqua School of Business Start-Up Challenge Social Entrepreneurship Track. He is a graduate of the NASBIC Venture Capital Institute and holds a B.A. from Amherst College and an MBA from the Yale School of Management.

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