What are boards, investors and management teams to do when there is tension between the financial and social bottom lines of social enterprises? Social Capital Partners shares learnings gleaned from seven years of investing in employment-based social enterprises. We identify the five most important factors that determine whether a social enterprise will be profitable or require some form of subsidy.
Simply put, our advice is to do everything possible to choose businesses that are not overly complex to operate and to build management teams that have the inherent business capacity to operate them effectively.
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