One of the main decisions to make when setting up a venture philanthropy or social investment (VP/SI) fund is how to structure its governance. Who should sit on the Board of the VP/SI organisation and how should they be involved? How to attract and manage the right funders? Who should make the investment decisions? How does governance evolve when new funders and investors come on board? This roundup summarises the lessons learnt of a group of experienced CEOs of EVPA members.
One of the main recommendations is that, when different shareholders are involved, it is crucial that all of them align behind the social mission and objective of a business and a set of indicators. If such provisions are part of a shareholder agreement and become a legal document, transparency is ensured, and the relationship can work.
For example, when new private investors come on board, it is important to make sure that:
- They understand the functioning and the value of the VP approach;
- Their needs are understood and their expectations are managed;
- An impact measurement system is in place to show them the results in terms of social impact achieved;
- The risk they are taking with their investment is well explained to them.
For more details and considerations to take into account when institutional investors come on board, download our 2-page Expert Roundup below.