I have expressed the view previously the next great wave of entrepreneurship will come from social entrepreneurs. I found evidence the rise of social entrepreneurship is on the horizon in an article I found in this week’s Bloomberg Businessweek. The article is about a firm headed by Chamath Palihapitiya called Social+Capital Fund. Palihapitiya is a former Facebook executive, who left about a year ago to launch the new venture capital firm (Bennett, 2012).
Palihapitiya believes properly placed venture capital can solve the world’s biggest problems left from gaps caused by the shrinking scientific ambitions of government, foundations, and other global organizations (Bennett, 2012). Politicians demonize government handling of social problems leaving social entrepreneurs as the suitable outlet for dealing with these problems. Universities have dwindling funds devoted to research and can no longer deal with social problems. Bennett explained how Kauffman Foundation, an independent organization, has failed to produce results in dealing with issues it funded over the last 20 years. Palihapitiya believes private equity or as he puts it “purpose-driven money” is the answer to solving such problems (Bennett, 2012).
Social+Capital has amassed an army of technologists and entrepreneurs to find and build products aligned with solving problems in the health care, education, and the financial services industry. These people include Reid Hoffman (LinkedIn), Sean Parker (Napster and Facebook), Kevin Rose (Digg), and Joe Hewitt (Mozilla and Facebook). Several companies funded by Social+Capital have already started to deal with social problems in these industries. The idea is for these companies to make money while solving societal problems. Palihapitiya’s idea is to find brilliant people of the Steve Jobs variety and invest in them to develop solutions to societal problems (Bennett, 2012).
Palihapitiya admitted inequities in the global economic system precipitated his idea to find brilliant leaders to solve societal problems by making money (Bennett, 2012). Between 1987 and 1997 nonprofit organizations grew to 1.2 million or by 31% (The new nonprofit almanac & desk reference., 2002; Noruzi, Westover, & Rahimi, 2010). These numbers show a growing need exists for social entrepreneurs to solve societal problems. Palihapitiya has started his firm to fund innovation solutions and allow entrepreneurs to make money, while solving such problems.
Social entrepreneurs will play a major role in the global economy. Innovative solutions from social entrepreneurs will create great value by addressing societal needs. I encourage prospective entrepreneurs to start now to take advantage of this opportunity. We can help you get started and I encourage you to learn more.
Bennett, D. (2012, July 30 – August 5). The league of extraordinarily rich gentlemen. Bloomberg Businessweek, 54-56.
The new nonprofit almanac & desk reference. (2002). San Francisco: Jossey-Bass.
Noruzi, M. R., Westover, J. H., & Rahimi, G. R. (2010). An exploration of social entrepreneurship in the entrepreneurship era. Asian Social Science, 6(6), 3-10. doi: 2233824571; 56997641; 137930; SSCS; INNNSSCS0000567695