Abstract

In order to be self-supporting or profitable, SEOs use a wider variety of available financial instruments in innovative finance. Results from the descriptive survey showed that out of twelve possibilities in innovative finance, respondents use mostly donations (68%), grants (54%) and stokvel (a savings pool) (39%), with an awareness of the other possibilities ranging between 20% and 0%. Other possibilities include crowdfunding, microfinance, and products in the innovative finance category such as angel investment, patient capital, venture capital, mezzanine finance and credit schemes, used according to five different growth stages of the SEOs’ development.

SEOs collaborate synergistically in discovering and using alternative financial instruments to scale and become financially independent as middle tier of a three-tiered fountain. SEOs use their unique characteristic of generating spillovers to compensate for the fragmented base tier through authentic relationship-building and generating knowledge where needed, to facilitate growth.

Once the SEO’s legal structure is in place, access to funding is one of the SEOs’ primary concerns. The socio-entrepreneurial ecosystem enables solution orientated actions and important communication networks. These relationships are important in terms of access to funding and access to markets (Interviewee D, 2021). These opportunities and challenges in Alternative financial Instruments are illustrated in Figure 51 on page 201.

SEOs seek solutions for poor marketing and the green space gap. Projects should address the lack of transparency in terms of banks being used as wholesale tools to disperse money and address the lack of tax initiatives in creating incentives to invest in start-ups. SEOs design their business models in such a way that they re-invest their profit into their ventures to avoid grant-dependency, enabling them to be self-supportive and eventually profitable (Interviewee I).