Lack of Stamina?

This week we learn 3 types of social enterprises from “Creating Successful Business Models”, and I am more interested in social business ventures.

In the handout, what distinguishes social business ventures from leveraged nonprofit ventures and hybrid nonprofit ventures is that social business ventures are set up as for-profit businesses from the outset, though they tend to think about the question of what to do with any profits very differently than mainstream businesses. Also, the handout talked about the downside of this model: replication. The reason why only a few social businesses managed to replicate and scale, in my opinion, is these businesses that the venture invested has to be profitable to survive. I found an interesting report released by Ernst & Young:

http://green.blogs.nytimes.com/2010/02/12/for-venture-capital-efficiency-is-in-vogue/

In the report, Investors shifted their money from capital intensive solar and biofuel companies into firms that use technology to reduce or monitor energy use, when facing the pressure from recession. Instead of searching high return profit, Venture capitals start to look more into energy efficiency companies because the funding requirements are lower and the returns are often faster.

The sad side from the report is that a well functioned enterprise with a prospective product or idea for the public good could have been killed simply because the investor changed his mind. The deeper message embed in the course handout would be in most case start-up social ventures are just like normal venture capital, they have high requirement of return profit (or they are self-interested). Today’s venture capital money is flowing toward safer bets on the energy front, tomorrow money could flow to even a different field (Biotech, healthcare etc) A sustainable impact is fostered under a sustainable company, the unpredictability of social venture put a shadow on creating social impact.

During my day back in PwC, when talking to venture capitalists who read 20 BP a day, they told me the current market allows less than 10% of successful start-ups. I am deeply worried as intuitively, social ventures take an even higher risk, since part of the utility come from the social impact they help created. We are not able to accuse the social ventures “Lack of Stamina” in the article because they are set up as for-profit businesses from the outset, however, for these investees who create social impact, how to deal with such unexpected change?

My question:

Bigger money from venture=> Bigger moves, promotion…=> Bigger social impact from investee

Is there a preventive way to secure the funding risk for the investee, AKA spread the funding risk out?