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Models of High-Level Partnerships with Social Enterprises: Venture Partnerships

How can corporations and social enterprises partner to create a world that works for everyone? On April 4, 2017, Acumen hosted a workshop on high-impact partnerships for leading social enterprises, global corporations, and the organizations that work to link them as a part of the Skoll World Forum Ecosystem Events, to explore this question. Supported by EY, Sainsbury’s, Pfizer and the Skoll Centre for Social Entrepreneurship, the session explored three different kinds of partnerships: Skills, Channel and Venture.

Venture partnerships bring together corporations and social enterprises and are designed to develop new businesses or provide the funds to scale a company’s operations and impact. These partnerships allow corporations to move beyond simply giving back and towards collaborative efforts to drive impact on the ground through entrepreneurial solutions. Many large corporations are now looking to build inclusive, sustainable business models and find that venture partnerships is an approach that works well.

Jenny Sia, Pfizer’s Director of Corporate Responsibility, and Miguel Garza CFO of Clinicas del Azucar discuss and share lessons from their partnership. Clinicas del Azucar is a recipient of grant funding through Pfizer’s Global Health Grants & Investments Program.

Jenny Sia, Pfizer’s Director of Corporate Responsibility, and Miguel Garza CFO of Clinicas del Azucar at Acumen’s April 4 workshop.

There are many examples of success in this space, such as Pfizer Foundation’s Global Health Innovation Grants, which catalyzes and scales a range of health innovations in the developing world. Clínicas del Azúcar, one of the companies that benefit from the program, works to provide low-cost, high-quality care to prevent and treat diabetes in Mexico. Pfizer’s support has enabled the organization to grow to eight clinics, and the hope is to expand to 200 clinics in the coming years by replicating the model both regionally and globally. Pfizer’s Director of Corporate Responsibility Jenny Sia said that these types of investments help Pfizer to inform its business as the company looks to implement more inclusive business models in lower socio-economic countries.

Unilever is another example of a company committed to sustainability across its supply chain. Its Sustainable Living Plan works to empower women, enhance the livelihoods of millions of workers and improve the health and well-being of more than a billion people. The company also developed Transform, in which it partners with innovative start-ups, many of which are social enterprises, to help them scale. These partnerships in turn help stimulate further experimentation and innovation within Unilever. “Purpose and profit together are what Unilever must deliver,” said Clive Allison, Unilever’s Global Director of ‎Open Innovation. “There is no sizeable profit without scale, and one way that we can unlock this is to work with small enterprises initially to deliver social impact at scale in the future.”

Not all venture partnerships are successful, and one common reason is the misalignment of goals and expectations. Acumen wants to help its entrepreneurs find partners—and funding—that align with their companies’ values and mission. At the workshop, attendees explored this theme by looking at both the common pitfalls and success factors in venture partnerships.

Here are five key insights from the session:

  1. It is important for each partner to know its strategic intent individually before moving to co-creating a shared intent. In large corporations, conflicting internal drivers can create challenges for outside organizations trying to engage.
  2. It is beneficial to have fewer, more meaningful motivations rather than a list of diluted reasons for partnering.
  3. Being transparent about goals, as well as process, is critical. These should be discussed and agreed upfront and documented for future reference.
  4. A degree of flexibility and optionality is essential. Changes to the terms of a venture partnership will be influenced by factors, such as a timeline or funding needs, but may also include the option to abandon the partnership altogether based on key milestones not being met.
  5. Some venture partnerships are best suited for multiple players from across corporations, government, foundations or finance, who can collaborate by creating an investment vehicle. This diversification can help decrease the risk for individual actors.

There is often an asymmetry of power and scale in venture partnerships, but there is huge potential when the parties work to create a mutually beneficial exchange. Partnerships are underpinned by a mutual value proposition: social enterprises often offer strong local knowledge, agility and innovative capacity, while corporations have global scale in their network, finances and channels. When the exchange of skills, channels and financing all come together, within a context of strategic alignment and shared values, this makes for an ideal relationship. That’s why we often see Venture, Skills, and Channel partnerships intertwine.

To scale social impact, a whole ecosystem of stakeholders working together to create change at every level of society is needed. Venture partnerships are one powerful model for bringing these various players together, but financing is only the beginning. In the next installment of this series, we’ll explore the role of Skills Partnerships in helping to scale social enterprises and catalyze inclusive businesses.

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