Venture capitalists Northstar Ventures have launched a new charity with ambitions to fuel the North East social enterprise sector.
Inspired by the Northern Rock Foundation, the Northstar Foundation will use a proportion of the investors’ profits and potentially outside money, to fund regional social enterprise. Details of the foundation’s funds and what proportion of Northstars’ profits will be used are yet to be finalised, but director Alasdair Greig said the charity will follow Northstar’s remit to support entrepreneurship in the region.
An initial fund is expected to launch in the next three to six months and may also comprise funds from individual investors.
Mr Greig said: “There is an increasing number of young people that come to us with business ideas that have social responsibility at their core, and that’s a really heart warming trend that we need to celebrate.
“At the same time more and more investors want to see social capital developed alongside their returns. In some cases investors might be willing to compromise on those returns in the interests of maximising the social impact.
“As venture capitalists we invest in businesses for commercial return but we always have our eye on social return as well. The launch of the Foundation is about making social return a deliberate focus of our investment strategy.
“We want to make that entrepreneurship space and community more accessible, particularly for young people.”
Three trustees have so far been appointed to the Foundation, which Mr Greig said had been partly inspired by the Northern Rock Foundation.
Northstar was recently appointed to manage the North East Social Investment Fund (NESIF), a separate £9m loan pot, supported by money from the Northern Rock Foundation, Big Society Capital and The Esmee Fairbairn Foundation.
The fund is tasked with developing the market for social investment in the North East, which also feeds the ambitions of the Northstar Foundation.
Northstar will administer individual investments of £100,000 to £1m in size from the fund, which targets charities, community interest companies and registered societies.
Mr Greig added: “The new fund hasn’t done any deals yet, but the team is excited about bringing our investment and expertise to the social enterprise sector — and ultimately supporting businesses that create real social impact for the North East.”
Tony Henfrey, chairman of Northstar Ventures and chair of the trustees of The Northstar Foundation, added: “I am delighted to be working alongside Northstar Ventures to get the Foundation actively involved with social investment in the North East.
“This is a really exciting project, and it reinforces Northstar Ventures’ commitment to help our community even further.”