Investing in social value creation

Johan H. Andresen was the first Norwegian investor to become involved in social entrepreneurship. As far back as the middle of the first decade of this century, he provided support to a number of such companies, and he set up Ferd Social Entrepreneurs as a new business area in 2009.

"The idea of scaling up social entrepreneurs gave our vision meaning. Helping to change how society sees people’s potential was a major bonus."

Ferd Social Entrepreneurs (Ferd SE) seeks to generate measurable social results by investing in social entrepreneurs that help make society more inclusive. Ferd SE is one of five business areas at Ferd AS.

In addition to investing in social entrepreneurs, we have for many years also worked actively to facilitate the success of such organisations.

We are in continual dialogue with policymakers and decision makers, and have produced concrete tools for both the public sector and social entrepreneurs. We also invest significant amounts of time, capital and expertise in these projects.

The selection and investment phases

Ferd SE normally establishes a collaboration with up to three new social entrepreneurs a year.

We select companies where we can be involved in making the biggest difference and creating significant social results.

Our board of directors takes the final decision about whether to offer a company a place in the portfolio. The board comprises two former CEOs of Ferd as well as the current CEO, namely Johan H. Andresen, John Giverholt and Morten Borge.

Click for an overview of the companies in our current portfolio, while an overview of our former investments is available here.

Grants and equity investments

We differentiate between investments that are grants and those that are equity investments. Grant investments involve an entrepreneur receiving a capital grant without us taking an ownership stake in the company.

A company that is in an early phase will receive a grant and join our ‘First steps’ program for up to one year. During this period, our team and the company will get to know each other better and will start work strengthening it as an organisation. Those companies that qualify for further collaboration move from the First steps program to our portfolio.

Companies that are admitted to the portfolio sign an agreement that guarantees them support for a three-year period. In addition, work to help the company to grow and scale is undertaken in accordance with planned milestones. The payment of the grant is contingent upon the agreed milestones for the company’s social and financial milestones being achieved.

Companies that are in good shape and ripe for growth will normally be offered an investment of equity by Ferd. An equity investment involves us acquiring an ownership interest in the company. This investment is combined with active board work and a dedicated business developer, as well as a place in our portfolio. We facilitate learning across our portfolio companies as well as contact between their managers. We also expect them to attend two events per year.

After a company’s time in the portfolio comes to an end, it becomes an ‘alumni’ company. This means that our business developers continue to be available for advice and discussion purposes, but the company is expected to stand on its own two feet.

Continual assessment

An important part of our work is assessing which companies to invest in and whether we should do so by providing a grant or taking an equity stake. We are in continuous dialogue with numerous social entrepreneurs to assess whether they meet our investment criteria.

The factors we consider include the company’s market potential, ambitions, social value creation potential, the team’s suitability and whether the company would be a good match with Ferd’s expertise and the rest of the portfolio.

We meet with many exciting social entrepreneurs, but we are only able to enter into a formal collaboration with a few. We try to assist companies that we believe in but that for one reason or another are less relevant for us by providing them with advice about other possible organisations that might be able to help them to grow and develop.