What really matters: A theoretical model for the assessment of social enterprise performance

Social entrepreneurship is a promising approach toward solving social issues and societal problems by applying business techniques with an entrepreneurial mindset (for example, Dees, 1998; Light, 2008; Zahra et al., 2009). The visible success of social enterprises supported and promoted by fellowship associations such as the Skoll Foundation, Ashoka or the Schwab Foundation for Social Entrepreneurship has helped social entrepreneurship gain a prominent role in policy debates (Cohen, 2011; European Commission, 2011) and become an investment focus for foundations and venture philanthropy funds (Achleitner et al., in press). Venture philanthropy funds are investors who use multi-stage selection processes and analyze a wide range of investment criteria (Achleitner and Heister, 2009; Scarlata and Alemany, 2009). They constitute one of the most sophisticated capital providers in the social sector. Within the selection process they analyze a range of different topics such as the social problem itself, the capabilities and personality of the social entrepreneur and, especially, the concept of the social enterprise. The research questions addressed in this chapter are linked to each other. First, we are interested in what company-specific criteria investment managers use in their selection process and what role these play in the selection process.