FASE supported social entrepreneur and Ashoka Fellow Heinz Frey in developing a hybrid business model and tailored financing for it.
The DORV project consists of two parts: (1) a non-profit company, responsible for the dissemination and further development of the DORV idea and the operation of integrative DORV and quartVier centers and (2) a non-profit company, responsible for advising municipalities and citizen groups on the establishment of DORV and quartVier centers and acting as a franchisor for them.
Since the establishment of the first DORV center, the demand from municipalities for the transferability of the DORV concept to other regions has increased steadily. With the support of the Ashoka grant, Heinz Frey was able to scale the DORV concept in Germany on the basis of a franchise model. In addition, the transferability of the DORV concept to urban residential quarters has been developed and successfully successfully piloted ("quartVier centers").
To achieve this, the company had a financing requirement of 150 000 euros. The money was needed as advance financing for the UG until its own revenues can fully cover the expenses. With the additional funds, the DORV team is able to roll out the social impact of the roll out the DORV concept throughout Germany.
Scaling with as hybrid business model: two non-profits. Combined they form the “wandering DORV- school.”
Mezzanine-Financing with social responsibility as a hook that is a cheap and flexible method of financing, which is paid out when reaching social development goals that are predetermined. Additionally, the liquidity stays within the company to expand its operations.
As a social enterprise, DORV UG is run on a market economy basis. The profit generated is invested exclusively in the further expansion of the business and transferred to the non-profit sister company DORV gGmbH, which is itself a self-contained financing system.
The prerequisite for this is that the hybrid investors should, as far as possible, not claim any profit distributions, i.e. do not take a stake in the company.
Source: FASE Deutschland
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