Community–Led Social Venture Creation

Abstract

The addition of new enterprises to the economy has long been considered essential to economic growth. The process of venture creation in the private sector has been heavily researched and frequently modeled, although few models explain the process of nonprofit enterprise creation. Nonprofit social ventures pursue economic, social, or environmental aims, generating at least part of their income from trading. They fill market gaps between private enterprise and public sector provision, and, increasingly, policy makers consider them to be valuable agents in social, economic, and environmental regeneration and renewal. This article presents findings from a qualitative study of the inception of five community–led nonprofit social ventures, producing a model of the stages of venture creation: (1) opportunity identification, (2) idea articulation, (3) idea ownership, (4) stakeholder mobilization, (5) opportunity exploitation, and (6) stakeholder reflection. A formal support network and a tailor–made support network are also part of the model, contributing resources to the new venture and assisting progression through the stages. The model highlights the resource acquisition and network creation that precede formal venture creation. In the nonprofit sector, these activities are undertaken by volunteers who do not have a controlling interest in the new venture. For practitioners, the model identifies critical stages in the process of community–led social venture creation and two areas where assistance is most needed: pre–venture business support and postcreating effective networks.