* Guest post by SOCAP11 panelist Ross Baird
Socap 2011: The Importance of Language
Whenever I talk to someone new to the social capital markets, I feel like the first fifteen minutes of any conversation is a definition of terms. A jargon-filled industry does no newcomers favors (and certainly wasn’t helpful to me when I was new to the space): in the spirit of making the social capital markets more accessible, I want to go through a quick definition of over-used and under-rated terms.
Top four over-used terms
“Social entrepreneur”: with apologies to Bill Drayton, every entrepreneur is a social entrepreneur. Over-using the term makes the mainstream take the sector less seriously. Just use “entrepreneur.” (Also, for the politically inclined, ‘social entrepreneur’ alienates 50% of the country, even though there are a lot of capitalism-loving liberals in the sector!) Also see: “Serial social entrepreneur”
“Technical assistance”/”hand holding”: define what you mean: building financial models? Helping companies raise money? Vague, general “consulting” is hard to rally behind (and entrepreneurs find it somewhat patronizing).
“Sustainability”: Do you mean carbon-neutral or cash-flow positive? Be specific about what you are talking about. Maybe: “We are looking to take in more in revenues than it spends.”
“Skin in the game”: Another word for an indirect ask. Instead, say “I want to make sure you have the same incentives—financially, professionally—that I do to make this work.”
Top for under-rated terms
“Exit opportunity/liquidity event”: Entrepreneurs, if you don’t know what this means, find out. Investors will want to know.
“Cash flow”: the most important part of an entrepreneur’s balance sheet. More important than projections or valuation.
“Human capital” (the term is overused, but the concept is not: it means HR, talent acquisition/management); with emphasis (often deservedly) placed on inspirational entrepreneurs, both companies and investors overlook the individual’s plan for building a team/network to execute the vision.
“Risk analysis”: Something all enterprises need to do: what can go wrong here (both internally and externally)? What worries your competitors? A proper assessment of risks (and plans to over-come them) brings a dose of realism to our over-hyped world and helps the mainstream take us more seriously.
Simple messaging is important to both explain what we do and translate what went on at the amazing rush of SoCap ’11 to the billions of people who weren’t there.
