The Problem in a Nutshell

I thought this summed up the dilemma facing for-profit social entrepreneurs pretty well.

Still, it’s hard to justify most social enterprises on strictly financial grounds. In many cases, investors have to accept lower returns than they would expect from traditional investments. That trade-off has tormented investors in Freeplay Energy, a social business that sells hand-crank radios and lights for people in developing countries and Western nations. The company went public in Britain in 2005, but its revenues have been disappointing, and its stock price plummeted until it was taken private again this year. “It’s hard to have a social mission in a capitalistic system,” says Rory Stear, Freeplay’s co-founder and co-chairman.

Social Entrepreneurship – Business Exchange

But what’s the big lesson here? It’s the rare mission-based company that can successfully go public. In fact, for most enterprises, best not to do it.