E X E C U T I V E S U M M A R Y
THE HIGHLIGHT REEL A qu i ck snapshot of i ns i ght s f rom i nves tor s , ESOs and ent repreneur s sur veys and focus groups
ESOs finance their operations through a combination of internally generated revenue and external funding sources. 52% of ESOs said that they are not financially sustainable and about 55% of ESOs need between 50% -100% funding to support their entrepreneurs in the next three years. Only 30% of ESOs generate between 60% and 80% of their income through the sales of services. 3% of ESOs generate the same range of income through the rent of co-working spaces. This indicates that less than half of ESOs source financing through the services they offer. We also observe significant financial support from grants. 83% of ESOs get 0%-20% of financing through government funding, 68% of ESOs will get the same range of financing from foundations, 79% of ESOs from corporate social responsibility, and 53% of ESOs from donors. At the most, 20% of ESOs revenue comes from grants. As per the research conducted, while ESOs rely on a combination of donor funds and self-generated revenues to successfully fuel their growth during the ESOs early stages, in the long run, it seems unlikely to be sustainable. Not only does it add uncertainty to the mix (how long would ESO receive funding for?), but it increases the level of risk faced by the ESOs themselves and thus its community of members and stakehol- ders. Emerging best practices and strategies.
Our analysis shows that ESOs, entrepreneurs, and investors needs are focused on skills development; mentorship and coaching supports; and sustainability.
While there is a lot of enthusiasm and commitment by most teams operating ESOs, they tend not to have the full range of skills required to effectively support entrepreneurs. The empirical literature on entrepreneurship has provided ample evidence about the existence of a signifi- cant, robust, and causal relationship between entrepreneurial skills and business performance. The reason underpinning this finding is that the more skilled and experienced the entrepreneurs are - the more effective they are in running successful and sustainable firms. The content of skills training needs should to be carefully designed and well-targeted to consider the skill spectrum among ESOs and entrepreneurs.
N E E D S A S S E S S M E N T R E P O R T
Trends and insights from ESOs, entrepreneurs, and investors
Made with FlippingBook Ebook Creator