Entrepreneurs are known for seeing an opportunity and using it to launch their success, usually by creating a small business. Many would tend to think there is one type of entrepreneur, but there are two main types. One is the business entrepreneur who is most common, and the other being a social entrepreneur. But what’s the difference between the two?
When looking at the differences between social entrepreneurship and traditional business entrepreneurship, it’s important first to examine how they differ in their missions. Both have fresh and new ideas to create products and services for consumers, but they have different ways of going about it. For social entrepreneurs, their approach isn’t driven by wealth. Unlike business entrepreneurship, in social entrepreneurship, they use wealth, not for their benefit, but to effect more social change. Instead of focusing on profit, they focus more on changing the status quo for their consumers and creating a positive change in the world.
Another big difference is in the kinds of investors involved in social entrepreneurship and business entrepreneurship. Many social entrepreneurs seek for their funding through philanthropists. Both share the same vision of bettering the world and creating a positive change. When philanthropists invest in social entrepreneurs, they still expect to see a return-on-investment (ROI), but they become involved with the business likely due to its social mission. Business entrepreneurship, on the other hand, seeks investors from venture capitalist firms and only focus on ROI.
Definition of Wealth
The focus of social entrepreneurship is bettering the world and positive social change. This also defines wealth. All of the efforts are aimed at raising money, but not for their wealth. They raise profits to create positive change and social innovation. The wealth and money accumulated by social entrepreneurship are defined as a tool that creates positive change. Money is used to donate to the causes they are supporting, not as a profit to them. Business entrepreneurship is the complete opposite–the money they accumulate is by definition a profit for them and them alone. Money is their end goal.
When examining social and business entrepreneurship, the differences are clear. Although both are looking for new opportunities to change the world, social entrepreneurship is not-for-profit. They support a cause to change the world for the better and use every tool at their disposal to go forth with that mission.