✨How Catalytic Capital Bridges the ‘Valley of Death’ ✨
The ‘valley of death’ is a widely recognised challenge, whereby start-ups initially struggle to cover their costs until they can increase revenue, which results in many being bootstrapped and remaining subscale.
In the UK the valley is particularly wide due to long public sector sales cycles and because the majority of social investment available is traditional debt (which is seldom suited to building reserves or growing organisations). Our experience and evidence show the gap is even deeper for social enterprises led by women and Black, Asian, and ethnically diverse founders due to trust deficits in investors.
This is where catalytic capital plays a vital role in the philanthropic value chain. Unlike conventional investment, catalytic capital is patient, flexible, and impact-first. It provides:
🔹 Smart philanthropic capital to absorb risk and unlock further funding
🔹 Business expertise to strengthen operations and long-term viability
🔹 Access to networks of supporters, collaborators and clients
🔹 Leverage funding to bridge the gap to financial sustainability
At Sumerian, we see catalytic capital as a bridge - helping social enterprises navigate the valley of death and reach a point where they can attract further investment and scale their impact.
We’d love to hear your thoughts - how can we work together to unlock more catalytic capital and bridge this critical funding gap?
Check out the graph below, from our Inclusive Social Investment report, for a visual representation of where catalytic capital sits in the philanthropic value train.
#CatalyticCapital #ImpactFirstInvesting
