These guidelines are for the Social Entrepreneur seeking to form or engage in a “Social Enterprise.” ProtoStar defines a “Social Enterprise” as a venture seeking to address a social problem with a revenue-generating solution. The venture may be in the form of a proposed project, nonprofit organization, or corporate entity. The Social Enterprise must have both a mission-oriented objective and a for-profit motive. The amount of revenues generated must allow the Social Enterprise to be at a minimum self-sustaining, if not profitable.
To qualify as a Social Enterprise seeking funding from ProtoStar, the Enterprise must identify an Unserved or Underserved Need, a revenue-generating Business Plan that will serve the unserved or underserved need, and a Social Impact that is identifiable, concrete, and measurable.
If the Social Enterprise meets ProtoStar’s criteria, then funding may take the form of a Loan, Equity Investment, or a combination thereof.
If your organization would like to apply for a Loan or Equity Investment from the ProtoStar Group, please provide the following information about your proposal and supporting documents as part of your application. Please remember to sign and date your application.
ProtoStar requires a hard copy of the application and an electronic copy. The hard copy, together with all supporting documents, should be mailed to:
ProtoStar Group, 9984 Scripps Ranch Boulevard #232, San Diego, CA 92131
The electronic copy of the application and supporting documents may be emailed to info@protostargroup.com.
After a review of the information and documents submitted, the ProtoStar Group may request additional information and/or documents.
ProtoStar does not have application deadlines, but accepts them on a rolling basis. Please note, however, that applications received after October 31 will not, as a practical matter, be considered until after February 1 of the following year. This is because ProtoStar needs to finish processing any pending grant applications for the calendar year and conduct its annual review during the month of January. ProtoStar thanks you in advance for your patience and understanding.
I. Description of Proposal. Please describe your proposal in 1,000 words or less. Please include the following information in your description.
A. What is the amount of the Loan or Investment that your organization is seeking? Please indicate whether you are seeking a loan, an equity investment, or combination thereof.
B. What are the proposed terms of the Loan or Investment? For example, if the request is for a loan, please state how long the loan is for, the proposed interest rate, terms of repayment, etc. If, on the other hand, the request is for an equity investment, please state the proposed percentage of ownership offered, the amount of voting control in the enterprise, the proposed dividend rate, including any preferential distributions, and other essential terms of the equity participation.
C. What is (are) the unserved or underserved need(s)? Please be as specific as possible.
D. Why is (are) the need(s) unserved or underserved? Please reference or include any independent articles, research, or studies.
E. How will your organization measure whether your organization has successfully met the need(s)? Please provide both quantitative and qualitative measures.
F. How many people will be affected by your organization’s proposal? In what way will they be affected? Over what period of time?
G. What is the structure of the Social Enterprise? Does the Social Enterprise already exist? If so, is it a nonprofit organization, for-profit corporation, or some type of hybrid, such as a Benefit Corporation or “B Corp?”
II. Business Plan
A. What type of business are you engaging in to help meet the unserved or underserved need(s)? Are you selling a product, a service, or both? How will selling that product and/or service help meet the unserved or underserved need(s)?
B. How do you define your products or services market? What is your geographic market?
C. Who are your target consumers?
D. What is the competitive landscape? What other businesses and/or organizations are seeking or have tried to meet the unserved or underserved need(s)? Please include both nonprofit organizations, for-profit businesses, and if applicable other Social Enterprises.
E. What is the strategy for bringing the proposed product(s) and/or service(s) to market?
F. Who is on your Board of Directors and/or Board of Advisors? Please provide their biographies and any experience they may have in the type of business being proposed.
G. What is your management structure? Please include the biographies of the senior management, especially their business experiences and track records in the type of business that is being proposed.
H. What are your staffing needs?
I. What is your marketing plan?
J. What are your distribution channels? Will you have a bricks-and-mortar operation, an ecommerce site, or both? Will you rely on third party warehouse and/or distribute your product(s)?
K. How will you handle consumer returns, complaints, and disputes? Will there be a customer care department or calling center?
L. What distinguishes your organization’s business proposal from others?
M. What are the projected costs and potential revenues? If your organization is already engaging in the business, please provide the budget-to-actual numbers. If the proposed business is new, please provide projected expenses and revenues and the assumptions behind those projections.
N. Have you test marketed your idea? If so, please describe how you tested your ideas, how many people were used in the study, what the methodology was, and what the results were.
O. What are the business and market risks? What uncertainties will the proposed business face?
P. Do you have a Plan B or Plan C? What if the proposed business plan does not succeed? Do you have one or more backup plans? Are there other sources of funding to supplement the business revenues?
Q. Is there an exit strategy?
R. Has your organization submitted an application to other lenders, investors, or funders for the same proposal or business plan? If so, please provide details of the application (amount requested, status of the application, outcome of application, etc.).
III. Documents. In addition to the Business Plan itself, please provide the following documents in hard copy or pdf format. If the information is on your organization’s Website, please pinpoint the Web address.
A. Organizational Documents
1. Filed Articles of Organization or Incorporation
2. Bylaws
3. Tax ID
4. If Nonprofit Organization
a. Tax-exempt letter from the U.S. Internal Revenue Service (or the equivalent agency from your organization’s country of domicile).
b. Form 990 (or its equivalent from your domiciliary country) for the two most recent tax years. If the Form 990 has not yet been filed for the immediate past year, please provide the year-end financial statements instead (budget-to-actuals, monthly cash flow, profit & loss statement, balance sheet, etc.).
5. If For-Profit Corporation
a. Corporate tax returns for the past two years.
b. Filings with the U.S. Securities and Exchange Commission (or its equivalent from your organization’s domiciliary country), if applicable.
B. Financial statements for the past two years and for the current tax year (budget-to-actuals, monthly cash flow, profit & loss statement, balance sheet, etc.).
C. Letter of good standing from your organization’s primary banking or financial institution.
D. Annual Reports for the past two years (if any).
E. Directors’ biographies.
F. Biographies of senior officers and key staff members.
