The Challenge

In 2012, Ashoka Germany undertook a major study in partnership with McKinsey to better understand the main obstacles to the evolution of social innovation in Germany and Europe. When access to the right kind of financing for social entrepreneurs proved to be the number one barrier, Ashoka Germany decided to establish FASE as a spin-off. FASE’s mission is to support early-stage social entrepreneurs to access growth capital so they can continue to scale their impact and innovate. To achieve this, FASE needs to work on both sides of the financing equation and help overcome the strategic financing gap or “missing middle”. By supporting potential investors from different “financing planets” with targeted impact knowledge and an open pipeline of attractive investment opportunities, FASE inspires them to use financing for measurable, positive and sustainable impact. By helping social enterprises to get investment-ready and prepare themselves for a structured, well-managed and successful financing round, FASE professionalizes the demand side of capital and removes the top barrier for investors to engage in impact investing. In addition, FASE advocates for a thriving pan-European market for social innovation by disseminating knowledge, collaborating with many relevant market players and piloting innovative financial solutions that are able to bridge the notorious missing middle.

The Practice

To put this mission to practice, FASE builds on a set of mutually reinforcing activities that address the root causes of the missing middle challenge:

  1. Creating and piloting innovative financing solutions: Impact ventures, particularly in early stages, need tailored, often hybrid and innovative financing instruments that support them best on their ambitious growth paths and impact scaling. FASE developed and implemented several of these innovative solutions, which then serve as inspiring blueprints for other market actors to replicate or adapt.
  2. Expanding the investor side: There are still few active impact investors who directly engage in social enterprise finance, and even fewer investors with a much-needed impact-first, concessional approach. By using a wide array of de-risking and return-enhancing mechanisms in social enterprise finance transactions, as well as by actively closing pressing knowledge gaps, FASE contributes to mobilizing various types of funders and investors for impact and opening them towards engaging in early-stage, high-potential impact ventures.
  3. Building investor coalitions and diversifying risk: Transaction costs for investors tend to be relatively high in smaller early-stage transactions with limited financial upside, which are typical for early stages of impact ventures. By establishing investor syndications and coaltions, often across very different investor types, as well as by pooling investors in innovative fund structures such as the “European Social Innovation and Impact Fund (ESIIF)”, FASE contributes to mitigating real or perceived risk and mobilize much more capital on the supply side.
  4. Professionally coordinating transactions: FASE manages the entire transaction process from preparation to closing and thus acts as a trusted advisor and highly experienced moderator for social entrepreneurs and investors, which establishes trust and makes the process smoother for both.
  5. Advocating and disseminating knowledge: FASE is considered a thought leader in social finance and engages in various advocacy initiatives to improve the ecosystem, e.g. as a member of the GECES, the G7 Impact Investing Taskforce, and the EVPA Knowledge Center Advisory Committee. A multitude of publiciations such as the Recipe Book for Social Finance of the European Commission, the OECD Good Practice compendium on social finance, a study of the German Ministry for Economic Affairs and Energy about conditions for scaling social enterprises share vital lessons learned and thus help advance the ecosystem.


Over the past 7 years, FASE enabled over 100 direct investments in more than 60 social enterprises with more than EUR 40 million raised and initiated the ESIIF as innovative co-investment fund.

Insights / Advice to Peers

  • Collaborate. Engage. Creating a thriving pan-European ecosystem for social innovation needs new ideas, great creativity, collaborative solutions and persistent engagement to overcome silos, shift mind-sets and take action. Reach out to others who have “done it” already, rather than re-inventing the wheel.
  • Build trust and share knowledge. Social enterprise finance requires trusting relationships, patient capital and a long-term, impactful commitment to learn, share and grow. Make sure to bring and inspire the right motivation and expectations and team up with those who have a systems change perspective.

Further Resources


Dr. Markus Freiburg
Founder & Managing Director