New Ways for Social Entrepreneurs to Bridge the Capital Gap
Global Citizen’s Michael Sheldrick reveals how to leverage policy and philanthropy to scale great impact ideas
Key Takeaways:
- Many breakthrough solutions already exist but struggle to scale due to capital constraints
- Successful change-makers leverage both policy incentives and philanthropic capital as alternatives to traditional funding
- Working with unlikely allies is essential for impact — you don’t need to agree on everything to work together
- Strategic early demonstrations of viability can help shape broader policy frameworks
- Philanthropy can serve as “venture capital” for purpose-driven startups that don’t fit traditional investment models
At SXSW 2025, Michael Sheldrick, co-founder of Global Citizen and author of “From Ideas to Impact,” presented a compelling roadmap for entrepreneurs seeking to scale solutions to the world’s most pressing challenges. With his experience mobilizing over $49 billion for global poverty initiatives through Global Citizen, Sheldrick offered practical strategies for bridging what he calls “the capital gap” that prevents great ideas from achieving meaningful impact.
The Capital Paradox: Breakthrough Solutions Without Breakthrough Funding
Sheldrick opened by addressing a frustrating paradox:
“Some of the most needed breakthrough ideas, technologies, entrepreneurial concepts — whatever it is — we already have them at our disposal to address the biggest challenges of our time.”
So why aren’t these solutions scaling?
The answer, according to entrepreneurs Sheldrick has interviewed across sectors, is consistently about capital access. This seems counterintuitive given record investments in areas like clean energy, which reached $2.1 trillion globally last year. Yet many purpose-driven entrepreneurs remain unable to access these funds.
“We see these big numbers being thrown around, but we can’t access that,” Sheldrick said, summarizing the frustration of countless social entrepreneurs with “incredible decks” and “incredible advisory boards” who still struggle to secure funding.
Two Pathways to Scale: Policy Incentives and Philanthropic Capital
Through his research and experience, Sheldrick identified two primary strategies that successful change-makers use to overcome the capital gap:
1. Leveraging Policy Incentives
The first approach involves using government policy frameworks to unlock capital and drive adoption. Sheldrick shared the story of Collie, a coal-dependent town in Western Australia facing an uncertain future as the energy transition accelerated.
Initially resistant to change, community members eventually came together — including climate activists, coal workers, and local business leaders — to develop a comprehensive transition plan. Rather than fighting each other, they united to leverage government procurement powers and policy incentives, convincing officials to invest in battery storage and other clean energy infrastructure.
“And how did they do this? Well, they focused on solutions, not blame. They embraced unlikely allies and they prioritized impact over ideology,” Sheldrick explained. The result: Tesla recently established a battery maintenance facility in the town, creating new jobs and revitalizing the community.
2. Inspiring Philanthropic Capital as “Venture Funding”
The second approach taps into the growing pool of philanthropic assets, now worth over $1 trillion in America alone — double the amount from a decade ago.
Sheldrick highlighted innovative models like Exit Ventures, which attracts philanthropic capital to fund early-stage purpose-driven startups addressing major global challenges. One example is a company developing completely dissolvable alternatives to plastic bags that traditional investors might consider too risky.
“It’s a win-win for them,” Sheldrick noted about philanthropic investors, “because they still get their tax write-off if they invest in these ideas.”
Case Study: Scaling Africa’s Live Events Industry
Sheldrick illustrated these principles through Global Citizen’s “Move Africa” initiative. Given Africa’s need to create 800 million jobs over the next decade to accommodate its growing youth population, Sheldrick’s team identified a significant opportunity in the live events industry.
“For every dollar you invest in music and film versus manufacturing, you create eight times more jobs,” Sheldrick explained. Yet when they approached major production companies, they encountered skepticism: “‘It’s not possible. It’s unviable,’” they were told. “‘There’s no market. People won’t pay for tickets. There’s no sponsorship dollars… and anyway, there is not enough skills available.’”
Rather than accept these assumptions, Global Citizen partnered with artists like Kendrick Lamar and John Legend to launch an international tour circuit through Africa. Starting with a single show 18 months ago, they’ve already expanded to multiple cities, disproving every objection along the way:
- Shows sold out, demonstrating market demand
- They attracted sufficient sponsorship support
- 90% of crew was locally employed
- 95% of production equipment was locally sourced
- They trained local riggers who are now in high demand for other events
The key to success? Philanthropic capital. “We had to go out to a few well-meaning philanthropists and convince them,” Sheldrick said, asking them to “be the first movers to invest in this idea, to bring it to scale so that eventually investors will see it and emulate that and invest commercially.”
Being a “Policy Taker” Before a “Policy Shaper”
One particularly insightful strategy came from Greg Jackson, founder of Octopus Energy, who went from a startup to becoming the largest provider of domestic electricity in the UK in just a decade.
Jackson’s approach: You have to be a policy taker before you become a policy shaper. Show you can grow an idea, show it’s viable. Get early support, and then you can go to government with hard data, and you can influence policy at a macro level.
For example, when conventional wisdom said consumers wouldn’t change their energy usage patterns even with incentives, Jackson offered free energy during peak renewable production times. The result: “Contrary to the myth, people changed their behavior overnight. There was a four-fold uptake in people changing their behavior to when the wind was blowing the most and the sun was shining.”
Armed with this data, Jackson successfully influenced broader government policy changes — but only after demonstrating viability first.
The Common Thread: Embracing Unlikely Allies
When asked what all successful impact-driven entrepreneurs have in common, Sheldrick pointed to one consistent theme:
“To create change, to scale impact, requires working with those you don’t always like or agree with. In other words, you don’t have to agree on everything to make a difference.”
This principle was illustrated through the story of a climate venture capitalist who convinced a climate-skeptical businessman to invest in a major solar panel project. Though the investor explicitly stated, “don’t be talking to me about climate change,” he still recognized the economic benefits of renewable energy.
“In this case, it didn’t actually matter,” Sheldrick observed, “because he was already investing in this startup.”
Moving Forward in a Divided World
Sheldrick concluded with a powerful reminder that despite pervasive pessimism, today’s entrepreneurs have unprecedented tools to drive change: “We have more at our disposal to turn these ideas into impact than any previous generation in the history of humanity.”
The question facing today’s purpose-driven entrepreneurs isn’t whether solutions exist — it’s whether we can overcome divides to implement them:
“Are we here to win arguments, or are we here to try and impact the world and give it a go?”
For entrepreneurs navigating today’s complex challenges, Sheldrick’s message was clear: solutions exist, capital is available, and scale is possible — if we focus on practical pathways rather than perfect agreement.
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Note: Generative AI tools were used in the creation of this article to assist with research, summarization, and editing.
