Innovation does not have to be a great invention that will change the world forever. Innovation is often seen as the application of better solutions that meet new requirements, needs that are not clearly defined, or the existing market needs.
Financing innovations allows organizations to conduct research, adopt technologies necessary for inventions, and develop and commercialize innovations. Accessing external finance for innovation is an important challenge for businesses. Companies can finance innovation activities using different funding instruments provided by different types of financial intermediaries and investors. Access to external sources of financing is often a challenge in the early stages of business development, as at this stage companies face high barriers to accessing finance, especially because they lack experience.
Financing innovative ideas for social enterprises is of even greater importance given that social enterprises contribute to the society as a whole. Consequently, the financing of social enterprises is the financing of the company.