5 Differences Between Social and Regular Entrepreneurship

by / ⠀Entrepreneurship / September 30, 2022
social and regular entrepreneurs

Slowly rising in demand and interest are social entrepreneurship. A social entrepreneur is someone whose focus is to create a business that is able to make a positive impact on society. As many issues around the globe continue to get in the spotlight, many problems that have lasted a long time are reaching crisis points. These social entrepreneurs are then creating businesses that help simmer down the boiling pot of problems that we have.

But, social entrepreneurship is different from regular entrepreneurship. Each has a different business model and practice that they use to achieve their goals. Below are five of the biggest differences between social entrepreneurship and regular entrepreneurship.

Investing the Entrepreneurship

For social entrepreneurship, many seek out philanthropy for their financial resources. While investors typically want to see a return, they do, however, have a more present role in the business. That is because they are more interested in the goals of the business rather than monetary gain.

As for normal entrepreneurship, they receive their investors via venture capitalists and other similar firms.

How Do Profits Work?

Social entrepreneurship uses its profits for donations to charity and local community organizations. Although social entrepreneurship does get into some for-profit activities, that is usually to help keep their organization running. Therefore, they tend to set up their organizations like a nonprofit.

Business entrepreneurship uses its profits to return on investors, stockholders, and shareholders. It can also be used to grow the company in a variety of ways like more employees or opening up another location. It’s all about making money.

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The Idea of Wealth

Wealth is an important part of both types of entrepreneurship. However, both have different views on it. Those who are in business entrepreneurship want to make money. They value it because it makes them richer and grows the company more.

For social entrepreneurship, individuals also care about money as it assets them in their goals. However, they merely see it as a tool to help advance their goals.

Interestingly enough, both types of entrepreneurs seek serious change by accumulating money through offering greater solutions.

One Versus Many

According to the “Stanford Social Innovation Review,” the magazine has stated that venture capitalists for business entrepreneurship are keener on investment when they see who is on the leadership board and what support they have.

Philanthropists are a lot of the time the singular main investor of the social entrepreneur. Those philanthropists are more interested in who is the leader of social entrepreneurship over the many other workers that may be employed under the leader.

The review has also said that true successful change can only be done depending on a variety of factors. Strong leadership is often required and needed, but a single person alone is less efficient.

Approaching the Problem

A writer for technori.com had gone to the Ideation Conference in Chicago. This three-day event was created by Charles Lee, founder of Ideation Consultancy. It is stated that this is a must-attend event for those participating in social entrepreneurship.

The article writes that one of the biggest differences between business and social entrepreneurs is how they approach the problem.

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Social entrepreneurs can identify the problem, but have a harder time fixing the solution. But, the business or “tech” entrepreneurs have a more difficult time finding a problem. Rather, they create solutions that are in search of a problem.

While not every business or tech entrepreneur is like the ones above, it does paint a rough picture of how the two business models operate.

For social entrepreneurship, it can be easy to find the problem. For instance:

  • Climate Change
  • Racial Discrimination
  • Housing
  • Poverty
  • Crime
  • World Hunger
  • Disease

These are all serious issues that affect millions of people. But, these problems are often deep-rooted and it can take a lot to make a change. Solutions are harder to come up with mainly because of disadvantages in finances.

But, with business entrepreneurship, or, at the very least, a tech one, it is a different story. Some want to create things to stand themselves out to be the next Jeff Bezos or Elon Musk. Instead, they often make things that no one really asks for. Sure, it may help with some minor inconvenience, but putting all of your resources behind things is poor planning.


Both types of entrepreneurship have similarities and differences when it comes to their business models.

Business entrepreneurs are concerned with money and accumulating more wealth. That is the beginning and end goal. Yet, social entrepreneurs seek to make a better society, using wealth merely as an instrument in advancing toward a positive society.

Still, they are both businesses through and through. They do need wealth to survive and to keep themselves running. But to them, money means different things. While one is not better than the other, it’s good that we have both.

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Related Post: 10 Tips to Make a Big Impact as a Social Entrepreneur

About The Author

Tristan Anderson

Hello! My name is Tristan Anderson and I live in Manhattan, Kansas. I enjoy being in nature and animals. I am also a huge geek who loves Star Wars and has a growing collection.


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