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The Catalyst Fund: Evolving to Meet New Needs

Launched four years ago, the Catalyst Fund introduced a new kind of flexible, patient social investment, making it Scotland’s first revenue-based social investment product. Its goal was clear: to support social enterprises that couldn’t access traditional funding due to their age, development stage, or business model.

Since its launch, the Catalyst Fund has filled a gap in the social investment market in Scotland. It has helped a diverse range of social enterprises to get off the ground and deliver social impact at scale, including the Energy Training Academy, The Pitt, Farmer Jones Academy, and Woodside Arran.

Four Years On: What’s Changed?

A lot has happened in the last four years:

• Firstfund (the part of the Firstport Group that manages the Catalyst Fund) evolved. Building on the initial investments made, the Firstfund board set out to consider how the Catalyst fund, with its distinct focus on serving those who cannot access other types of social investment, could reach beyond its existing pipeline. This led to the development of a new strategy to enable Firstfund to better deliver on its mission to provide finance options that are culturally and commercially compatible with positive impact.
• We contributed to the Access Report, which encouraged us to look at our own performance and strengthened our commitment to removing barriers to investment for social entrepreneurs from minority communities.
• New social businesses are emerging with different needs, many from outside our existing pipeline—such as spinouts or local communities, and we’re keen better meet their needs.
• We learned from experience: ambitious social businesses need significant financial and organisational support to fully benefit from investment. We know money alone is not enough.

Connecting Support with Investment to Scale

As both the social enterprise landscape and Firstfund evolved, it became clear that the Catalyst Fund had the potential to do much more to support untapped and underserved communities more effectively.

We’ve spent the past year reflecting on these insights and exploring how to better deliver on our mission. We landed on a new concept based on these guiding principles:

• Collaboration. We want to work with organisations across the entrepreneurial ecosystem that are already supporting enterprises and communities that can benefit from the Catalyst Fund. Combining intensive support with investment to grow creates powerful momentum behind enterprise growth.
• Playing to our strengths. We have an incredibly flexible investment product and a brilliant investment team to deploy it. We want to work with partners who are providing expert support to the communities we have identified can benefit from the Catalyst Fund. We can then connect supported enterprises with investment to turn their plans into reality. We don’t need to do everything ourselves when there are already many brilliant organisations in the ecosystem with deep expertise in their areas.
• Keeping it focused. The Catalyst Fund fills a gap, serving social purpose organisations that cannot access other products because of their age, stage or business model. This focus will continue, as well as the levels of investment it can offer (starting at £50K).

We’re now excited to introduce a renewed approach to the Catalyst Fund—three new strands built around partnerships with trusted organisations. These partnerships will help us increase the reach of the fund, better meet the specific needs of different people and communities, and enhance the accessibility and impact of our investments.

Ventures Catalyst: Investment for Impact Innovation

Innovation can create opportunities for global impact and it can spring from a wide variety of contexts, including universities, charities and other organisations. To support these, we’re partnering with organisations that already provide deep business and wraparound support to purpose-led entrepreneurs.

Our first partner in this strand is The Ventures Lab, part of the Challenges Group. The Ventures Lab works with university spinouts and existing organisations to help them build organisational capabilities, foster leadership, support innovation, and crucially, improve access to finance.

This partnership is already established, and we are working with the team at the Ventures Lab as they prepare their current clients to scale. When these social businesses are ready for investment, we will connect them with the finance needed to realise their impact goals. We expect to make our first investment by the end of the summer, so watch this space!

To learn more about The Ventures Lab and the support it can offer, visit their website.

Access Catalyst: Opening Doors for Global Majority Entrepreneurs

In 2024, we partnered with Dechomai and Social Investment Scotland to better understand the experiences of ethnic minority social entrepreneurs in Scotland. The resulting Access Report identified the key barriers preventing access to social investment and outlined actionable solutions.

One clear takeaway from the report was that entrepreneurs from ethnic minority backgrounds need tailored support and funding streams that meet their specific needs.

In response, we’re co-designing Access Catalyst with global majority-led organisations, including Dechomai and Syncplex Lab. This strand will offer incubation support, mentoring, and participatory decision-making—all shaped by those with lived experience.

Syncplex Lab’s incubator is currently open. Visit their website for more information.

Community Catalyst: Backing Locally Driven Solutions

Democratic finance enables local people to invest in businesses that matter to them. But in some communities—especially in low income or remote areas—raising sufficient funds can be a challenge.

Community Catalyst aims to bridge that gap. It will offer top-up investment for community-led initiatives that need just a bit more to bring their projects to life, whether that’s saving a valued local asset or launching a renewable energy project.

This strand is still in the early stages of development. Working in partnership with Democratic Finance Scotland and drawing inspiration from the successful Booster Fund model in England, we’re developing a solution tailored to Scotland’s communities.

The success of this new approach will rely on the power of collaboration

Putting Clients First

Throughout the development of this new approach, we’ve kept our current and future clients at the centre of what we do.

For existing clients (those who come from the existing Firstport pipeline), we are keeping the original Catalyst Fund product available, and they can access investment-readiness support through LaunchMe.

For future clients, we’ve set up a cross-functional team focused on designing a smooth user journey and are working closely with partners to ensure seamless transitions at every stage.

Also recognising that social enterprises need tailored support to manage their investment and achieve growth, we’ve created a new role within our investment team. Our recently appointed Growth Advisor will support the successful development and growth of the Catalyst portfolio, maximising social and environmental impact and helping them to do better business.

A Network of Partners for a Broader Reach

We envision a future where Catalyst Fund investees come from a wide range of sectors, geographies, and backgrounds. While we continue to build and refine our approach, the original Catalyst Fund product remains open and available to any social entrepreneur seeking to create impact at scale today.

The success of this new approach will rely on the power of collaboration. For each new strand of the fund, we aim to grow a broad network of partner organisations. The Catalyst fund is a flexible, patient product that can empower social businesses to make a deep and lasting impact in their sectors and communities. We want to put it to good use, and we want to work with like-minded organisations that can help us achieve this.

If this approach sounds of interest, we’ll be running prospective partners sessions in August and September. Keep an eye on our website and socials, or sign up to our newsletter, for dates and booking links. In the meantime, if you’re interested in working with us to reach and support ambitious social businesses, we’d love to hear from you.