What are boards, investors and management teams to do when there is tension between the financial and social bottom lines of social enterprises? And are there ways of optimizing the financial performance of the business without negatively impacting the social performance?

This article describes some of the learning Social Capital Partners has gleaned from seven years of investing in employment-based social enterprises. We identify what we believe to be the five most important factors that determine whether a social enterprise will be profitable or require some form of subsidy.

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