This case study is from 2014. We’re catching up with Ethical Property Australia to see what they’re up to in 2017. Watch this space.
STREAT is a social enterprise that provides homeless youth with the life-skills, work experience and training to start a career in hospitality.
After a long gestation, STREAT’s founders, Bec Scott and Kate Barrelle, kick-started the organisation in 2010 with two small food carts in Federation Square and a class of nine trainees. STREAT now supports six Melbourne based businesses – including cafes, catering and coffee roasting businesses – which provide venues to support the young people.
The enterprise’s vision is to stop youth homelessness and disadvantage, one mouthful at a time. These problems are hard to swallow, which is why STREAT works with others to stop them. Together they offer disadvantaged youth aged 16-25 a supported pathway from the street to a sustainable livelihood
“When we arrived at donkey wheel house, zero per cent of our revenue came from business operations, now 70 per cent of income comes from the business and within two years it will be 100 per cent. We’ll be running eight different businesses in a $5million company”
— Bec Scott, CEO of STREAT, 2014
Working alongside Paul Steele and donkey wheel house provided support in many ways to STREAT. TDi helped model STREAT’s growth options, educated the STREAT board about impact investment, brokered relationships with potential investors and provided support with developing documentation and agreements.
“Paul ran the process with a pro-bono law firm to create the new entity for the first $300k equity investment. Now we are working on a $2.5m impact investment”.
STREAT recently began modelling its first ten year growth plan.
“There is a gap in the market around the design of complex social enterprise deals. We were able to structure STREAT’s model to get the right mix of debt and equity, the correct market positioning, a strong model and bring together the impact investors”
– Bessi Graham, TDi CEO & Co-founder, Consultant with STREAT
STREAT was a project of donkey wheel when TDi was still a developing idea in Paul and Bessi’s minds. They see it as TDi’s pilot. It was the first social enterprise they worked with intensively – over 12 months – to prepare for investment.
Paul went to five law firms before finding one that could create the new STREAT entity – initially modelled by Bec and Paul on the back of a cafe napkin!
Now as they go out to the market for the $2.5m capital raise, with TDi as the intermediary, there is a track record for investors to draw on. “STREAT are in a very strong position and we expect that they’ll no longer need us once the second capital raise is done”, Bessi says. And that is how it should be.