Monday
October 24
2011

Sarah Allen

Bridging the Investor-Entrepreneur Gap

Around the world, India has developed a well-deserved reputation as a hotbed of social enterprise activity. Yet despite the well-publicized successes of enterprises such as Husk Power and E-Health Point, India’s wealth of social entrepreneurs face significant challenges in their efforts to build and then scale their socially-driven businesses. Guidance from seasoned investors who have analyzed countless enterprises – and have often participated directly in several as well – is a critical component to overcoming these barriers. Investors have the expertise and experience to help entrepreneurs understand their language and expectations while also providing vital insights to how to structure and scale an enterprise effectively.

Earlier this month, Intellecap launched a new initiative, Sankalp Investor-Entrepreneur Clinics, which offer a rare opportunity for a select group of entrepreneurs to interact in a casual and constructive environment with investors. At the first event in Mumbai, each of the five entrepreneurs had the opportunity to give a 20-minute pitch, and then discuss their model and strategy with the panel of seasoned investors. The clinics will take place over the next several months in cities across the country in a lead up to the Sankalp Summit and Awards in April 2012. Sankalp Forum was one of the first initiatives to create space for these dialogues between social entrepreneurs and investors with the establishment of its annual summit in 2009. Today, the forum represents a holistic ecosystem that addresses four major challenges faced by social enterprises through its year-round initiatives: access to capital, capacity building needs, the talent gap and knowledge gap.

The panel of investors at the clinic included representatives from two impact investment funds focused on early-stage companies, Aavishkaar and Seedfund, as well as from two mainstream investment firms, Sequoia Capital and Waygate Capital. The enterprises present included Terracon, an ecological consultancy; NoNasties, an organic, fair-trade designer t-shirt company; Cultural Aangan, a rural tourism and livelihood development company; nJawan, an online learning platform for rural youth; and the telemedicine center at Nanavati Hospital. Together the entrepreneurs demonstrated the breadth of the space, spanning sectors, client segments, and professional backgrounds. The one common strand uniting them was a strong desire to apply the rigor and scalability of a for-profit enterprise to making a positive social impact.

The investors’ feedback was tailored to the industry, business model and growth stage of each enterprise. The investors engaged Rashmi Sawant of Culture Aangan in a lively discussion on the challenges of maintaining quality control while scaling the tourist destinations from two to 50 villages. With Terracon’s Aditya Bharnuke, they discussed the consultancy’s high human capital costs and the infrastructure needs for expanding into project implementation, while they quizzed nJawan founder Matt Daniels on his revenue model and metrics for measuring social impact.

Yet several common themes did emerge from the feedback. Investors repeatedly encouraged the entrepreneurs to think more deeply about the competitive landscape, their marketing strategy, profit margin, capital needs and growth strategy. Particularly for the younger enterprises represented, while the social mission was clear and a powerful force driving the entrepreneur, the investors helped highlight opportunities to strengthen their business model and its execution.

Once the presentations wrapped up, many of the entrepreneurs and investors lingered at the venue-the Bombay HUB, itself a resource and co-op working space for social entrepreneurs-to continue the conversations started during the pitches. Several investors expressed interest in serving as informal mentors to specific entrepreneurs. Cards and numbers were exchanged; it was clear that the impact of the session would extend far beyond the day.

Sankalp Forum’s Investor – Enterprise Clinics will continue through-out the year at various cities in India, enterprises are encouraged to apply by writing to sankalpforum@intellecap.com. The Sankalp Forum is holistic ecosystem designed to catalyze impact investments into sustainable and scalable social enterprises globally. It connects over 400 social enterprises, over 400 investors and funders, and 10,000 other stakeholders. It is an initiative by Intellecap, a social advisory firm that works in underserved markets.

Categories
Entrepreneurship, Investing
Tags
social enterprise, venture capital