Payal Shah

The Questions of Sankalp Forum : Angels, incubators, impact measurement and who should pay for it all

Nearly 1,000 members of the impact investing community congregated at the Sankalp Unconvention 2013 last week. The fact that this industry has grown so rapidly is anecdotally visible in the turnout at this event – while one would expect social enterprises and investing funds; the breadth of representation from other players was impressive: from incubators, international aid agencies, journalists, and academia to even tech consulting services, marketing and branding specialists.

As the sector grows and the conference evolves, some interesting and nuanced themes emerged.

Rise of the angels: For some time now, the angel investing community has become active in the impact investing space and this feels like an increasingly growing tribe. This was evident at Sankalp too as several members of the Indian Angel community took active roles at the event. Reena Mithal, an angel investor who backed a vocational education enterprise last year (LabourNet), had interesting experiences to share. As an angel, one has a choice of creating a diversified impact portfolio or putting all of one’s might behind one company, Mithal noted. She chose the latter, but believes it all depends on one’s risk taking appetite and how involved one wants to get with the enterprise.

Universities as incubators: From the top management education institutes of the country such as Indian Institutes of Management to the top technology ones, as in Indian Institutes of Technology, incubation in the walls of academia has now become de riguer. Many institutios were representated were at Sankalp, and several are considering social enterprises separately as a sector to pursue. An interesting session on ‘Incubating the incubators’ touched upon developing improved systems; methodology and in fact even a curriculum for effective incubation. While questions remain on whether the incubated enterprises are getting real access to the knowledge residing in these institutes or simply access to infrastructure, one cannot deny that these efforts will help the ecosystem and provide sandboxes for entrepreneurs to experiment.

Impact measurement and who should pay for it: While effective measurement continues to remain a question the sector is grappling with, some of the conversations around it did get more nuanced. Specifically, some interesting questions ranged around who should bear the cost of the measurement. While there are still divergent opinions on the methodology and metrics, there is a growing understanding of the costs and “effort capital” involved. In the Spotlight on Measuring Impact session, participants discussed whether capital providers or entrepreneurs should bear the cost of the measurement process. Much of the answer depends on the intended use of data – output-based impact figures are used primarily by investors for portfolio review and milestone tracking, while the customer research and metrics provide insights more relevant to the entrepreneur

Government as a key collaborator: No impact gathering is complete without people voicing critical opinions of the government and its inefficiencies. However, the final debate of the Summit voiced it well – we need to recognize the more complicated relationships this sector shares with the government. These range from the government being a direct payer for services to subsidy provider and even funder of funds. One cannot wish the government away; we will have to find ways to work with the government machinery, which has the potential to help test and scale new models.

At the end of the day, the sector is said to have invested $100 million in India last year and while some may question whether we are jumping the gun and putting too many resources behind it, others believe it necessary given the early stage nature of the majority of enterprises and ecosystems we operate in. Time will tell. In the meanwhile, forums like Sankalp Unconvention continue to raise the bar on the tough questions asked, pushing the sector in the right place.

Payal Shah is a business development manager in Acumen Fund’s India office.

Read more of NextBillion’s coverage of the Sankalp Unconvention Summit:

?Sankalp Unconvention Summit 2013: The Global Hotspot for Innovation

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