Sunday
February 19
2012

Scott Anderson

Weekly Roundup: 2-19-12 – Going Beyond ‘Potential’ in Southeast Asia

There seems to be no lack of enthusiasm in the potential for China and Southeast Asia as fertile ground for a flourishing social enterprise sector. The launch of Impact Investment Exchange Asia, for example, has generated much excitement for a formal capital structure. And we continue to hear about new efforts to engage policy makers and enterpreneurs alike in China, as Tao Zhang, Chief Operating Officer of New Ventures, discussed last month. It’s also noteworthy that a discussion on social enterprise in China is on the agenda for Harvard’s Social Enterprise Conference later this month.

But for all the palpable excitement, the realities of establishing a social enterprise infrastructure are clear.

“Time and time again we see entrepreneurs in this region spending a disproportionate amount of time and energy looking for funding, instead of focusing on building and growing their ventures,” wrote Jana Svedova, co-founder of Synergy Social Ventures, in this excellent assessement published in SocialFinance.ca last week.

From the investor side of things, consider the experience of LGT Venture Philanthropy, which seeks out early-stage enterprises that have strong potential to reach scale and triple bottom lines, and provides grants, loans and equity investments. In the three years since LGT has been prospecting for deals in Southeast Asia, the group has evaluated about 300 enterprises – either for-profit or scale-seeking nonprofits. In that time they have have found three organizations, including Operation ASHA, that fit their investment criteria. While there is plenty of talent and promising social startups, the networks to cultivate these businesses through the angel investment stage in Thailand, Cambodia, and Indonesia and the Philippines, are still very much in the nascent stages.

For LGT, it was time to adapt the model and try something new.

“We felt there was more we could do and should do to increase our engagement on the ground,” Joan Yao, LGT Investment Manager for Southeast Asia, told me recently. “We asked ‘What if we had worked with these entrepreneurs for a year on the business plan and provided them some funding so they could have hired a sales manager, for example.’”

To find out the answer that hypothetical, LGT has created the Impact Ventures Accelerator Program. Working with local angel investors, it will provide financing of up $50,000 for selected startups. For eight to 24 months, the accelerator will match enterpreneurs (about two to three per country) with a dedicated business consultant, including alumni of LGT’s iCats program. These consultants will help hone business plans and establish milestones. The accelerator also will work with local social enterprise promotion organizations, including ChangeFusion (Thailand), CSIP (Vietnam), GEPI (Indonesia) and xchange (Philippines) to advance the project.

Applications for would-be consultants interested in joining this project are open until March 5. Yao hopes to have selected the team by April and have those consultants placed in each of the countries by May.

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Categories
Entrepreneurship
Tags
impact investing, investment fund, startup