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Thursday, May. 16, 2013
What is the future of innovation? How can we successfully integrate investments in sustainability and social change?
About the class
It is time to become social entrepreneurs 2.0. The social sector has matured enough to provide valuable lessons to today’s social entrepreneurs. There have been enough like you to teach what worked, what didn’t and why. It’s time for the next generation to go to school on this. As you prepare your companies for financing, you must understand new tools for financing, what investors are looking for, and how the continuing evolution of social finance effects the way you design, build, and operate. John Kohler brings three decades of experience in venture capital and entrepreneurship to the social sector.
HUB San Francisco
901 Mission Street
San Francisco, CA 94103
Wednesday, May 22, 2013 from 5:00 PM to 6:30 PM (PDT)
In this class you’ll cover:
Equity vs. Grants – what was wrong with the binary
New Instruments – what types of financing are available and in development including Demand Dividend
Understanding ambitions to scale: community scale or global scale companies and impact on financing considerations
Understanding the promise you make to investors: what is it, and how will you make it worth their while?
About John Kohler
Executive Fellow – Center for Science, Technology and Society
Santa Clara University
Co-founder – Toniic
For the past several years, John has been a mentor to Social Entrepreneurs at the Global Social Benefit Incubator and now also serves as an Executive Fellow and Director of Social Capital at Santa Clara’s Center for Science, Technology and Society. Last year he co-authored a report on impact investing entitled Coordinating Impact Capital: a New Approach to Investing in Small and Growing Businesses. In addition, he is one of the founders of Toniic, a syndication network of impact investors. Outside of this, John manages technology investments through Redleaf Venture Management. He has been heavily involved in technology product formation and has been concentrating on Internet and Life Science startups since 1994. John’s background includes twenty years of executive level positions at technology corporations including Hewlett Packard, Silicon Graphics and Convergent Technologies and Unisys. He was one of the founding executives at Netscape Communications. John is currently on the board of Redleaf Group, chairman of the board at LucidMedia, and serves as a board member at PACT, an NGO based in Washington D.C. He previously led investments at AdRelevance (JMXI), Mosaic Communications (TWX), NetGravity (DCLK), RedCreek Communications (SNWL), and Wireless Online. John is a managing member of the UCLA Venture Capital Fund and serves on the UCLA Sciences Board of Visitors. John received his bachelor’s degree in international economics from UCLA and completed executive programs at Wharton and Stanford business schools. He also serves on advisory committees at CSTS, the UN Foundation, and HUB Ventures. He is a nationally accredited soccer coach, an avid skier, sailor, and a member of the Santa Cruz Yacht Club.
Register at eventbrite today:
Friday, Feb. 8, 2013
Executive Director Thane Kreiner predicts “… in the next 10 years, the convergence of technology and business model innovations could disrupt how energy is produced, distributed, and priced – not just in the frontier markets of the developing world, but also in the developed world.”
To read the article, click Here.
Friday, Dec. 14, 2012
Earlier this week the Center was delighted to host a holiday reception to celebrate the accomplishments of the last year, like the graduation of several GSBI Online cohorts, and the first year of our GSB Fellowship program.
The main event of the evening was John Kohler's presentation of his new research proposal for a demand-dividend investment vehicle for impact investing.
The Demand-Dividend project work will include final financing model design, a regression analysis on existing enterprises, and the creation of flexible term sheets. The Argidius grant will fund the field-oriented phase - preparing to test the new financing model with between four and six enterprises beginning in early 2013. Planning and initial diligence visits will occur in the autumn of this year.
Two years ago we launched a dedicated Impact Capital initiative with the aim of preparing social enterprises to move beyond philanthropic grants to attract private investment capital. Early work culminated with the release of a white paper, Coordinating Impact Capital
in the summer of 2011.
You can read more about the demand-dividend project in our press release
Thursday, Oct. 18, 2012
Team of SCU Students and Silicon Valley industry veterans among five winners of the Argidius-ANDE Finance Challenge
SANTA CLARA, Calif., Oct. 17, 2012 – A team of Silicon Valley industry veterans and students at Santa Clara University’s Center for Science, Technology, and Society (CSTS) has been selected to design and implement a new investment tool with the potential to aid thousands of small and growing businesses in emerging economies.
This two-year project is one of five winners of the Argidius-ANDE Finance Challenge, a highly competitive international competition administered by the Aspen Institute Network of Development Entrepreneurs (ANDE). The Santa Clara team will receive a €200,000 grant to support the design, analysis, and field-testing of the new investment vehicle.
The Problem: Angels but not Investors
Financing for small and growing businesses in developing economies is constrained by the low level of return from investments already made to date. Most “impact investors” have seen their investment holding period lengthen from 3-5 years to 7-10 years. Without more understanding and confidence in the ability of social enterprises to provide return, equity investors are hesitant or unable to commit new funds.
Achieving reliable and repeated returns would make not only existing dollars available to new investments, but it would also improve investor confidence to commit new capital to what are now seen as difficult or ‘frontier’ markets. So far, debt and equity mechanisms have failed to offset the risks inherent in developing markets with enough reward to encourage new investors.
For small enterprises promising moderate (7% - 14%) returns from moderate ($25K - $250K) investment amounts, a new solution is needed. CSTS believes a risk-capital investment vehicle that is a hybrid between low-return debt and high-return equity is needed – and could encourage significant funding currently sitting on the sidelines to jump into emerging markets.
The Solution: Demand-Dividend Investment Vehicle
Responding to interest in a new model, CSTS Impact Capitalprogram director John Kohler has begun work on a financing concept. The Demand-Dividend project work will include final financing model design, a regression analysis on existing enterprises, and the creation of flexible term sheets. The Argidius grant will fund the field-oriented phase - preparing to test the new financing model with between four and six enterprises beginning in early 2013. Planning and initial diligence visits will occur in the autumn of this year.
CSTS is uniquely positioned to receive this grant. They launched a dedicated Impact Capital initiative in 2010 with the aim of preparing social enterprises to move beyond philanthropic grants to attract private investment capital. Early work culminated with the release of a white paper, Coordinating Impact Capital in the summer of 2011.
John Kohler recently presented on the Demand Dividend concept at SOCAP12 in San Francisco on October 3, 2012. Visit John's SOCAP12profile for more information.
Taking the VC out of the Valley
Successful demonstration of a Demand Dividend investment vehicle will create ‘economic pull’ by delivering what impact investors do not readily achieve today: moderate to high return with a more-rapid capital cycle.
CSTS has received expressions of interest from 11 impact funding sources and, with demonstrated success, will encourage these funds, as well as its many fund contacts through ANDE, Toniic, Oxfam and its Silicon Valley network, to use the Demand Dividend. The Center also will be co-leading an examination on alternative investment being conducted at the University of Michigan Law School, which will be instructive to the Argidius-ANDE Finance Challenge results.
About the Center for Science, Technology, and Society
The mission of the Center for Science, Technology, and Society is to accelerate global, innovation-based entrepreneurship in service to humanity. Through an array of programs including its signature Global Social Benefit Incubator (GSBI™), the Center engages an international network of business, investment capital, and technical resources to build the capacity of social enterprises around the world. As a Center of Distinction at Santa Clara University, the Center leverages its programs to inspire faculty and students with real-world case studies, distinctive curricula, and unique research opportunities, advancing the University's vision of creating a more just, humane, and sustainable world. More information atwww.scu.edu/socialbenefit
Deborah Lohse | SCU Media Relations | email@example.com |
Erin Berkenmeier | CSTS | firstname.lastname@example.org |
Thursday, Aug. 2, 2012
This article was originally posted in the Forbes Blog. You can view the original article here.
The following guest post is by Al Bruno, cofounder of the Global Social Benefit Incubator and the William T. Cleary Professor in Santa Clara University’s Leavey School of Business. He is also the founder of the school’s Center for Innovation and Entrepreneurship.
For the past decade, my colleagues and I have helped more than 150 social entrepreneurs from all over the world hone their business plans, which they are able to pitch for 15 exhilarating minutes to Silicon Valley financiers and executives. Through our ten years running this mentoring program, called the Global Social Benefit Incubator, we’ve culled some top tips for anyone looking to develop their business plan and pitch it to potential funders or partners:
1. Prove that you know how your customers make decisions. Virtually every social venture we counsel asks its customers to change entrenched behaviors and make a different decision for spending their precious dollars: to pay for clean water instead of making do with dirty water; pay a few pennies for sanitary pads rather than stay home five days a month; invest in clean solar lights that initially cost more than toxic kerosene. Understanding how such customers or beneficiaries decide to spend – or not spend – can be one of the biggest challenges for any kind of venture. What will prove persuasive to get them to change? What evidence do you have that they will change?
2. Understand how your product or service works on a per-unit basis. To grow and thrive, you need to be able to “scale up” the value you bring to your current customers or beneficiaries. This requires a clear understanding of your marginal costs – how much it will cost to produce the next unit – and the prices that your customers are willing to pay. Typically this means adding in costs to expand production and distribution (which many entrepreneurs forget to factor in) in a way that grows the bottom line.
3. Document your key assumptions and provide a plan for testing them. Experienced funders and partners will want to test the assumptions that you make about customer buying behavior, markets, financing, etc. Do the work for them by setting metrics that can be tracked. India-based Naandi Foundation projected it could sell clean drinking water to 40 percent of its target market. To test that, Naandi employees who educate consumers on clean water’s benefits were enlisted for market research. They learned that customers wouldn’t travel to far-away water kiosks, so they added a bicycle delivery service – enabling them to exceed rather than miss their target.
4. Don’t overlook the “packaging” of your presentation, and be strategic with story-telling. Of course, the content of your business plan and presentation matters most, but packaging is more important than you think. Your audience is human, and you must use persuasion to get them on board. Utilizing video clips, “neat” graphics and a compelling – though not overdramatized – story of one beneficiary or group can grab the audience far better than a dry recitation of facts.
5. Be honest— even if you see opportunity slip away as a result. The starting point to being successful is to be brutally honest with yourself and with the stakeholders in your venture. While hyping the size of your target market to epic proportions may seem necessary to catch a funder’s attention, failing to live up to that hype during the diligence period can burn that bridge and many more. Be restrained and conservative in your projections — such as by overstating your expected costs and expenses, and understating your expected revenues — rather than the opposite.
6. Target and time your requests for funding to significant milestones in the evolution of your organization. A recent report indicates that one major “social impact” investing fund, the Acumen Fund, looked at more than 5,000 opportunities in the past 10 years and invested in only 65 of them. Why? The social entrepreneurs did not understand the business stage and maturity that Acumen seeks before it makes an investment. Do your research to pick the right prospective funders — be they grant-makers, equity investors, or lenders – and time your request at the appropriate stage of your corporate growth. And remember that what you have accomplished to date is history. What you hope to accomplish with the contributed capital is what is important to your funder.
7. Emphasize that you’ve built a strong team and organizational infrastructure—or show how you plan to achieve that vital goal. Funders and partners know that having capable people in key roles is critical to your success. Unfortunately, developing countries often can’t supply the key team members or qualified employees you need to scale. India-based Husk Power Systems (a GSBI alumni company) has addressed this problem by forming its own training entity— Husk Power University— to train the workers it needs to staff the 75 + power plants it currently operates, and to provide employees for future needs such as its move into Africa.
8. Show how you use or plan to use partnerships and alliances. Forming strategic relationships with other organizations can be a means to add complementary products or services, stretch scarce resources, or access markets through otherwise-inaccessible distribution channels. Another GSBI alumni company, Hapinoy, partners with the largest microfinancier in the Philippines to provide financing for its network of rural retailers, and teams up with local bus drivers to deliver essential goods to remote locations.
9. Build in governance and oversight into your plan. It is critical that you have strong oversight and governance to ensure appropriate and objective decision-making. Not only can external participants, such as board members, add useful insights to your thinking, but they also can reassure investors that there is an additional set of eyes and minds at work protecting their money from risk.
10. Be a feedback fiend. In addition to getting feedback from customers, expose your ideas and thinking to trusted advisors, mentors and investors to refine your pitch. Most importantly, listen to their comments, observations, and criticisms so you can address them in your next pitch. You must demonstrate that you have anticipated key concerns and have thought through the issues.
Want to see all this in action? Come hear about innovation that can change lives at the GSBI 2012 business plan presentations on August 23, 2012 in the Mayer Theatre at Santa Clara University. For more information, see http://www.scu.edu/socialbenefit/entrepreneurship/gsbi