Entrepreneurs often say that capital, or lack of it, is the biggest obstacle to business growth and cause of enterprise failure. In reality, there is much more to it.
The new cohort of 18 social enterprises (SEs), from 11 countries around the globe, is arriving to Silicon Valley next week for the 16th annual Global Social Benefit Institute (GSBI®) In-Residence accelerator program. The goal for the SEs is to refine their capitalization and scaling strategy, connect with investors, and present them with exciting opportunities.
The SEs in this year’s cohort are working on a variety of solutions–from last-mile distribution of essential goods in Sierra Leone, to preventing newborn deaths in India, to improving earnings potential and livelihoods of smallholder farmers in Zambia.
Since February, these entrepreneurs have been working with experts and mentors to hone in their business models, growth plans, and capital needs, in order to scale their businesses and impact. As many entrepreneurs observe, much of their efforts come down to raising capital – identifying the different types of capital available to their business, the best way to deploy it within the company to position it for success, and the kind of expectations they can set for investors in getting a return on their capital (an impact and/or financial return).
In turn, an enterprise that has a clear and attractive business model, impact, and a Justifiable Ask is more likely to obtain the needed capital quickly and have investors knocking on their door. It is most often not about connections, but rather about attractiveness of the business to an investor, a reasonable capital ask given the enterprise needs and what it can deliver in return, and a thoughtful approach to the right partners.
The Global Social Benefit Institute (GSBI®) In-Residence Accelerator program has a comprehensive approach to investment preparedness that aims to help entrepreneurs put their best foot forward in attracting the right type of capital for their businesses.
When we talk about a Justifiable Ask, we think about the interrelation between these key items:
- Growth strategy and strategic initiatives,
- What resources are needed to achieve these,
- How much capital do those resources translate to and over what time horizon that capital would be deployed,
- The return the company may be able to provide an investor given their financial performance to date, the potential of the business (forecast) and the inherent risks,
- The type of capital that is available and appropriate given the aforementioned factors.
By helping develop, then reviewing financial models, we help identify gaps and challenges that an investor may see–often pushing back on how realistic assumptions are, what key drivers of growth, profitability and cash flow may be, and help entrepreneurs paint a clearer picture of their growth opportunity, effect of capital infusion and return potential for that capital to investors.
During the ten-day In-Residence at Santa Clara University, the entrepreneurs are grilled on various topics related to their business with specific feedback on operations, impact metrics, internal finances, and growth strategy, among other topics. Although that feedback is sometimes difficult to receive as the panelists may shoot down exciting ideas, question reasoning or a new strategy, this exercise helps the entrepreneurs develop much stronger cases for their conversations with potential investors and partners. The SEs, with support of their mentors, then have to build the adjustments resulting from the feedback into their forecast and translate it to their capital need.
The result of the process, is an inspiring group of enterprises with diverse business models, working across the world towards solving important social and environmental challenges in their communities and globally. Their capital needs are as versatile–from debt and equity to convertible notes and blended capital needs, including grants, debt and equity, to innovative structures such as a Security Token Offering (STO) and revenue sharing mechanisms.
You can see these entrepreneurs present their vision to scale and create a lasting impact on the world on Wednesday, August 15 at the 2018 GSBI Investor Showcase or via live stream, hosted by Miller Center for Social Entrepreneurship. If you are an investor and would like to schedule a private meeting after the Investor Showcase or connect online with any of the SEs, don’t hesitate to contact us!
Anastasiya’s expertise is in providing catalytic capital and advice on financial strategy to businesses ranging from early stage start-ups to multinational corporations. While Anastasiya serves as Miller Center’s GSBI Funding Facilitation Lead, she also actively manages a consulting practice supporting scaling social enterprises in raising capital, and investors in evaluating and structuring deals.
Prior to starting her consulting practice, she was the Director of Investor Relations & Financial Innovation at Agora Partnerships–facilitating over $50M in capital flow to social enterprises in Latin America and designing new funding programs. She is also a former Portfolio Manager of RSF Social Finance, a US-based impact investor with $100M AUM. Anastasiya began her career in Corporate & Investment Banking at Wells Fargo in San Francisco and New York City, providing capital markets advisory and other financial services to a portfolio of Fortune 500 corporates.
Anastasiya holds a Master’s in International Finance and Economic Development from the Barcelona Graduate School of Economics, and a B.S. in Finance from Santa Clara University. She is originally from Ukraine and enjoys visiting friends around the world, dancing, yoga, and rock-climbing.