GR Engineers Social Impact Slides 7 17 09

8/8/2019 GR Engineers Social Impact Slides 7 17 09

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Social frontiers / Fund raisingGanesh Rengaswamy

E4SI July 19th 2009


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The Unitus Family of Social Enterprises

Unitus Founded 2001

501(c)3 organization Offers advisory services to

high potential, early-stageMFIs at little to no cost

Provides pre-commercialcapital, capital advisory,strategic business counsel, &operational consulting

Offices in Seattle, WA,

Bangalore, India, and Nairobi,Kenya (May 2009)

Employees: 38

Unitus Founded 2001

501(c)3 organization Offers advisory services to

high potential, early-stageMFIs at little to no cost

Provides pre-commercialcapital, capital advisory,strategic business counsel, &operational consulting

Offices in Seattle, WA,

Bangalore, India, and Nairobi,Kenya (May 2009)

Employees: 38

Unitus CapitalFo

unded 2008 Financial advisory firm specializing in arranging

capital forMFIs & othersocial enterprises

Offers debt and equity arranging, as well as otherrelated services

Based in Bangalore, India

Employees: 12

Unitus CapitalFo

unded 2008 Financial advisory firm specializing in arranging

capital forMFIs & othersocial enterprises

Offers debt and equity arranging, as well as otherrelated services

Based in Bangalore, India

Employees: 12

Unitus Equity Fund(s) Founded 2006

Professionally managed private equity fundmanaged by ElevarEquity LCC

Invests in early-mid stage MFIs & othersocial

enterprises 2 funds raised ($24M UEF I and $75-125M UEF II)

Offices in Seattle, WA and Bangalore, India

Employees 11

Unitus Equity Fund(s) Founded 2006

Professionally managed private equity fundmanaged by ElevarEquity LCC

Invests in early-mid stage MFIs & othersocial

enterprises 2 funds raised ($24M UEF I and $75-125M UEF II)

Offices in Seattle, WA and Bangalore, India

Employees 11

Non-profit For profit


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Unitus Overview

What We Do:Fight global poverty by increasing access tomicrofinance

> Unitus, an international nonprofitorganization, fights global poverty byaccelerating the growth of microfinance

where it is needed most.

Our Strategy:Promote growth and innovation in the worldshighest potential MFIs

> Select and partnerwith early-stage, high-

potential microfinance institutions around theglobe.

> Provide the technical and financial supportthat enables MFIs to grow faster, reachingmore of the worlds poor.

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Global Reach

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How Unitus Accelerates MFI Growth

Capital

Capital

Provide or facilitate

access todebt capital &equity investments

Capacity-buildinggrants forstartups

Help nonprofit MFIstransform toregulated

financial institution

Capacity

Capacity

Growth-focusedconsulting

Strategic planning

Technology/MIS systemsOperational efficiency tools andengagements

Human resources

Network opportunities

Conferences, meetings, andpublications

Resources to connect partnersand cross-pollinate bestpractices

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The Unitus Effect

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.Social performance management (SPM)An institutionalised process which involves setting clearsocial objectives,monitoring and assessing progress towards achieving these, and using thisinformation to improve overall organisational performance.

Goal of SPM at UnitusAssess MFI partners current social performanceIncrease adoption of industry standards and toolsTrain partners to use tools sustainably to monitorand enhance effectiveness

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Social Performance Management (SPM)

Important Next Step in Microfinance


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Unitus: Leveraged Approach to SPM In IndiaMarket Need

>

Industry has coalesced around standards butadoption has been slow particularly in India -which has lagged behind othermarkets like Africaand Latin America

> In the current economic crisis, MFIs should exploreSPM as a way to differentiate themselves toincreasingly sophisticated investors and clients

> MFIs want clear instruction on how to implement

SPM with minimal hardship

Unituss Value Proposition

> Geographic depth: 14 MFI partners serving >6 millionclients in India

> Demonstrated ability to translate industry experienceinto tactics that can be adopted by ourpartners

> Commitment to increasing adoption of industrystandard tools, Grameen PPI and Cerise SPI

> Talented networkof MFIs to share best practices

> Experience infield with partners to define, pilot, andimplement operational changes

IIRMIIRM

Unitus

SwadhaarSwadhaar

MYAMYA

SKSSKS

EquitasEquitas

GVGV

Grameen KootaGrameen Koota

UjjivanUjjivan

AdhikarAdhikar

BandhanBandhan

AjiwikaAjiwika

MimoMimo

SamhitaSamhita

GVGV

IIRMIIRM


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Ultra Poor Initiative (UPI)

Pre-microfinance population

Two year initiative supported by US foundation

focused on BOP bottom of pyramid in urban and

rural populations in N. India

Considered pre-microfinance

Working with three partners on three phased

approach:

Stabilize food source and housing

Introduce 2 to 3 sustainable livelihoods

Observe and support with tertiary services (health

and hygiene, education, etc)

After two years, if program deemed successful,

determine best way to proceed

Share findings with industry

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Strategic counsel & advice

Go-to-market strategyRefine vision and goal, businessmodel, use cases, direct/indirect

Outcome optimisation

RecruitingSeniormanagement, sales, advisoryboard

Early Stage Funding:

How Investors Should Add Value

Business development

partnerships

Trusted service provider

relationshipsSearch / recruiting, branding / PR,finance, etc.

Profile and PR

Knowledge / contacts


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Reasons for Social Enterprises to Raise

Institutional Funds

Opportunity: Size,

Scale

Unique Concept or

Social gap

Passionate

Founding Team

Pre-conditions for consideration

Intense

competition

likely

Need to move

rapidly

Implications

Hiring

Strategy

Funding should support

Rapid Product

Development

Scalability

Go to market

Sustainability

Source: Ben Holmes VC presentation

Opportunity:

Sustain,

impediments


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Typical Investment Criteria

Target ownership

Board representation and Voting rights

Liquidation Preference

Participation rightsDepending on round of funding and organization stage

Certain control and veto rights (if needed)

Option PoolFormanagement/employees

Period of exclusivity to close legal/diligence


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Criteria for MFIs to Consider Investors

Has funds

to invest

Match of

Size/Stage/

Geography

Relevant

focus/ability

to help

No directly

competitive

investments

Team track

record

Shortlist


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When NOT to raise Institutional capital

Tactical feature

not

Product opportunity

Market need is

relatively small

Motivation is social

But no ability to

deliver returns

Risk is not that you waste time unsuccessfully trying to raise

finance

real danger is that you do succeed in raising funds

Lose the opportunity to build what you want to

Lose control of yoursocial and organizational mandates / mission

Get bound in to 5+ yrs of work you may not enjoy

Source: Ben Holmes VC presentation

Documents

GR Engineers Social Impact Slides 7 17 09