We often hear from entrepreneurs about the challenges they face during fundraising. To help entrepreneurs, especially those working in the mobile-enabled energy, water and sanitation services, better understand the investment landscape, the Mobile for Development (M4D) Utilities team curated the Investor Roundtable webinar series.
As part of this series, we conducted three webinars, each focusing on a specific type of funder, from foundations and impact funds to crowdfunding platforms. During the webinars, funders gave an overview of their investment process, mandate and their considerations when evaluating a potential investee, and we’ve wrapped this into a few key take-aways.
Three tips for your fundraising journey:
1. Know your investor – each funder has a unique mandate and value proposition.
Almost all investors and funders have clearly defined investment mandates. These mandates define their focus areas in terms of region, sector, deal size, stage of investment, and their return expectation among other aspects.
During the webinars, the presenters shared their organisations’ mandates and explained that they look for organisations that closely align with their focus.
2. Get your financials in order – impact is a qualifier not a guarantee for investment.
Different types of investors have similar investment processes. As noted above, the first step for almost all the investors was assessing ‘fit’ with their focus areas as well as the potential impact.
The next step is to delve directly into the financials and business model assumptions. Across different funders, almost half the duration of the investment process was spent conducting due diligence. Getting papers and documents in order from the outset should streamline the process and avoid obstacles.
Several entrepreneurs voiced concerns that commercial viability and social impact were sometimes conflicting. However, across the different webinars, the presenters emphasised that having commercial viability and social impact were essentially the same and without commercial sustainability, the business’s social impact could not be scaled.
3. Team trumps all – while technology, business model or first mover advantage or challenge are all considerations, management is a key criterion
The presenters were excited about the opportunities that technology, and specifically mobile technology, presents. However, they cautioned that businesses are evaluated as a whole and not just as a technology.
A number of presenters mentioned that the quality and strength of the founders of the business and its management team are a key criterion when evaluating a company. Moreover, having a strong team with experience and expertise, especially in understanding the local context, is highly valued. Presenters noted that the ability of the senior team to delegate and pivot is key to the scale and growth of the business.
The GSMA M4D Utilities Fund awards grants to trial or scale mobile-enabled utility services in underserved communities. Please sign up for our newsletter to receive updates.
Who attended the webinar series?
The webinar was predominantly attended by start-ups, making up 67 per cent of the attendees across the series. The energy sector dominated the sectoral break-up and Sub-Sahara Africa led attendance regionally. What was most telling was that more than 90 per cent of the attending start-ups were looking to raise funds.
If you’re an investor or funder, we would be happy to share the list of organisations looking to raise funds – please email Charu Chadha.
Based on the feedback received, attendees found the content valuable as it presented information not readily accessible online. Moreover, hearing from the funders directly instead of third parties was appreciated. Finally, having a standard format across the series helped legibility and comparisons between funders.
The recording and slides of the webinars are available as follows.
1. Investor Roundtable: Foundations
- Erin Crossett, Portfolio Manager, Development Innovation Ventures
- Josephine Ragni, Social Investment Manager, Fundación Netri
- Charlotte Ward, Senior Partner, COO, AHL Venture Partners
2. Investor Roundtable: Impact Funds
- Sean Moore, Associate Director, Portfolio, Acumen
- Tat-Seng Chiam, Investment Director, Global Innovation Fund
3. Investor Roundtable: Funding Platforms