Accelerating Impact: Exploring Best Practices, Challenges, and Innovations in Impact Enterprise Acceleration

Accelerating Impact
Exploring Best Practices, Challenges, and
Innovations in Impact Enterprise Acceleration
February2015
Funded by:
Authored by:

Contents
Definitions and Acronyms..............................................................................................................................1
Introduction ....................................................................................................................................................2
The Evolution of Solutions.......................................................................................................................2
Why Focus on Impact Accelerators? ........................................................................................................3
The Rockefeller Foundation Impact Enterprise Project.............................................................................3
Objectives of this Report.........................................................................................................................4
Insights around Impact Enterprise Acceleration...........................................................................................5
Key Needs of Impact Enterprises .............................................................................................................5
Typical Accelerator Support for Impact Enterprises..................................................................................8
Best Practices for Accelerating Impact Enterprises...................................................................................9
Common Impact Accelerator Challenges................................................................................................12
Case Studies on Innovative Accelerator Models.........................................................................................15
1. Unreasonable Institute......................................................................................................................16
2. Village Capital ...................................................................................................................................25
3. The Social Franchise Accelerator: Bertha/ICSF/Franchising Plus..........................................................34
4. African Management Initiative ..........................................................................................................42
5. Shujog...............................................................................................................................................48
Summary Analysis of Survey Data..........................................................................................................56
Conclusion.....................................................................................................................................................57
Collaboration Holds the Key to Market Evolution...................................................................................57
Closing Remarks....................................................................................................................................58
Appendix 1: List of Additional Shujog Programs.........................................................................................59
Appendix 2: List of Global Impact Accelerators...........................................................................................61
Acknowledgements and Disclaimers...........................................................................................................63

1
Definitions and Acronyms
Social
Enterprise
A form of hybrid organization thatpursues a social mission usingbusinessmethods
Source: Stanford Social Innovation Review
Impact
Enterprise
An organization thatintentionally seeks to grow and sustain financial viability,realizeincreasingsocial impact,
and influence the broader system in which they operate
There are two concepts that set impactenterprises apartfrom standard social enterprises:
Enterprises must be scalable: It is essential to expand the reach and targeted impact of each initiative,as well as
the ability to absorb the capital needed to grow activities.Expandingthe scalealso leads to organizational
complexities that need to be addressed (i.e., what is needed to accommodate a larger organization with a more
expansivereach)
Enterprises intentionally contribute to systemic change: Impact enterprises catalyzechanges in the attitudes
and views of the government, civil society,and privatesector, changingthe way markets respond to the new
way of doing business and changingtheway people respond to these shifts
Source: The Rockefeller Foundation
Impact
Accelerator
Any intermediary organization or platformworkingto scaleimpactenterprises by providing supportfor
multipleimpactenterprise needs
Source: The Rockefeller Foundation and Monitor Deloitte
Impact
Investments
Investments made into companies,organizations,and funds with the intention to generate social and
environmental impactalongsidea financial return
Source: the Global Impact Investing Network (the GIIN)
Impact
Investor
Any organization actingin its capacity as an investor to intentionally generate social and/or environmental
impactalongsidea financial return
Source: the Global Impact Investing Network (the GIIN)
ACTS Assistancefor Capacity-Buildingand Technical Services
ANDE Aspen Network of Development Entrepreneurs
AMI African Management Initiative
GIIN Global ImpactInvestingNetwork
HR Human Resources
ICSF International Centre for Social Franchising
IE Impact Enterprise
IT Information Technology
MOOC MassiveOpen OnlineCourse
TAP Technical AssistanceProvider
SE Social Enterprise
SSA Sub-Saharan Africa
UCT GSB University of Cape Town Graduate School of Business
UK United Kingdom

Introduction
2
Introduction
The Evolution of Solutions
The worldfacestremendoussocial andenvironmental problems. Despiteglobal economicgrowth,
1.2 billionpeoplestillliveinextreme poverty.1
More than1.5 millionchildrenunderfivedie from
diseasesthatcouldbe preventedbyexistingvaccines.2
One-fifthof the world’spopulationfaces
waterscarcity.3
More moneywill be neededtoaddressthese issuesthanphilanthropic
organizations andgovernmentshave attheirdisposal. Recognizingthischallenge,theyare seeking
innovative ideasthatleveragetheirresources.Atthe same time,private sectoractorsare bringing
market-basedsolutionstothe space,as theylooktogenerate profitsalongside social impact.
Workingtogether,these differentactorscansuccessfullydeliverinnovative,market-based
solutionsthataddressthe problemsfacingpoorandvulnerable peopleglobally.
An impactenterprise isone suchpromisingsolution.Impactenterprisesare organizationsthat
intentionallyseektogrowandsustainfinancial viability,realizeincreasingsocial impact,and
influencethe broadersysteminwhichtheyoperate.4
Collectively,theyhave the flexibilityneeded
to adapt to the changingdynamicsof problemsandcandeliverinventive andtimelysolutions.
The challenge isthatmanyimpact enterprisesare successful ata small scale,withinalocal
context, butcannotincrease the size of theiroperationsto expand theirimpact.Astheyattempt
to scale,theyoftenstruggle toreachmore customers,attract talentedhumancapital,obtainthe
righttypesof funding,andaccessthe technical expertisethatcanhelpthemadapttheirbusiness
modelsateach stage of development.5
Impactinvestorsare interestedinsupportingthese
enterprises,butoftenhave trouble findinginvestment-readyimpactenterprisesthatdonotneed
significantbusinesssupport.6
The RockefellerFoundationhasbeenone of the foremostchampionsof impactinvestingsince its
inception.In2013, it beganfocusingmore onthe “demandside”of the impact investingfieldand
examinedthe challengesforimpactenterprisesmore closely.The RockefellerFoundation
recognizedthe struggle enterprisesface whentryingtoscale andchose to supportintermediaries
that could helpenterprisesexpandtheirimpactandincrease the positivebenefitsforpoorand
vulnerable populations.These intermediariesare often calledimpactaccelerators.7
1
United Nations Millennium Development Goals
2
UNICEF
3
UNDESA Water Factsheet on Water Scarcity
4
Definition of an impact enterprise as defined by The Rockefeller Foundation. There are two concepts that set impact enterprises apart from standard social
enterprises. One distinction is that impact enterprises must be scalable: it is essential to expand the reach and targeted impact of each initiative, as well as
the ability to absorb the capital needed to grow activities. Expanding the scale also leads to organizational complexities that need to be addressed (i.e. what
is needed to accommodate a larger organization with a more expansive reach.) The second distinction is that impact enterprises intentionally contribute to
systemic change: changing the way markets respond to the new way of doing business, and changing the way people respond to these shifts. Impact
enterprises catalyze changes in the attitudes and views of the government, civil society, and private sector.
5
Grimm, Daniel, Mike Kubzansky, and Kurt Dassel. Enabling Conditions for the Growth of Impact Enterprises: Observations from the Field. Working paper.
Monitor Group, 2012 with support from The Rockefeller Foundation.
6
An impact investor is any organization acting in its capacity as an investor to intentionally generate social and/or environmental impact alongside a
financial return. Definition of an Impact Investor as defined by the Global Impact Investing Network (the GIIN). Source for statement: Koh, Harvey, Ashish
Karamchandani, and Robert Katz. From Blueprint to Scale: The Case for Philanthropy in Impact Investing. Rep. N.p.: Monitor Group, 2012. Print. Produced by
Monitor Group in collaboration with Acumen Fund. Created with funding from the Bill & Melinda Gates Foundation.
7
In this report, the term accelerator refers to any intermediary organization or platform working to scale impact enterprises by providing support for
multiple impact enterprise needs

Introduction
3
Why Focus on Impact Accelerators?
Acceleratorsoffer impactenterprisessupportacrosstheirspectrumofneedsasthey seek to scale
There are several differentplatformsthatcansupportenterprisesastheygrow.Many focus on
justone of the myriad of challengesthatface enterprises.Forinstance,impactinvestmentfirms,
challenge funds,grant-makingorganizations,andcrowd-fundingplatformsall addressfinancing
needs butrarelysupportenterprisesinrefiningtheirbusinessmodelsorestablishingrelationships
withpartners.Conversely,social entrepreneurshipschoolsandsocial venture networksprovide
enterpriseswiththissupport,buttheyoftendonothelpwithfundingorwithestablishinga
rigorousmonitoringandevaluationsystem.8
Acceleratorsfocus notjustona single issue but
typicallyaimtosupport a broad spectrumof impactenterprise needsastheyseektoscale. This
supportisprovided throughanarray of resourcesandservices,offeredbothby accelerators
themselves andthrough theirnetworks.
A fewindicativestudieshighlight the potential promise of the acceleratorapproach.A studyby
Syracuse Universityexamined950 businessaccelerators/incubatorsoperatingfrom1990-2008 and
foundorganizationsthatgraduatedfromanaccelerator/incubatorhadslightlyhigheremployment
growthand salesgrowth versus un-incubatedbusinesses.9
Similarly, astudyfromthe Universityof
Cambridge foundthatacceleratorstendtoincrease survivorship ratesof start-uporganizationsby
10-15% by yearfive.10
Overthe past several years,anumberof incubatorsandacceleratorsfocusedspecificallyon
impactenterpriseshave emerged.Ina2013 landscapingexerciseconductedbyThe Rockefeller
FoundationandMonitorDeloitte, more than 160 of these “impactaccelerators”were foundjustin
the UnitedStates,Sub-SaharanAfrica(SSA),andSoutheastAsia. The average age of the
acceleratorssurveyed throughthiswork waslessthan five years.
There is a need for more knowledgesharingand understanding ofbestpracticesamongstimpact
acceleratorsand thebroadercommunity
Giventhe nascentnature of thisfield,many impactaccelerators have focused primarilyoninternal
operationsthusfar.Theyare concernedwith refiningtheirbusinessmodels - developingthe right
configurationof services andidentifyingthe bestwaytodeliverthose servicestoimpact
enterprises.Asaresult,theyoftendonothave time to share lessonslearnedwithpeers,andthus,
manyacceleratorsundergothe processof evaluatingandadopting(ornotadopting) the same
curriculumor servicessimultaneously.Industryexpertsandacceleratorsare increasingly
recognizingthattheyfrequently“re-inventthe wheel.”Asthe industrymatures,there isaneedto
betterunderstandbestpracticesandpromisingnew innovationsinimpactacceleration.Thisisthe
basisof The RockefellerFoundationImpact Enterprise Project.
The Rockefeller Foundation Impact Enterprise Project
Overthe past year,The RockefellerFoundation,inconjunctionwith itsgrantee MonitorDeloitte,
soughtto identifybestpracticesandinnovativenew ideasforscalingimpactenterprises.There
were several phasesof workunderthis project.The firstphase focusedonunderstandingthe
needsof impactenterprisesastheyseektoscale.Inthe secondphase,the teamconducted
primaryand secondaryresearchanddevelopedalandscape of more than 160 impact accelerators
8
More details on the various types of intermediaries that provide people, expertise, and networks can be found in the following report: Shanmugalingam,
Cynthia, Jack Graham, Simon Tucker, and Geoff Mulgan. Growing Social Ventures. Rep. London: NESTA, 2011. Print.
9
Amezcua, Alejandro S., "Boon or Boondoggle? Business Incubation as Entrepreneurship Policy" (2010). Public Administration - Dissertations. Paper 80.
10
Birdsall, Michael, Clare Jones, Craig Lee, Charles Somerset, and Sarah Takaki. Business Accelerators: Th e Evolution of a Rapidly Growing Industry. Rep.
N.p.: U of Cambridge, Judge Business School, 2013. Print.

Introduction
4
inthe UnitedStates,Sub-SaharanAfrica,andSoutheastAsiato understandboththe typical
supportacceleratorsprovide forimpactenterprisesaswell aspromisingnew practices. Tohave a
greaterimpacton poor andvulnerable populations,the nextphase encouragedfurtheraccelerator
experimentationbygivinggrants toorganizationstestinginnovative new models.Grantswere
giventofive organizations:AfricanManagementInitiative (AMI),the Social FranchiseAccelerator,
Shujog,Unreasonable Institute,andVillage Capital. Overall,thisworksoughttodeepenand
disseminateknowledge inthe impactacceleratormarket.
Objectives of this Report
Summary ofReport: Thisreportprovidesanoverview of the findingsfromthe project,describing
bestpracticesand challengeslearnedfromacceleratorsthemselves,whilealso summarizing
promising,yetunproven,innovationsthatare currentlybeingtestedbyThe Rockefeller
Foundationgrantees.
Audience& Intended Purpose: The aimistogive accelerators,researchers,andfundersa
qualitative understandingof “whatworks”and “whatis promising”inacceleratingimpact
enterprisesand tohighlightthe keychallengesthatmustbe addressedbyall stakeholdersinorder
for the fieldtocontinue togrow.
Althoughthere iscertainlyaneedformore quantitativevalidation of the findingsinthisreport as
the fieldcontinuestomature,these insightsreflectthe leadingqualitative thinkinginimpact
accelerationtoday.

Insights around Impact Enterprise Acceleration
5
Insights around Impact Enterprise
Acceleration
Key Needsof ImpactEnterprises
In orderto understandwhattype of acceleratorsupportisbeneficial toenterprises,itisimportant
to firstunderstandthe needsof enterprisesastheydevelopandgrow theirbusinesses.Thus,The
RockefellerFoundationandMonitorDeloitteteambeganthisresearch projectbyidentifyingthe
eightdiscrete needsorstepsthatimpactenterprisesfollow in ordertogrow theirorganizations.
These are listedbelow.
Exhibit1: Eight Scaling NeedsofImpact Enterprises
1. Market Research: Researchandanalyticson marketdynamics,relevantpolicies,customers,
and potential competitors.Thisresearchinformsandshapes the developmentof business
strategy.
2. Business Development and Strategic Planning: Businessstructuresandstrategiesthatenhance
the performance andimpactof the enterprise.Thiscategoryincludesall the needsof an
impactenterprise astheyestablishanddeveloptheirbusiness,suchasthe procurementof
physical office space,establishmentof back-office functions (suchasinformationtechnology
(IT) supportand humanresources(HR)),recruitmentof humancapital,andanylegal support.
In addition,thiscategoryincludesthe development of abusinessplanandongoingbusiness
strategy.

6
3. Financing:Seedfunding;fundsforongoingoperations,suchasequipment,raw materials,
marketing, andinventory;andfundsforexpansion.
4. Supply Sourcing and Production: Sourcingof raw materialsandproductionof goods.
5. Salesand Marketing: Promotionandsalesof goodsorservices.
6. Distribution and Market Access: Accesstoappropriate distributionchannels - bothindividuals
and organizations - toreach targetmarketsand consumers.
7. Monitoring and Evaluation:Performance andimpactmetricsof the enterprise thatprovide
insightsonhowto adjustandoptimize the businessmodel.
8. Leadership Skills and Business Acumen:Leadershipandbusinessskillsof the enterprise team—
thiscomponentisthe core of the enterprise andsupportssuccessinall otherareas. It
addresses the inherentqualitiesthatmake animpactenterprise leadernotjusta social
visionary,butalsosomeone whohasthe skillstocommercialize anidea andperformbasic
managementtasks, suchasconductingmeetings, overseeingemployees,andcoordinating
disparate workstreams.
As an impactenterprise grows,itwillrepeatthe cycle and gothroughthese eightstepsagain,but
withnuancedneedsdependingonthe stage.Forinstance,anearly stage companywill focuson
developingthe rightbusinessplanandgettingseedfundingwhile amore mature companywill
needtorefine itsstrategyonan ongoingbasisandsecure growthcapital.

Case Studies on Innovative Accelerator Models
7
Common Challenges as Impact Enterprises Seek to Scale
Basedon primaryand secondaryresearch,fouroutof the eightkeyneedsappeartobe
particularlychallengingforenterprisesastheytryto increase theirscale andimpact.
Business Development and Strategic Planning: Enterprisesoftenstruggletoattract and retain
talent,particularlygivencompetitionfromthe private sector.Inaddition,the abilitytocontinually
adapt a businessplanorbusinessstrategiesisadifficultskillforentrepreneurstomaster,butis
absolutelyessential tothe growthof the organization.11
Financing: Availability of financing,
access to financing,highcostof
financing,andonerousfinancing
termsare all commonand difficult
challenges.12
Distribution and Market Access: Despite havingproductsorservicesthatwouldbe highly
beneficial topoorand vulnerable populations,impactenterprisesoftenlackaccesstosufficient
distributionchannelstoconnectwithnew marketsorcustomers,13
includingthe inabilityto
identifynew marketsanddetermine waysinwhichtoenterthem.
Leadership and Business Acumen: Developing
the skillsandbusinessacumennecessarytobe a
strongleaderandsuccessfullymanage abusiness
isa challengingprocessandisa crucial gap in
enablingsocial enterprisestoscale successfully.14
Charismaticfounderswithbrilliantideasare not
necessarilythe bestCEOs.Itisalsooftendifficult
for entrepreneursthatcome fromthe social
sectorto run theirorganizationasa true
“business”or“enterprise”inorderto ensure
successand,ultimately,impactontheirintended
beneficiaries.
11
Koh, Harvey, Ashish Karamchandani, and Robert Katz. From Blueprint to Scale: The Case for Philanthropy in Impact Investing. Rep. N.p.: Monitor Group,
2012. Print. Produced by Monitor Group in collaboration with Acumen Fund. Created with funding from the Bill & Melinda Gates Foundation.
12
2012. Print. Produced by Monitor Group in collaboration with Acumen Fund. Created with funding from the Bill & Melinda Gates Foundation;
Shanmugalingam, Cynthia, Jack Graham, Simon Tucker, and Geoff Mulgan. Growing Social Ventures. Rep. London: NESTA, 2011. Prin t; Haebig,
Manfred. Enablers for Change: A Market Landscape of the Indian Social Enterprise Ecosystem. Rep. Ed. Katherine Miles, Trina Datta, and Ernst and Young
Pvt. Ltd. New Delhi: Deutsche Gesellschaft Fur Internationale Zusammenarbeit (GIZ) GmbH, 2012. Print; Grimm, Daniel, Mike Kub zansky, and Kurt
Dassel. Enabling Conditions for the Growth of Impact Enterprises: Observations from the Field. Working paper. N.p.: Monitor Group, 2012. Print. With
support from The Rockefeller Foundation.
13
2012. Print. Produced by Monitor Group in collaboration with Acumen Fund. Created with funding from the Bill & Melinda Gates Foundation;
Shanmugalingam, Cynthia, Jack Graham, Simon Tucker, and Geoff Mulgan. Growing Social Ventures. Rep. London: NESTA, 2011. Print; Accelerating
Entrepreneurship in Africa. Rep. N.p.: Omidyar Network, 2012. Print. Developed in partnership with Monitor Group; Grimm, Daniel, Mike Kubzansky, and
Kurt Dassel. Enabling Conditions for the Growth of Impact Enterprises: Observations from the Field. Working paper. N.p.: Monitor Group, 2012. Print. With
support from The Rockefeller Foundation.
14
2012. Print. Produced by Monitor Group in collaboration with Acumen Fund. Created with funding from the Bill & Melinda Gates Foundation
“Socialentrepreneursstruggle to access
finance and face capital that is
inappropriately structured for their needs”
— ANDE, “Toward an Ecosystem for Early-Stage Incubation of Social
Enterprises in East Africa”
Most social enterprisesrequire
significantcapacity building and
training to attain the education,
skills, and access to information in
order to execute their business
plan.”
— GIZ, “Enablers for Change — A Market Landscape
of the Indian Social Enterprise Ecosystem”

8
TypicalAccelerator Supportfor Impact Enterprises
Acceleratorsupportforthe impactenterprise needshighlightedabove typicallyfallsintofour
categories. The mostcommontype of acceleratorsupportiscapacity buildingfor impact
enterprises.Acceleratorsoftenprovide formaltrainingorworkshopstoteachentrepreneurshow
to refine theirmodelandscale theirbusiness.Thiscaninclude specificcoursesregardingfinancing,
marketing,orbusinessplandevelopment.Many acceleratorsalsoprovideaccesstouseful
networksforenterprises - introducingthemtoinvestorsandotherfunders,potentialpartners,
suppliers,mentors,andcustomersandbeneficiaries.Insome cases,accelerators giveenterprises
resourcesdirectly,suchasfunding,office space,or probono services(suchaslegal services).A
selectnumberof acceleratorsare alsostartingto focuson buildingthe widerimpactinvesting
ecosystem.Thisincludesundertaking market-level interventions,suchasresearch,policy
advocacy,and customereducationto supportthe developmentof the broaderimpact investing
and impactenterprise environment.The graphicbelow providesanoverviewof the typical support
delivered byaccelerators,withthe sizeof eachcomponentrepresentingaqualitative assessment
of itsoverall prevalence amongstimpactaccelerators.
Exhibit2: Standard AcceleratorSupport Areas
Each acceleratortypicallycombinesandadaptsthese traditional supportpracticesintoaunique
configurationfortheirparticularmodel. Fromthe research,itisclearthat factors thatmake an
acceleratorprogramsuccessful are oftenchallengingtodeliver.The keyingredientsof success and
keychallenges inacceleratingimpactenterprises are highlyinterconnected.
In thisnextsection, bestpracticesandchallengesare discussedseparately,pullingfrom all of the
RockefellerFoundationImpactEnterpriseProjectgranteesaswell asthe broader impact
acceleratorlandscape, toprovide useful, high-level insightsforstakeholdersinthe field.Ineachof
the grantee case studies,however,bestpracticesandchallengesare combinedinto criticalsuccess
factors to highlightthe complex realityof implementationforindividual accelerators.

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Best Practices for Accelerating Impact Enterprises
Lookingacross the five granteesandthe broaderimpactacceleratorlandscape,anumberof best
practicesfor successfullyacceleratingimpactenterpriseshave emerged.These insightshave been
furthervalidatedthroughengagementwithfundersandresearchersinthe industryandshouldbe
useful foracceleratorslookingtoenhance theirownmodels,aswell asfundersseekingto
understandwhichpracticestosupport.Foreach bestpractice,some examplesof how the
individualgranteesimplementedthispractice are alsoincluded.More in-depthdiscussionsof best
practices,acceleratoroperatingmodels,keychallenges,andsoforthare providedinthe case
studies(found in thefollowing section).
1. Develop a localized or sector-specificmodel
As the impactacceleratormarketmatures,there isincreasingrecognitionthata one-size-fits-all
approach isnot effective.Marketdynamicsare highlyunique indifferentindustriesor
geographies,andthus itismostuseful togive enterpriseslessonsandresourcesthatare directly
relatedtotheirspecificniche.Acceleratorsare increasinglydevelopingcustomizedmodelsof
supportwithlocal or sector-specificcase studies,mentors,andinstructors.Customizedcase study
examplesenable entrepreneurstounderstandhow toapplygeneral lessonstotheirspecific
business,andcustomizedmentorscanbetterunderstandchallengesfacingentrepreneursand
provide more beneficialguidanceandconnections.
2. Build a strong ecosystemofsupport
No acceleratorcanprovide supportforall enterprise needsonitsown.Theymustbuildastrong
ecosystemof supportaroundthe enterprise — includingmentors,investors,andsector
stakeholders. Throughpartnerships,acceleratorscanprovide bettercurriculum, connections,and
expertiseonspecificgeographicorsectordynamics.Furthermore,these partnerswill remain
critical connectionsandavenuesof supportforentrepreneursastheygraduate fromaccelerator
programsand continue toscale.
3. Carefully screen impactenterprisesforappropriatefit
Dependingonthe type of support providedbyanacceleratorprogram, some impactenterprises
will benefitmore thanothers.Acceleratorsmustscreentheirapplicantstoensure anappropriate
fitwiththe program.A robust, up-frontscreeningprocessensuresimpactacceleratorscanbe
effectiveinprovidingsupportandpreventsimpactenterprisesfromwastingtime inaprogram
that addressesskillstheyalreadyhave orthattheyare not readyfor.
Example: Unreasonable Institute is replicating its North American-based program in emerging
market locations in order to enable impact enterprises in those regions to access more local
connectionsandmentorswithwhomtheycanforge longer-lastingrelationships(see pp. 16-24).
Example:Village Capital buildsasupportiveecosystemforitsproblem-basedprograms.Theseare
supportprogramsspecificallybuilt forenterprisesall tacklingaspecificproblem(suchasthe lack
of financial servicesforlow-income householdsinthe UnitedStates)fromdifferentangles.For
each program,Village Capitalestablishesrelationshipswithproblem-specificexperts,mentors,
and customers,fosteringadedicatedcommunitythathasboth the motivationandexpertiseto
helpenterprisesbecomesuccessful andachievescale (seepp.25-33).

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4. Develop a holistic model, but tailorsupportforindividualenterprises
Acceleratorsdistinguishthemselvesfromotherintermediariesbyofferingholisticsupportacross
multiple scalingneeds.Theyhave arange of resourcesandcurriculumfromwhichtheycandraw.
However,theyare increasinglytailoringthisholisticsupport tothe needsof individual enterprises
- takingthe customizedmodel highlightedabove one level deeper.Manyacceleratorsuse
competencyassessmentstounderstandenterprise strengthsandweaknesses.Withthis
understanding,acceleratorscanidentifythe aspectsof theirprogramthatwill be mostrelevantto
the enterprise andoptimizeresources accordingly — pairingimpactenterpriseswithspecific
mentorsandexpertsorprioritizingcoursesthatfocusonskill gaps.
5. Fostercollaboration amongstimpactenterprises
Impact enterprisesshare amotivationtoaddresscomplex socialandenvironmental issues.
Additionally,startingabusinesstoaddressthese issues involves commongrowthchallenges,
whichall impactenterprises face.This createsaunique opportunityforcollaboration.These
enterprisescanprovide highlyconstructive guidance totheirpeersgiventheiron-the-ground
perspective.Collaborationalsoallowsimpactenterprisestoshare bestpractices,make
connectionsforone another,andevenpartnertogether.
Examples:The Social Franchise Acceleratorhasa multistage applicationandinterviewprocess
to identifyorganizationsthathave the keyingredientstomake themsuitableforsocial
franchising(seepp.34-41). Suitable businessesare those withastrongmanagementteam,a
strongfinancial base thatcouldsupportthe initial costsof franchising,andstrongoperations
systemsthatcouldbe replicatedeffectivelybyfranchisees.Similarly,Shujog’sinnovative new
program hasa clearfocuson preparingenterprisesforcapital raising — aprocessthat should
occur afterthe initial developmentandtestingof abusinessmodel.If anenterpriseistooearly-
stage,the entrepreneurswilloftenbe toobusydealingwithdailyoperationalchallengesand
cannot focuson,or benefitfrom, lessonsaroundhow toraise capital.Therefore,Shujogfocuses
on more mature,investment-readyenterprises(seepp.48-55).
Examples:Each AMI membertakesacompetencyassessmentthatevaluatestheirexisting
businessandimpactknowledge.Uponcompletionof the assessment,membersreceive a
customizedlearningplanof specificcoursesthataddresstheirknowledgegaps(seepp.42-47).
Examples:AMI requiresitsmemberstoidentify“buddies,”whohelpthemstayontrack against
theirlearningplans.AMIalsohasonline discussionforumswhere impactenterprisescan
communicate andseekadvice fromone another(seepp.42-47). Village Capital has impact
enterprise peersinaspecificcohort publicallyreview eachother’sbusinessmodelstoenhance
constructive feedbackandlearning(seepp.25-33).

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6. Maintain long-termenterpriseengagement
The scalingprocessisoftenlongand arduous.Impactenterprisesmusttestnew ideas,fail,and
refine themovertime.Acceleratorsacknowledge thatprovidinglong-termsupportthroughthis
processisdesirable toensure enterprisesremainon trackwiththeirplans. Itisalsobeneficialto
provide newconnectionsforenterprisesastheirneedsevolve overtime.
Example:The Social Franchise Acceleratormentorsremainwithenterprisesthroughoutthe
time ittakesto developandtestaninitial franchise pilotinordertoprovide guidance asneeded
(seepp. 34-41). Similarly,UnreasonableInstitute mentorscommittosix monthsof supportafter
theirmainprogram,and a “lead”mentorperiodicallychecksinwithUnreasonableInstitute to
reporton progressandrequest additional supportandconnectionsasneeded(seepp.16-24).

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Common Impact AcceleratorChallenges
As highlightedabove,implementingsome of the bestpracticescanalso create challengesfor
impactaccelerators.Belowisanoverview of the commonchallengesthatface impactaccelerators
as theyseektosupportimpactenterprisesandscale theirimpact.Some potential mitigation
strategiesthatacceleratorsare currentlytestingare alsolisted,butatthispointintime,itis
unclearwhetherthese will be successful inovercomingchallenges.
1. Lack of awareness
The relative nascence of the impactacceleratormarketmeansmanyinvestors,impactenterprises,
and otherkeystakeholdersare unaware of theirbenefits.Thischallengeisespeciallyacute in
developingeconomies,where knowledge of eventraditional acceleratormodelsisnot
widespread.Thislimitedawarenessconstrainsaccelerators’abilitytoattractboth enterprisesand
relevantpartnerstotheirprogram.
2. Developing a sustainablefundingmodel
The majorityof impact acceleratorscite funding asanacute constrainttotheirprogram.
Acceleratorsreliantonphilanthropiccapital oftenfindthatdonortimelinesandspending
requirementsmisalignwiththeirownneeds.Forexample,donorsoftenneedtofundspecific
initiativesthatgenerate easily identifiable,large-scaleimpact,while acceleratorsoftenneed
fundingtosimplymaintainandscale theiroperationsortotest(potentiallyfailing) innovations
that couldenhance theirmodels.Acceleratorsexploringmore sustainablefundingmodelsare
oftencautiousaboutembracingtraditionallycommercial models(e.g.,equitystakes) astheyfear
thiswill take themawayfromtheirimpactgoals.There isalsoa reluctance toembrace equity
modelsgiventhatmanyimpactenterprisesare nonprofitorgenerate minimal revenues.
3. Balancing business versus socialimpact
For impactaccelerators,“scaling”enterpriseshasmanydifferentfacets.Impactenterprisesneed
to focuson businessgrowth,measuredthroughtraditional metricssuchasrevenue growthor
employeegrowth.Atthe same time,theyalsoneedtoincrease social impact,measuredthrough
impact-specificmetricssuchasnumberof beneficiariesreachedorspecificmeasuressuchas
reducedincidencesof malnutrition.Itischallengingforimpactacceleratorstodetermine the right
Potential MitigationStrategies:Many acceleratorstry to cultivate strategicpartnershipswith
otherecosystemplayerstoraise awareness.These partnershipsallow acceleratorstopresent
theirworkat industrytrainingsandconferencesandmake connectionstoinvestors,
enterprises,and otherkeypartnerssuchas potential mentors.Otheracceleratorshave takento
traditional advertisingmediums,suchasradiointerviews,toreachbroaderaudiences.
Potential MitigationStrategies:Acceleratorsfocusedonphilanthropiccapital are more
consciouslyselectingfunderswhohave long-termgoalsthatalignwiththeirprogram.
Partneringwithmore niche fundersallowsaccelerators todevelopongoingrelationshipswith
fewerspendingrestrictions.Foracceleratorspursingself-sustainingmodels,theyare exploring
revenue-sharingoptions,paybackmodelswhere enterprisesrepaythe costof servicesover
time,orequitystakesthatenterprisescanbuybackovertime underreasonable terms.

13
focusbetweenscalingbusinessimpactversus scalingsocial impact.Often,theystruggle tobalance
these twoobjectivesandidentifythe appropriatesupporttoprovide enterprises.
4. Balancing standardizationand customization
Standardizedcurriculum enablesmaterials tobe refinedandperfectedovermanyiterationsand
easesthe processof scalingan acceleratorprogram.On the otherhand,customizedcurriculum,
case studies,andothertoolsallow impactenterprisestounderstandhow toapplygeneral lessons
or theoryto theirownbusinesses.Acceleratorprogramsneedboth,butfindingthe rightbalance is
a challenge.Furthermore,customizedprogrammingishighlyresource intensive.
5. Human capitalresourceconstraints
Impact acceleratorsneedtalentedhumancapital tobothdeliverexistingprogramseffectivelyand
to scale theirmodel.However,limitedphilanthropicfundingforoverheadcosts,lowersalaries
comparedto otherprivate sectorjobs,andoften“unattractive”locationsmeansthatimpact
acceleratorsfrequentlycannotobtainthe necessarytalent.
Potential MitigationStrategies:Some acceleratorsinherentlylinkthesetwogoals,wherebythe
social impactonlyincreasesasthe businessscales.Forinstance,amobilepaymentsystemthat
givesfarmersaccessto formal bankingincreasesitsimpactasitgainsmore customers.Other
acceleratorsfocusondefiningclearimpactgoalsforan individual enterprise andthenhelpthe
enterprise developastrategytomeetthese goals.
Potential MitigationStrategies:Some acceleratorshave identifiedasetof issuesthatnearlyall
impactenterprisesexperience,andhave craftedastandardcurriculumthataddressesthem.
Theythenlayeron tailoredservicesbydrawingonrelevantcase studyexamplesorappropriate
mentorsfromtheirnetwork.
Potential MitigationStrategies:Many impact acceleratorsrelyonmentorsorsector experts
whoare willingtocontribute theirtime free of charge.Some acceleratorsutilize privatesector
secondeesorgraduate studentstoprovide temporary supportona specificinitiative (e.g.,
developinganewcourse).Othersfocusonfindingmembersof the local communitythatare
capable of implementingaprogram andhave the passiontosupportimpactenterprises.

14
6. Limited quantitativedata to supportinsightson bestpractices
Rightnow,there islimiteddatabeingcollectedandanalyzedtounderstandthe quantitative
impactof differentacceleratormethodsandapproaches.Insightsremainqualitative.Tohelp
acceleratorsfeel evenmore confidentintheirchoicesandhelpotheracceleratorsmake informed
decisions,the fieldmustaugmentthe typesof qualitative insightsfoundinthisreportwith
quantitative verification.Greaterimpactmeasurementbyimpactenterprisesandimpact
accelerators,andbettertrackingbyall partieswill ensure innovative modelsandinitiativescanbe
tested,validated,andscaled.
Potential MitigationStrategies:Nearlyall impactacceleratorsare prioritizingmonitoringand
evaluation,bothforthemselvesandtheirimpactenterprises.The keyistostandardize thisdata
collectionandshare itwithresearchers,whocandevelopcross-cuttingquantitative insights
aroundwhat isworkingandwhat isnot workinginimpactacceleration.Tomake thissuccessful,
accelerators andresearchersneedtocollaborate andworktogetheronstandardizingdata.

15
Case Studies on Innovative Accelerator
Models
The followingsectionprovidesadetailedoverview onthe five acceleratorgranteestesting
innovative new practices.The RockefellerFoundationgrantenablestheseorganizationstotest
newmodelsinordertogenerate promisinglessonsforthemselvesaswell asothersinthe field.
For quickreference,thereisan up-frontsnapshotof eachgrantee’sinnovationatthe beginningof
each case study. Each case studythenfollowsasimilarformat:
 It beginswithanoverview of the accelerator’sexistingmodel andapproach.Thisoverview
demonstrateswhyeachacceleratoris alreadyaleaderandpromisinginnovatorinthe
field.
 Followingthisoverview,the innovationbeingtestedwithThe RockefellerFoundation
fundingisintroduced.Eachcase studyprovidesadetailedsummaryof the innovationand
the specificmarketgapit isaddressing.
 Initial insightsof the effectivenessof the innovationare outlined.Eachaccelerator
surveyedtheirimpactenterprises,askingthemtorankthe importance of eachof the eight
scalingneedshighlightedabove andthenevaluate the effectivenessof the accelerator’s
supportfor eachneed.Thisisthencomparedto the importance thatthe acceleratorsaidit
placedoneach of the scalingneeds.
 To provide contextonthe sustainabilityof eachmodel andthe resourcesrequiredto
deliverthe program,abrief synopsisof eachaccelerator’sfundingstructure andoperating
model isprovided.
 Finally,eachcase studyprovidesasummaryof the keyingredientsof successandkey
challengesforeachaccelerator.Ashighlightedabove,these twoare highly
interconnected.Therefore,eachcase studypresentsthe critical successfactorsforthe
innovationbeingtested,whichcombinebothbestpracticesandchallengestogetherina
waythat highlightsthe evolvingandexperimental nature of eachinnovation.
Exhibit3: The RockefellerFoundationAcceleratorGrantees

16
Unreasonable Institute
Summary of Organization
Establishedin2009, the Unreasonable Institute isfocusedonfindingcapable entrepreneursand
enablingthemtotackle the world’stoughestenvironmental andsocial challenges.The core of the
Unreasonable Institute modelisprovidingmentorshipsupporttohelpenterprisesbothrefine their
strategyfor creatingimpactas well asenhance theirabilitytodeliverthatimpact.Each year,
Unreasonable Institute matchesadozenventuresfromaroundthe worldwith50mentorsand
100+ potential fundersata five-weekbootcampinBoulder,Coloradointhe UnitedStates.Asof
August2014, 93 Unreasonable Institute enterprisesare operatingin41 countries.
Enterprisesgothrougha rigorous four-monthselectionprocessforUnreasonableInstitute,
includingawrittenapplicationandinterviewswiththe Unreasonable teamandsectorexpertsthat
seektoassessthe viabilityof theirbusinessmodel.Once selected,Unreasonable Institutethen
conducts a seriesof diagnosticassessmentswitheachentrepreneurtounderstandwhere they
wanttheirbusinesstogoand the supportneededtogetthere.
Basedon thisdiagnostic,Unreasonable selectspotentialmentorsfromitsexistingnetwork and
alsorecruitsnewmentorsthatcan provide supportforthe enterprise’sspecificneeds. Itthen
facilitatesintroductoryphone callstotest“chemistry”betweenthe ventureteamandpotential
mentor.The ideaisthat the relationshipshouldbe mutuallybeneficialtoboththe mentorand
mentee.
Once at the Unreasonable Institute bootcamp,so-calledNinja mentorsthathave strongexpertise
ina particularsubjectmatter(andare able to teachthis subjectinaneasy-to-use framework)
deliverworkshopstoall of the entrepreneurs.Theycoverarange of topics,suchas fund-raising,
testingcore assumptionsof a businessusingprototyping,andbeinganeffective CEO.
Entrepreneursthenspendthe majorityof theirtime applyingtheseconceptstotheirown
businessesandengaginginone-on-one meetingswithsome of the mentorswithwhomtheyhad
Model Replication
The Unreasonable Institute isreplicatingitsmodel of intensive mentorshipinnew locationsin
orderto provide localizedsupportforimpactenterprises.Thereare several benefitsto
replication.A local presencecanprovide access forenterprisesthatmaynot have time or
resourcestotravel to the original Unreasonable Institutelocationinthe UnitedStates.In
addition,local mentorsbetterunderstandthe marketdynamicsandchallengesthatenterprises
face and theirphysical proximitycanleadtodeeper,longer-lastingrelationships.Withlocal
institutes,entrepreneurscanquicklytestnew ideaswithcustomersandthenreturntomentors
to share theirdiscoveries.Thistranslatestofasterlearningforenterprises.Finally,there is
greaterlikelihoodof collaborationamongstthe variousenterprisesif theyare all workinginthe
same local context.
1

17
initial conversations.These are considered Sagementorsastheyprovide individual guidance to
specificenterprises.Ideally,bythe endof the program, each enterprise establishes ateamof two
to fourdedicated Sagementorsthatwill continuetosupportthemlong term.
At the endof the five-weekprogram, entrepreneursattendtwo InvestorDays where theymeet
more than 100 prospective funderswhohave beenspecificallycuratedbasedontheirpotentialfit
withthe enterprises.Afterthe program, alongside the long-termmentorshipsupport,enterprises
alsoreceive apro bono executive coach,whomeetswiththemonce aweektosupportthemin
runningtheirbusinesses.These are professional developmentcoachesthatvolunteertheirtime to
workwithenterprisesandhelpthemturnbusinessplansandtheoretical goalsintoactionable
tasks.
UniquefeaturesofUnreasonableInstitutemodel
The unique value propositionof Unreasonable Instituteisthe cultivationof the long-term
relationshipsbetweenenterprisesandteamsof mentors.Impact enterprisesare notsimply
exposedtoexpertsonaspecifictopic—suchasmarketing,financing,etc.—forthe short-time
periodof the program.Instead,Unreasonable Institute helpsenterprisescurate ahand-selected
teamof mentorsthatprovide supportfortheirspecificbusinessneedsandwillbe there long term.
By ensuringthatmentors’inputisactuallyvaluable andbeneficial tothe enterprises,this
motivatesthe mentorstoremainengaged.The teammentorshipstructure also createsasortof
“coopetition,”asthe mentorsall wanttoadd at leastas much value astheirpeers,if notmore.
Mentorsare askedto committo a minimumof six monthsof supportwithenterprises.Asimpact
enterprisesgrowandtheirneedschange,the mentorteamcanbe refined.Thereisa“lead”
mentorforeach enterprise thatregularlyreportsbacktoUnreasonable Institute sothatitcan
provide additional connectionsasneededasthe enterprisecontinuestoevolve.
Unreasonable Institute ensuresentrepreneursfullyleverage thisopportunitybyteachingthema
frameworkonhowto prepare formentorconversations,how tostructure theirtime andengage
withmentorsduringinteractions,andthenhow tofollow upandcontinue toengage themlong
term.Thisframeworkcan alsobe usedfor buildingrelationshipswithfunders,potential partners,
suppliers,andotherrelevantstakeholders.
Anotherunique featureof UnreasonableInstitute isthe immersiveenvironmentof the bootcamp.
Mentors can come to stay forjusta few daysor for the full five weeks.Thisenablesthe mentor-
mentee pairstoengage bothformallyand informallyand,thus, developlong-termrelationships.

18
History of theprogram
Since 2009, Unreasonable Institutehasbeenable tosupport93 differentventuresin41countries.
88% of these enterprisesare still active.Collectively,theyhave received more than$53 millionin
fundingandhave positively affectedmore thanfourmillionlives.The graphicbelow providesan
overviewof Unreasonable Institute’shistorical success.

19
Summary of Unreasonable Institute’s New Innovation: Model Replication
Withsupportfrom The RockefellerFoundation,UnreasonableInstitute isreplicatingitsmodel in
Uganda and Mexico.If successful,the ideaistoscale aggressivelyinsubsequent years— ideally
creatingmore than 100 Unreasonable Institutesaroundthe world.
Unreasonable Institute putsforwardseveral reasonsforwhyreplicationisnecessarytoexpand
theirimpact.The firstrationale forreplicationisbetteraccessformore entrepreneurs.There are
entrepreneurs whoare unable tospeakEnglishorface challengesthatare highlyuniquetotheir
local environment,andthusthe currentUnreasonable Institute programcannotprovide relevant
support.Second,Unreasonable Institute believesphysical proximityleadsto longer-lasting
relationshipswithpotentialmentors(whohave oftenfacedthe same challengesandhave a
strongerunderstandingof the local context) andfasterlearningonhow toimprove business
modelsgiventhe abilitytointeractwithtargetbeneficiariesmore easily.Withlocal institutes,
entrepreneurscanquicklytestnew ideaswithcustomersandthenreturntomentorsto share
theirdiscoveries.Finally,there is agreaterlikelihoodof collaborationamongstenterprisesif they
are all workinginthe same local context.
Detailed description ofmodeland supportprovided forvarious impactenterpriseneeds
For replication,UnreasonableInstitute selectsateamof twocofoundersthatshow high potential
to run successful institutesintheirowncountryandgivesthemaplaybook(whichprovidesa
detailedoverviewof howtorun eachpart of the program) and relevantinfrastructuresystems
(includingthe applicationsystemandanonline videolibraryof workshops).Theseteamsare
invitedtoUnreasonable InstituteinBouldertoreceivein-persontrainingandsee on-the-ground
operations.Theyalsoreceiveongoingsupportfrom the Unreasonable InstituteinBoulderthrough
regularcheck-insandanannual gatheringto share learnings.
The overall structure of the new instituteswill followthe programinBoulder,Colorado,where
enterpriseslive togetherina house forfive weeks,getguidance frommentors,buildtheirbusiness
toolkit,and developconnectionswithothersthatwill leadtogreatersocial impact.The chart
belowhighlights the levelof supportthatthe Unreasonable Institutemodelprovidesfor eachof
the eightscalingneeds forimpactenterprises.
Beyondthe core intensive mentorshipmodel,the exactworkshopsandguidance offeredthrough
the local instituteswill be specifictothe local context,the needsof the enterprises,andthe
mentorsinvolvedinthe program.Overtime,aslocal institutesgetmore established,theywill
likelyfocusmore onproductprototypingandensuringmarketfitgivenproximitytocustomers

20
while the BoulderInstitute maycontinuetofocusmore oninvestmentreadinessgivenproximity
to investors.
For instance,inBoulder,there are fund-raisingworkshopsand regularcheck-instosee where
enterprisesperformonafunding-readinesschecklist.Inaddition,financial architects— individuals
that have a financial background — dedicate approximately50 hoursof pro bono customized
supportto eachenterprise.This helpsenterprisesclearlydefine theirrevenue streams,cost
structures,andunderstandthe basicsof financial modellingsotheycanmanage theirmoney
effectively.
There are otherinnovationsalsobeingtestedinBoulder.UnreasonableScrimmage isa one-day
eventconnectingentrepreneurstoteamsof otherentrepreneurs,local expertsinspecificfields
(e.g.,engineering,IT),andinvestors.Withinthese teams,entrepreneursthenrapidlyprototypeto
refine andenhance theirproduct.While thereare challengesincreatingthe rightteams,thiscould
be an interestingmethodtohelpcreate strongerbusinessmodels.UnreasonableLaunchpad
providesanopportunityforentrepreneurstopitchto more than 800 potential customers,
investors,andindividualsfrom the communityinordertomake connectionsandgetfeedbackto
refine theirbusinessmodel.While thishasbeenanexcitinginitiative togainvisibilityfor
enterprises,Unreasonable isconsideringsmallereventswithaselectgroupof audience members
to maximize the benefitof the event.
As these ideasare refinedandthe new Unreasonable Institutesbecomemore mature,itislikely
that promisinginitiativeswill thenbe adoptedinthe new institutes(orvice versa).

21
Feedback on Unreasonable Institute
A brief surveyof the participantsinthe Unreasonable Instituteprogramassessedhow the program
performedacrossthe eightscalingneedsof impactenterprises.15
In general,if Unreasonable Institute placedsignificantemphasisonaspecificfeature of itsmodel,
enterprisesgave itastronglypositiveevaluation.Inparticular,participantsfeltmentorshipwas
highlyvaluableandgave highscoresinareas where mentorsupportwouldlikelybe critical for
success(suchas strategicplanningandbusinessacumen).Inaddition,connectionstofunders
helpedenterpriseswiththeirfinancingneedssignificantly.
EntrepreneurshighlightedthatUnreasonable Institutegave them “exposureto greatpeoplewho
are doing incredible things”and an “amazing community.”The pace of the program wasintensive
and some entrepreneursthoughtadditional time toapplyconceptstotheirbusinesswouldbe
useful versushavingsuchahighvolume of meetingswithmentors.Inaddition,some participants
mentionedthe program “could bemore organized”and“morestructured”in orderto helpthem
bettermanage theirtime andresponsibilitiesandmaximizethe benefitsof the program.
Operating model
As highlightedabove,eachUnreasonableInstitute locationwill have afoundingteamof at least
twocofounders.Eachcofoundingteamisthenresponsible forrecruitinglocal staff toprovide
supporton partnerships,logisticsandotherfactors.There isalsoa Chief Scale Officerthatprovides
expertisetothe local teamsonhow to successfullyreplicate the Unreasonable Institutemodel.
Currently,UnreasonableInstitute isfundedthroughamix of paymentsfromthe participating
enterprises(coveringapproximately18%-25% of programcosts) andphilanthropiccapital
(coveringthe remainderof costs).Enterprisestypically crowdfund theirfees(approximately10-
12,000 USD forthe Unreasonable Institute inColorado) fromtheircontacts,thusminimizingtheir
initial capital outlay.AsUnreasonable Instituteseekstoscale globally,there isarecognitionthat
15
Monitor Deloitte analysis surfaced eight needs of scaling impact enterprises: market research, business development and strategic planning, financing,
supply sourcing and production, sales and marketing, distribution and market access, monitoring and evaluation, and leadership skills and business acumen
* n = 18
*How to interpret the survey results?
In this chart, there are three columns per scaling need. The first column (light grey) represents the relative importance of
the scaling need, as assessed by the impact enterprises. The secondcolumn (blue) represents the importance ofthe scaling
need, as assessed by the accelerator.The third column (dark grey) represents the impact enterprises’ assessment ofhow
well the accelerator addressed the particular scaling need.
All impact enterprise scores are calculated based on an average of responses.

22
itsreliance onphilanthropicfundingwill impede itsabilitytoreplicate.Thus, itisfocusingon
developingamore sustainable fundingmodel.One option itisexploringisarevenue-sharing
model withenterprises.Initial feedbackfromenterprisesonthisapproachhas beenpositive.
Critical Success Factors
Unreasonable Institute hasidentifiedthe followingfactorsascritical to the successand
sustainabilityof itsmodel as itcontinuestoscale. Manyof these practices are importanttothe
effectivenessof the model,butcanbe challengingtoimplement.
Building strong relationshipswith mentorsand fundersiscrucial, butcan be resourceintensive
Long-term,high-qualitymentor-mentee relationshipsisthe cornerstone of the Unreasonable
Institute model.Inaddition,connectionstothe rightinvestorsisacrucial factorin enabling
enterprisestoraise capital.Unreasonable spendssignificanttime oncultivatingandmaintaining
these relationships,creatingaunique high-touchexperience betweenenterprisesandthese
partnersinorder to facilitate long-termengagement.
Thisdedicationhasbeensuccessful,butalsohighlyresource intensive.Historically,all mentor
relationshipshave beenroutedthroughone staff memberandall funderrelationshipshave been
managedbyanotherindividual.Theyare responsibleforall enterprise pairingsand
communications.Thesestaff membershave struggledtofullyunderstandthe needsof all
enterprises and evaluatethe effectiveness of matches and devote timetorecruitmentand
relationshipmanagementwiththesepartners.Asitscales,Unreasonable Instituteisconsidering
more efficientmodelstomatchenterprisestomentors,suchassurveysandshortinterviewsto
more quicklyandeffectivelyunderstandenterprise needs.Inaddition,itiscontinuingtorefineits
database tools(e.g., ithasa database withthe namesof thousandsof investors)toenable more
efficientselectionof appropriate partnersforspecificenterprises.Achievingthe rightbalance
betweenengagementandefficiencywillbe crucial forsuccess.
Selecting theright teamsand giving themtoolsforsuccessis key to effective replication
The successof newUnreasonable Institutesrestslargelyonthe foundingteams.Theymusthave
dedication, relevantskills, andthe abilitytohire the rightsupporttoimplementthe program
effectively.The twocofoundersforeachnew teammusthave complementaryskillsandproven
successinconveningtogetherstakeholdersinthe field.Aspartof the processto become local
institute founders,theymustrunstart-upweekendsthatprovide mini-accelerationprogramsto
local impactenterprises.Itisalsoimportanttoprovide the foundingteamswiththe rightsupport
to be successful.Ashighlightedabove,UnreasonableInstitute providesfoundersaplaybookthat
outlinesthe detailsof howtosetup and operate aninstitute,accesstorelevantsystems,and
trainings.
Despite the selectionprocessandsupport,itcanstill be a challenge tofindthe rightfounding
team.Duringthisinitial expansionintotwonew locations,one of the founderswasunable tofocus
exclusivelyonUnreasonable Institute,whichslowedprogress,andledtothe founder’seventual
exitfromthe program.Given that the foundersneedtopassdownboththe mindsetandthe
model of the institute,thisfounder’sexithinderedthe abilityof local staff tosuccessfully
implementthe program.
Unreasonable Institute isfocusedonrefiningthe founderselectionprocess andiscurrently
exploringthe ideaof developing"local boards”thatwouldinvestinthe new institute,engage in
the selectionprocessforfoundingteams,andcouldprovide additional supportandconnectionsas
the program grows.Asthese boardswouldhave betternetworksincountry,theywouldbe best

23
placedto selectthe rightfoundingteamsandknow the rightstakeholdersforsuccessof the
program.To provide additional local support,Unreasonable isplanningaprogramwhere interns
are trainedin institute operationsinBoulderandthendispatchedtonew locationsforshortstints.
Thiswill helpthe internsgetreal experience innew countrieswhileenablinglocal teamstolearn
howto manage the logisticsof the program.
A sustainablebusiness modelisincreasingly importantasUnreasonableInstitutescales
Unreasonable Institute acknowledgesthe currentfundingmodelisnotsustainablelong termasits
program scales. Itbelievesitwill be importanttohave up-frontcapital fornew locationsinorder
to attract and appropriatelycompensate the bestfoundingteam and ensure the teamcanfocus
on operations versusfund-raisingasitstarts the program. The “local boards” mentionedabove
couldprovide this up-frontcapital,utilizingstrongernetworksincountrytotap intovarious
fundingsources.
Anothercomponentof financialsustainabilityismovingawayfromaphilanthropicdependent
model toan independentmodel overtime.The revenue-sharingprogrammentionedpreviously
couldbe a bettermeanstocoverprogram costs.One variationof thisis to take a small equity
stake (e.g.,6%) inan enterprise andthenallow the enterprisetobuythe stake back overtime
basedon currentand projectedrevenues.Applyingone suchmodel toenterprisesthathave
participatedinUnreasonable Instituteoverthe pastfew years,Unreasonable estimatedthatit
couldhave coveredall costsand become profitableafterafive-yearperiod.Thisrevenue-sharing
model will be testedthroughvariousUnreasonable Institute’s programsoverthe nextyear.
Carefulscreening of applicantsensures only enterprisesthatareadequately prepared andcan truly
benefitfrom theprogramareselected
Currently,there isanintensiveselectionprocessforthe UnreasonableInstitute.Entrepreneurs
mustsubmita writtenapplicationtodemonstratetheirunderstandingof theirmarket,theirability
to execute the businessmodel,theirimpactonthe targetpopulation,andtheirabilitytoearn
revenuesthroughtheirbusiness.The nextstepisaninterview totestwhetherthe teampossesses
the followingfourcharacteristics:integrity,coachability,teamwork,andmotivationto“dotheir
homework.”
Unreasonable Institute conductsreferencecheckstobetterunderstandthe entrepreneurs.Sector
expertsalsointerviewenterprisestodetermine the feasibilityof eachenterprise’sbusiness.This
enablesUnreasonable Institute tomake accurate evaluationswithoutneedingtohave deep,
sector-specificknowledge.Through thisprocess,Unreasonable ensuresthatonlyenterprisesthat
are at the right stage intheirlife cycle andwouldtrulybenefitfromthe mentorshipsupportare
selected.Selectingenterprisesthatare nota good fitforthe Institute wouldbe adisservice to
those entrepreneurs.
The challenge isthatthisprocesscan be time consumingandresource intensive.Asaresult,
Unreasonable Institute isfocusedondevelopingnew waystostreamlinethe processandmake it
more efficient,withoutlosingitsability toselectthe rightenterprises.
Ongoing reflection and evaluation ensuresthattheprogramcontinuesto evolveand become
moreeffective
As Unreasonable Institute continuestogrow globally,itwillremainimportanttocontinue to
evolve andlearnfrompastmistakes.The teamisveryopenaboutlearningfromprevious

24
successesandfailures.Infact,there isa “failures”sectionof the Unreasonable Institutewebsite,
so that otherscan learnas well.As itreplicatesitsmodel, the Boulderteam speakswiththe other
foundingteamsregularlytounderstandwhatworks(andwhat doesnotwork) and consistently
updatesthe playbookasa livingdocument.There are uniquechallengesforeachinstitute and
opportunitiesforeachlocationtolearnfromone anotherthroughmore frequentinteractions.By
consistentlyiteratingandrefining itsmodel,UnreasonableInstitute can helpensure thatthe
programsmore effectivelyscale the impactof differententerprises.
Conclusion
The Unreasonable Institute hasaprovenmodel thatcan effectivelysupportandscale impact
enterprises.Replicationof thismodel will helptailorsupporttolocal contextsandenable the
impactof the program to scale ina more efficientmanner.Initialindicationsdemonstrate that
replicationispromising.Keyfactorstoensuringthe model issuccessful isthe selectionof the right
foundingteamsandthe developmentof amore sustainable businessmodel thatmovesawayfrom
dependence onphilanthropiccapital.

25
VillageCapital
Summary of Organization
Establishedin2009, Village Capital isanonprofitimpactacceleratorthatservesentrepreneurs
across the globe.Drivenbythe beliefthatnoleaderhasall the answers,VillageCapital delivers
businessassistanceprogramsthat facilitate relationships withstrategicpartnersandinvestors and
provide expertcoachingonbusinessstrategy. From2009-2013, Village Capital conducted27
programsacross the UnitedStates,Asia,andSub-SaharanAfrica.
Impact enterprisesselectedbyVillage Capital committoa 12-weekprogram, whichrevolves
aroundthree in-personsessions thateachlastfourdays.Duringthe sessions,entrepreneurs
attendlecturesandparticipate insmall grouplearningforums. Entrepreneursspend
approximately20%of theirin-personsessions inlectures.Thesefocusonbusinessmodel
refinement,teammanagement,financial management,andoverall businessstrategy.The lectures
provide aconcise frameworkforeachtopic,as well ascase studyexamplesthatfacilitate
understandingof howframeworkshave beenappliedunderdifferentcircumstances.
Entrepreneursspendthe remaining80% of theirsessiontime insmall grouplearningforumsto
applytopicscoveredinlecturestotheirownbusinessesandtoreceive guidance andfeedback
frompeersand mentors.
Program mentors — typicallysectorexpertsandbusiness executives — teachlecturesand
facilitate small grouplearningforums,leveragingtheiruniqueexpertise (e.g.,supplychain,
marketing,productdevelopmentandcustomervalidation).Village Capitalstaff membersalso
provide supportinteachingandcontentgeneration.
The Problem-Based Approach
Village Capital’s“Problem-BasedApproach”isaninnovative twistonacceleratorsupport.Many
acceleratorprogramsfocuson givingindividualenterprisesfunding,connections,andtraining
to enable themtoraise capital andgrow theirownbusiness.These programsacceptthe basic
businessmodelproposedbyentrepreneursandthensimplyworktorefine it.Thiscanleadto
enterprisesthatare just“solutionslookingforproblems.”
Under the problem-basedapproach,Village Capital doesnotsimplyfocuson supporting
individualenterprises,butinsteadaimstosolve abroadersocial andenvironmentalproblem.It
recruitsenterprisesthatall addressone problemfromdifferentangles.VillageCapital then
developsanecosystemof supportaroundthe problem, tailoringthe connections,mentors,and
curriculumto enhance the abilityof enterprisestoeffectivelytackle the issue.Byfocusingmore
on developingsustainable andeffective solutionsversusjustmakingindividual enterprises
investment-ready,Village Capital ensuresthatitsenterprisestrulyaddresssocietal challenges
and make a tangible andbeneficial impact.Thisapproachalsoenablesbetterengagement
amongstenterprisesthemselvesandbetweenenterprisesandpolicymakers,investors,
customers,andmentorsinthe fieldasall stakeholdersare passionate andknowledgeable about
the same problems.
2

26
Entrepreneursspendtimebetweensessionsback“onthe ground”at theirorganizations,applying
lessonslearned,testingnewhypotheses,andgatheringfeedbackanddataon business
performance.VillageCapital holdsweeklycheck-incallswitheachenterprise teamtodiscusshow
theyare interpretingtheirdataandmodifyingtheirhypothesesaccordingly.Whenentrepreneurs
returnfor the nextin-personsession,theylearnnew skillsandcontinue torefine theirhypotheses
and businessmodelswithpeerandmentorsupport.
UniquefeaturesofVillage Capital’s model
Village Capital’smostwell-knowncharacteristicisthe peerreviewmodel,throughwhich
entrepreneurspubliclyevaluateandrankpeerswithintheircohort.Thisreview processoccurs
duringeach of the program’sthree in-personsessions.Atthe endof the program, the two
entrepreneurswiththe topratingseachreceive $50,000 — fundedbyVillage Capital andlocal co-
investors.
Village Capital isastrongbelieverinthe powerof thispeerengagement.Asentrepreneursare
oftendealingwiththe same customers,marketdynamics,andchallengesastheirpeers,Village
Capital believes theyare bestplacedtoevaluate the viabilityof amodel andprovide inputto
enhance one another’sideas.
By tyingpeerreviewtofunding,the model shiftsthe traditional dynamicsof the early stage
investmentprocessbymakingentrepreneursthe investors.Givingentrepreneursinvestment
decisionrightsencouragesamore critical,honest,andcandidassessmentof businessmodels.
Entrepreneursare motivatedtotrulyenhance theirbusinessmodel anditsabilitytopositively
benefitcustomers,insteadof justdevelopingapitcharoundwhattheythinkinvestorswantto
hear.The peerreviewmodel alsoencouragesgreaterengagementamongstentrepreneurs
because theyare incentivizedtobe regardedhighlybypeersandtoprovide constructive input,
relevantcontacts,andothersupport.

27
History of theprogram
Since 2009, Village Capital has delivered 27businessassistanceprogramsinthe UnitedStates,East
Africa,India,China,andBrazil.Withapproximately400 graduate enterprisestodate,Village
Capital’salumni have created6,000 jobsand serviced more thansix millioncustomersworldwide,
including2.7millioncustomerslivinginpoverty.The table below showsthe evolutionof
participatingenterprisesandthe programitself.

28
Overview of Village Capital’s New Innovation: The Problem-Based Approach
ThroughThe RockefellerFoundationgrant,VillageCapital istestinganinnovationonitsmodel
calledthe problem-basedapproach.Inthisapproach,Village Capitalrecruitsimpactenterprises
that are workingtosolve specificsubsetsof alargersocial problemandthenfocusesonensuring
theirmodelstrulyaddressthe problemandhave apositive impactoncustomersandthe
communitiesinwhichtheyoperate.
Many acceleratorsoftenfocusongettingenterprisestobe “investmentready”sotheycanraise
capital and scale.These programscan be too solution-focused.Whenacceleratorsacceptthe
businessmodelproposedbyanentrepreneurandthensimplyworktorefine it— without
questioningthe validityof the problembeingsolved for— theycanobscure blindspots.Village
Capital’sreviewof itsfirst~400 impactenterprisesrevealedthatthe mostconsistentreason
enterprisesfailedisthattheywere “solutionslookingforproblems.”
Under thisnewapproach,Village Capital shiftsitsfocusfrommakingenterprises“investment
ready”to ensuringthatenterpriseshave the righttoolstoeffectivelyaddressreal problems.
Enterprisesare incentivizedtorefine theirbusinessmodel tocreate more efficientandsustainable
solutionsversussimplyrefiningtheirmodel aroundwhatinvestorswill findmore attractive.This
leadstomore pragmaticbusinesseswithrobustcustomervalidation.
Village Capital believesthisapproachalsoenablesmore effectiveengagementwithcustomers,
policymakers,corporations,technology experts,andotherstakeholderswhoare vestedin
addressingthese problemsandcanprovide vital sectorinsightandsupport.Inaddition,as
enterprisesare all workingonthe same problemfromdifferentperspectivesandthusface similar
marketdynamics, theyare betterincentivizedtocollaborate andcanprovide more insightful
feedback,guidance,andrelevantconnections.
Description of modeland supportprovided forvarious impactenterpriseneeds
Througha combinationof the problem-basedapproachanditstraditional supportprogram,
Village Capital istestingapromisingandinnovative model thatmeets the variousscalingneedsof
impactenterprises.The table below showsthe Village Capital program’slevelof supportforeach
of the eightscalingneeds.
Each problem-basedprogrambeginswithanindustryroundtable,where Village Capitalspeaks
withsectorexperts,policymakers,businessexecutives,andexperiencedentrepreneursina
specificlocationtodiscussthe topissuesfacingaparticularsector(e.g., healthcare accessfor low-

29
income families).16
Throughthe discussion,participantsarrive ataspecificproblem
definition/statementthatentrepreneursmusttryto address.
Applicantstothe programmust have a businessmodel thatalignswiththe selectedproblem
statement.Village Capital thenselectsupto15 of the strongestenterprisesthatare workingto
solve aspectsof the problem.Enterprisesare alsoscreenedtoensure thereare nodirect
competitorsinthe cohort,butrather complementarybusinesses.Throughthe extensive
engagementwithsectorstakeholders,bothinthe developmentof the problemstatementand
throughoutthe program,Village Capital helpsthe entrepreneursgetcontinuousandin-depth
marketresearch.
Once in the program,all of the enterprisesengageinthe same 12-weekprogramhighlighted
above,withcase studiesandmentorsspecificallytailoredtothe cohort’sproblemandsector.The
firstin-personsessionfocusesonrefiningvaluepropositions, demonstratingproducts/services,
understandingriskstogrowth,anddevelopinghypothesestohelpvalidatethe businessmodel and
customerdemand.The secondsessionfocusesondevelopingafinancial model (e.g.,pricing,
revenues,andcosts) anddevelopinga HR strategy.Village Capitalalsoorganizescustomerforums
to provide entrepreneursanopportunitytopitchtheirproductstoreal customersandreceive
actionable feedback.The thirdsessionfocusesoninvestmentreadinessandmonitoring and
evaluation.Throughoutthe program, entrepreneursare pairedwithFinance Associates,who
provide tactical financial guidance andhelpimprovefinancial models.The combinationof lectures,
supportfromFinance Associates,peerguidance,andmentorshipenablesVillageCapital toprovide
supportacross all impactenterprise needs.
16
Roundtables are not necessarily in-person sessions, but rather a series of in-depth discussions with relevant stakeholders.

30
Interim feedback on newmodel
Overall,initial feedbackonthe problem-basedapproachhasbeenpositive.A brief surveyof
participantsinthe FinTech2014 program assessedhow the programperformedacrossthe eight
scalingneedsof impactenterprises.17
In general,if Village Capital placedsignificantemphasisona specificfeatureof itsmodel,
enterprisesgave itapositive evaluation.Twoareasof feedbacktohighlightare relatedto
financingsupportandmarketaccesssupport.
As mentionedabove,Village Capitaldoesnotbelieve investmentreadinessshouldbe the main
focusof an accelerationprogram.Itthusplacedmoderate emphasisoninvestmentandfinancing
support(throughlectures,mentorship,andthe use of Finance Associates).However,impact
enterprisesfeltfinancingsupportwashighlyimportantforanaccelerationprogramand
subsequentlyratedVillageCapital’ssupportonfinancingneedslowerthaninothercategories.
One entrepreneurhighlightedthatinvestorseither “weren’trealinvestors orwere tapped out,”
while othersindicatedageneral desirefor “moreengagementwith investors”andmore “focuson
pitch development.”
Anotherareato highlightisdistributionandmarketaccesssupport.Despite asignificantemphasis
on thisworkand the recentintroductionof customerforums,participantsdidnotrate the support
providedhighly.VillageCapital acknowledgesthatfindingthe rightcustomersanddistribution
partnersremainsanongoingchallenge,anditisincreasingresourcesdedicated tofindingthe right
partners.
Participantswere particularlyenthusiasticaboutthe peersupportmodel,withmanymentioning
“cohortselection,” “peer review & feedback,”and“collaboration with teams”as strongbenefitsof
the Village Capital program.Mentorshipwasalsoconsideredhighlybeneficial.Several participants
expressedthe desire formore long-termmentorstonotonlyhelpguide themthroughthe
17
The FinTech cohort focusing on delivering financial services to low-income populations. Monitor Deloitte analysis surfaced eight needs of scaling impact
enterprises: market research, business development and strategic planning, financing, supply sourcing and production, sales a nd marketing, distribution and
market access, monitoring and evaluation, and leadership skills and business acumen
* n = 11
How to interpret the survey results?

31
program,but alsoto provide supportaftertheyleave the program.Village Capital hasexpressed
effortstoactivelyidentifyandrecruitthese long-termmentors.
Operating model
Both the existingmodel andthe new model are fundedthroughphilanthropiccapital.Village
Capital believesitisimportanttoremainfundedbyphilanthropiccapital inordertostay focused
on theirimpactgoals.Intermsof theirorganizational structure,VillageCapital selectsa
RecruitmentAssociateforeachnew program.The RecruitmentAssociate isresponsiblefor
identifyingpartnerorganizations, mentors,andappropriate impact enterprises.Once mentors,
partners,andentrepreneurshave beenidentified,VillageCapital identifiesaProgramManager,
whoownsthe deliveryof his/herassignedprogram.Frequently,the RecruitmentAssociate
transitionsintothe role of ProgramManager. The Program Managerthenworkswithmentors,
partneringorganizations,entrepreneurs,VillageCapital staff,andotherstakeholderstofacilitate
all aspectsof the program.
To ensure continuousimprovementto itsmodel,Village Capitalevaluatesitsprogramsvia
entrepreneursurveysandusesfeedbacktoimprove future offerings.VillageCapital also
participatesinEmory’sGlobal Impactof EntrepreneurshipDatabase Program, whichallowsitto
track progresson pastcohorts and continue toassessthe effectivenessof itsprograms.
Village Capital identifiedthe followingfactorsascritical tothe successandsustainabilityof the
problem-basedapproach.
Developing an appropriateproblemstatement directly contributesto thesuccessof thisapproach
The first,and arguablymostimportant,successfactorisa well-craftedproblemstatement.A
statementthatistoo narrowmay leadto overlappingbusinessesthatcompete withone another.
A statementthatistoo broad,however,limitssimilaritiesandopportunitiesforenterprisesto
collaborate.Itmayalsoreduce the engagementof communitystakeholdersandhinderthe overall
effectivenessof the approach.Inaddition,understandingaproblemdeeplyisimportanttobe able
to provide the rightsupporttothe enterprises.
To define aproblemstatementappropriately,VillageCapital reliesonaseriesof discussionsor
roundtableswithsectorexpertsandcommunityleaders. Village Capital founditchallengingto
workwithsome sectorexpertsthatwere toosolution-driven.Theseexpertswere focusedon
recommendingsolutionstoproblems,insteadof workingtounderstandanddefinethe problem
itself.Asthe problem-basedapproachcontinuestogrow,VillageCapital islearninghow tobetter
communicate the purpose andvalue of the roundtablestostakeholdersandbetterfacilitate
conversations.Assome stakeholderswill continue toengage insubsequentprogramsandcohorts,
theyare able tolearnfrom the processandprovide strongerinputthe nexttime.Most
importantly,the typesof applicationsreceivedandthe successof the enterprise cohort willalso
give Village Capital directfeedbackonthe effectivenessof the problem statementandenable itto
furtherrefine the process.
Having the rightpartnershelpsbuild an ecosystemofsupportforenterprises
Village Capital emphasizesthe importance of local engagementandpartnershipsforthe successof
the problem-basedapproach.Partnersnotonlyhelptodefinethe problemstatement,butalso
helpcreate an ecosystemof supportaroundthe program.Local partnerseitherserve asoridentify
mentors,investors,customers,instructors,andtechnical assistance providers.Having the right

32
partnersensuresthatVillage Capitalandthe enterpriseshave credibilityandthe rightconnections
to succeed.
To selectthe rightpartners,Village Capital makesaconcertedefforttoalignproblemswith
passions;ensuringthatpartnersare incentivizedtoprovide supportbecausetheyidentifywiththe
problemandare excitedtoaddressit.Thusfar,communitystakeholders,mentors,andfunders
are all demonstratingincreasedinterestandparticipationinthe problem-basedprograms.
At the same time,maintainingthese relationshipsonanongoingbasisisdifficult forVillage
Capital.Itcan be hard forlocal communitiesandsectorstakeholderstofullyengageandfeel
connectedwithorganizationsthatare onlypresentfora three-monthperiod.Facilitatinglong-
termengagementwithrelevantstakeholdersandproviding ongoingopportunitiesfortheirinput
are keychallenges.
Village Capital hasafewdifferentinitiativestoaddressthese challenges.Village Capital usesin-
house toolstotrack growingrelationshipsandensure itdoesnotlose sightof connectionsasit
scales.Asit expandstonewlocations,Village Capital aimstohave twotothree contentpartners
perprogram. Each contentpartnersharesownershipinthe successof the program, helpingto
make the connectionsneededforsuccessandprovidingrelevantinputintothe curriculumsuchas
sector-specificcase studyexamples.These partnersserveasa crucial long-termconnectionto
othercommunitystakeholders.VillageCapital is alsoworkingtohire more local representatives
withintheirorganization.These full-time employeeswill live inlocal communitiesand engage with
keystakeholdersyearround.
Obtainingsufficientfundingwill be critical to attractingthe righthuman capital resources.Given
Village Capital’sfinancial structure,itisreliantonphilanthropic funding— whichoftenprioritizes
fundingspentdirectlyonenterprisedevelopmentversusonoperational costs.Provingthe value of
these newresourceswillbe importantasthe new model continuestoscale.
The problem-basedapproach naturally fostersbeneficialpeercollaboration
The nature of the problem-basedapproachhasnaturallyincreasedthe levelof collaboration
amongstparticipatingenterprises.Because entrepreneursare selectedbasedontheir
complementarybusiness models — eachsolvesasubsetof a broader problem— theyare joined
by the missiontofix it.Theyunderstandthe needforanecosystemof solutionsandare thusmore
eagerto worktogether.Infact, duringone pilotprogram, 50% of participantsenteredinto
businessrelationshipsorpartnershipswithone anotherfollowingthe program.
An occasional challengewiththisapproachisthatnew fundersorinvestorshave beenhesitant
aboutpeerreviewatfirst;theyoftenvoice aninitial skepticismaboutplacingthe investment
decisionintothe handsof the entrepreneurs.Throughconversationsaboutthe structure and
value of the program,these investorstypicallybecomereceptivetothe concept,butVillage
Capital remainscognizantof thischallengeandhasrecentlyhiredaGlobal Communications
Manager to raise awarenessandmanage communicationwithkeystakeholders.
Achieving therightbalancebetween standardization and customizationofcurriculumis important.
Village Capital acknowledgesthe needtobalance standardizationandcustomizationof curriculum
contentto ensure bothscalabilityandeffectiveness.Standardizationfacilitateseasyreplication
and enablesmaterialstobe testedandrefinedrepeatedly.Customizationandconcrete examples
on howcore frameworksapplytothe specificsectororproblemthe cohortisengagedinamplifies

33
understandingandretention.The challenge isthatdevelopingcustomizedcontentrequirestime
and resources.
To addressthisconstraint,VillageCapital leveragesitsmentorsandlocal stakeholderstodeliver
the curriculumina mannerthatmakesabstract conceptstangible.VillageCapital hasacore setof
frameworksthatare taught by stakeholderswhohave specificexpertise (e.g.,the Louisville-based
logisticshubof the UnitedParcel Service (UPS) wasinvolvedinsessionsaroundsupplysourcing).
Then,mentorsandotherrelevantstakeholdersprovidecase studyexamplesandguidance tohelp
make the lecturesapplicabletothe individual entrepreneurs.
As the programscales, effective monitoring and evaluationwill enablegreaterbuy-in and
engagementwith thismodel.
As thisproblem-basedapproachcontinuestoscale,akeychallenge will be monitoringand
evaluation.Itisimportanttosystematicallytrackwhetherproblemsare beingframedinthe right
wayand solvedby the rightenterprises thatcanscale overtime.Thiswill enablecontinual
refinementof the model andbuy-infromfuture communitiesandsectorstakeholders.
Conclusion
The problem-basedapproachisaninnovative waytoensure thatacceleratorsscale the impactof
impactenterprises.Byfocusingonthe problemitself,Village Capitalcanbettersupport
enterprisesindevelopingbusinessmodelsthattrulyaddressthe problem.Thisplacesthe
emphasisof accelerationawayfromfocusingonindividual enterprise metricssuchasfunding
raisedandrevenue growthandtowardthe trackingof real social or environmental impacts.
As of now,it isunclearwhetherthisapproachismore effectiveinachievingthose beneficial
impactsand itwill take several yearstoobtainsufficientdata.However,thisapproachcan
certainlybe seenasan effective meansof obtaininggreaterexcitementandengagementamongst
stakeholders.Enterprisesare more likelytocollaborate andthe local communityismore likelyto
be motivatedtosolve abroaderproblemversussolelysupportinganindividual organization.
Overall,the problem-basedapproachisapromisinginnovationonhow tomore effectivelysupport
and scale impactenterprises.

34
3
The Social Franchise Accelerator:
Bertha/ICSF/Franchising Plus
Summary of Organizations
Launchedin2014, the Social Franchise Acceleratoristhe firstsocial franchisingsupportprogramin
SouthAfrica.It isthe resultof a unique partnershipbetweenanonprofitorganization,anacademic
institution,anda private consultancy - combiningthe bestof social sectorexpertise andprivate
sectorpractices.Each organizationbringsadifferentperspective tothe table,enablingthe
developmentof a programthat can effectivelysupportthe scalingandfranchisingneedsof South
Africa’simpactenterprises.Anoverviewof eachorganizationisprovidedbelow:
InternationalCentreforSocialFranchising (ICSF)
The International Centre forSocial Franchising(ICSF)isaregisteredUKcharity.Establishedin2012,
ICSFleadsthe social franchisingsectorglobally,servingasapioneerinthe developmentof social
franchisingknowledgeandsupport.ICSFchampionsthe use of social franchisingthroughseveral
interrelatedactivities:advisingclientsonreplicationstrategies,guidingclientsthroughthe
replicationprocess,conductingresearchonreplication,andconveningmarketplayersintoan
action-basedsupportnetwork.
ICSFhas providedconsultancyservicesfornumerousprivate companies,social sector
organizations,andimpactenterpriseslocated inAfrica,LatinAmerica,andAsia.These organization
have focusedona range of differentsectors,includinghealth,education,andemployment
generation.ICSFhasalsoconductedresearchforGirl Effect,BigSocietyCapital,GlaxoSmithKline,
and a group of healthcare organizationsthatincludedGatesFoundationandNovartis.Throughits
Social Franchising
Basedon the principlesof traditional franchising,Social Franchisingisaninnovativemethodof
scalingan impactenterprise byofferingitsproductsorservicesthroughindependent
franchisees.The Social FranchiseAcceleratorisacollaborationamongst three organizations –
the International Centre forSocial Franchising,the BerthaCentre forSocial Innovationand
Entrepreneurship,andFranchisingPlus(seebelow fordetails) –to provide supportforimpact
enterprisesseekingtoimplementafranchise model.
Typically,impactenterprisesneedsignificantresourcestoscale,suchasadditional capital,new
employees,andnewassets.Withsocial franchising,these enterprisescaninsteadleanon
independentfranchisees,whothenhire employeesandacquire assetsontheirown.This
reducesthe resource burdenforthe impactenterprise,enablingittoexpandoperationsfar
more quickly.Inaddition,thesefranchiseescanmore effectivelybuildthe businessinnew
locationsastheyoftenhave more local expertisethanthe enterprise.Overall,the positive social
impactof an enterprise canbe scaledmore efficientlyandeffectivelythroughafranchise
model.

35
social franchise course,ICSFhas alsoprovidedtrainingformanyotherorganizationsinterestedin
thismethodof scaling.18
The Bertha Centrefor SocialInnovation andEntrepreneurship
The Bertha Centre forSocial InnovationandEntrepreneurship(“BerthaCentre”) atthe University
of Cape TownGraduate School of Business(UCTGSB) was establishedin2011 as a centerof
excellence insocial innovationandentrepreneurship.The BerthaCentre conductsresearch,
promotesdialogue,andsupportssocial innovations — particularlythose lookingto scale —
throughrigorousteaching,exposuretoleadingthinkinginthe space,andpractical applicationof
theoryinreal-worldsettings.
To date,the Bertha Centre hashosted more than1,500 impactenterprisesatvariouseducational
eventsandhasprovidedadvisoryservicesandprojectsupportto more than20 organizations.A
brief overviewof the enterprises ithasworkedwith iscapturedbelow:
Franchising Plus
FranchisingPlusisaleading private sectorfranchise consultancyinSouthAfrica.Establishedin
1994, FranchisingPlusdeliversprofessional advisory servicestobusinesseslookingtoexpandtheir
operationsthroughfranchising,licensingandotherbusinessdistributionmechanisms.
FranchisingPlushasworkedwithalarge numberof commercial businessesinSouthAfrica,
includingFirstNational Bank,Goodyear,PicknPay,SABmiller,TimberCity,BatteryClinic,Dis-
ChemPharmacy’s,andNandos.19
FranchisingPlushasalsoworkedona range of social sector
projectsina pro bono capacity and advisedthe SouthAfricangovernmentonfranchisingand
replication.
18
The availability of more quantitative historical data is limited.
19
The availability of more quantitative historical data is limited.

36
ICSFand the Bertha Centre collaboratedin2012 to run the firstsocial franchisingworkshopin
SouthAfrica.The workshopprovidedanoverview of social franchisingandhighlighteditsbenefits
for impactenterprises. More than100 organizationsattended.Followingthe workshop,many
organizationswantedtopursue social franchisingfurther,butthe lackof a social franchisingsector
inSouth Africamade itdifficultforICSFandBertha Centre to connectthese organizationswith
local resourcesand support.Thismarketgap spawnedthe ideafora social franchise acceleratorin
SouthAfrica.
Overview of the New Innovation: Social Franchising
Basedoff the principlesof traditionalcommercialfranchising,social franchisingisessentially
franchisingforsocial good.Itis an innovativewayforimpactenterprisestoscale theirimpact
efficientlyandeffectively. Many
impactenterprisescanoperate
successfully asasmall business.But
scalinghasprovento be difficultdue
to lack of funding,humancapital,the
rightpartners,and overall lackof
scalingexpertise.Social franchising
helpsovercome thesebarriersand
enablesthe enterprise todeliverits
provenmodel byleasingorlicensingit
to independentfranchisees.
Enterprisesdocumenttheirbusiness
modelsandinternal processesin
detailedoperationsmanualsand
provide trainingandongoingsupport
to enable the franchiseestoreplicate
the businessinnewmarketsor
geographies,usingtheirownresources
to do so.Franchiseestypicallypaya
licensingfeetothe enterpriseforthe abilitytocopytheirbusinessmodel,insteadof developing
theirownbusiness. Whileindividualfranchisesmay staysmall,the overall impactachievedbythe
model canbe quite large.
Social franchisingisbeneficial fornumerousreasons. Impactenterprisescanmultiplyimpactand
reach more beneficiariesfarmore quicklythanwouldbe possible if theywere torely solelyon
theirownresources.Scalingismore likelytobe effective asfranchiseestypicallyhave stronger
local expertiseneededtosuccessfullyrunabusinessinspecificgeographies.Franchisingalso
enablesthe impactenterprise tomake betterimpactandinvestmentdecisionsfrommore data
and become more financiallysustainable throughfranchiseefees.Forthe franchisees,thisisan
opportunitytoreceive trainingandsupportfroman experiencedorganizationaddressingasimilar
social needwhile havinglessfinancialriskandfasterimpactas comparedtostartinga new
organizationfromscratch.
The Social Franchise Acceleratorisanew program that supportsimpactenterprisesindeveloping
and implementingtheirsocial franchise strategy.
Social FranchisingExample
FoodCycle – a UK charity that cooks meals for people at
risk of food poverty and social isolation – sought help
from ICSF to scale nationally. ICSF worked with
FoodCycle to:
 Design a franchise system
 Codify key processes, procedures and policies
 Support creation of operations manuals and training
materials
 Support franchisee recruitment and the
implementation of an initial pilot
As a result, FoodCycle launched its franchise program in
summer 2013 and within several months had its first
three franchise FoodCycle kitchens that were ready to
begin operations across the UK.

37
Description of modeland supportprovided forvarious impactenterpriseneeds
The Social Franchise Acceleratorcombinestraining,consultancysupport,funding,andmentorship
to create a comprehensivepackage of supporttohelpimpactenterprisesdevelopa franchise
model andscale theirsocial impact. Giventhatthis acceleratorisnew,the overview provided
belowisa descriptionof itsfirstplannediterationof the program.Asof October2014, certain
elementsof the programare in progressand will be carriedoutoverthe nextseveral months.
To selectenterprisestosupport,the Social Franchise Acceleratorconductsanin-depthselection
process.Enterprisesmustfirstsubmitanexpressionof interest.The Social Franchise Accelerator
theninvitespromisingorganizationstocomplete amore detailedapplication.Inthisfirstiteration
of itsprogram,the Social Franchise Acceleratorusedthe detailedapplicationtofurtherscreen
participantsandidentified10 enterprisestoparticipate inafive-dayintroductorytraining
workshop.
The workshoptaughtparticipantsthe theoryandstrategiesbehindfranchising.FranchisingPlus
delivereditstraditional “FranchisingbyNumbers”course,whichfocusesontopicssuchas
franchise strategyandfranchisee selection.The course wasmodifiedtofocusonsocial franchising.
ICSFdeliveredsessionsonfranchisinginthe social sectorandhow to conductmonitoringand
evaluationata large scale.Duringthisworkshop,the Social Franchise Acceleratorinterviewed
each enterpriseandselectedthree enterprisesthatwouldreceivefurtherin-depthone-on-one
support.20
To be selectedfortrainingormore in-depthsupport,organizationsmustdemonstratetheyare
suitable forfranchising. Suitable businessesare those that have a productor service thatcan be
‘packagedup’or codifiedintoanoperationsmanual andgiventofranchisees.Inaddition,they
musthave a commitmenttoscale,asustainable businessmodel,astrongmanagementteam,and
a strong financial base that couldsupportthe initial costsof franchising.
As part of the in-depthone-on-one support,the Social Franchise Acceleratorreviewseach
organization’sexistingoperations,currentcapabilities,andcapacityforexpansion.The teamthen
providesguidance toeachorganizationonvariousfranchisingoptions,organizationalstructure,
necessarysystemsandcontrols,marketing,andthe ideal franchisee.There are alsosite visitsto
actual franchise businesses(e.g.,McDonald’s)tounderstandhow the process worksinreality.By
the endof thisconsultationsupport,eachimpactenterprise hasdevelopedbothafranchise model
tailoredtoitsorganizationaswell asany necessaryfranchisingdocumentation(e.g.,anoperations
manual).
Enterprisesthenreceive approximately$25,000 to fundsome of the initial one-time costsof
developingafranchise system.The Social Franchise Acceleratoralsolinksenterpriseswith
mentors,whoare highlyexperiencedprofessionalswithpractical social orcommercial franchise
experience.Thesementorsprovide relevantconnectionstopotentialinvestorsandfranchisees
and guide eachenterprise throughthe implementationof aninitial social franchise pilot.
20
While the Social Franchise Accelerator initially aimed to only support three organizations, a fourth enterprise was also selected to receive more limited
support. The fourth enterprise is already using a franchise model, but the Social Franchise Accelerator is supporting it in developing impact reporting
systems and tools that will be integrated into its franchising plans.

38
Belowisa breakdownof howmuchsupportthe Social Franchise Acceleratorprovides
organizationsacrosseachof theireightscalingneeds:
Interim feedback on newmodel
As of October2014, the Social Franchise Acceleratorisinthe midstof itsfirstiterationandonly
feedbackonthe initial trainingworkshopisavailable.These resultsare reflectedbelow.21
The Social Franchise Acceleratorperformedbestinprovidingsupportonbusinessdevelopment
and strategicplanningneeds,whichalignswithitsfocusongivingorganizationsthe tools needed
to developasocial franchisingstrategy.
Workshopparticipants indicatedthatsupportonfinancingwasmostimportant,butdidnotrate
the Social Franchise Acceleratorhighlyhere.Thislowerratingislikelydue tothe factthat the
Social Franchise Acceleratoronlydedicatedsignificanttime onfinancingsupportforthe three
organizationsthathadin-depthsupport.Of the 10 enterprises thatparticipatedinthe workshop,
21
Monitor Deloitte analysis surfaced eight needs of scaling impact enterprises: market research, business development and strategic planning, financing,
supply sourcing and production, sales and marketing, distribution and market access, monitoring and evaluation, and leadership skills and business acumen
* n = 10
How to interpret the survey results?

39
the three that thenreceivedfundingandone-on-one supportratedthe financingcomponentof
the program much higher(average score of 5.33 versusoverall score of 3.40).
Overall,enterprisesfeltthe workshopwaseffective inhighlightingthe benefitof social franchising,
withone participantsaying, “Asa whole,the programmewasincredibly interesting…Itallowed us
to gain a clear understanding of theway forward with regardsto scaling.” However,most
workshopparticipantsexpressedthe desire foradditional time andongoingengagementinorder
to explore andtestsocial franchisingconceptswithintheirownbusiness.Whilethisisprovidedto
the three organizationsselectedtoreceive in-depthsupport,the Social FranchiseAccelerator
acknowledgesthatdevelopingalongerworkshopmayalsobe useful infuture iterationsof its
program.
Operating model
The Social Franchise Acceleratorreliesonphilanthropiccapital and probono support. The
RockefellerFoundation grantfundingtothe BerthaCentre covers variouscosts,including ICSF’s
franchisingmaterialsandbothBerthaCentre’sandFranchisingPlus’time andresource
commitments.Mentorsprovidetheirguidanceina pro bono capacity.This currentmodel is
allowingthe partnerstotestwhethersocial franchisingtrainingscanbe successful.Theycanthen
evaluate howfundsare allocatedandservicesare paidforinfuture iterationsof the accelerator
program.
To ensure continuousimprovementintheirmodel,ICSFandthe BerthaCentre are collaboratingto
designamonitoringandevaluationsystemtocapture organizational capacityandsocial impact.
Monitoringwill be done throughoutthe projectandafteritsconclusion,usingsurveysand
interviewstotrackoutcome data. Workshopparticipantswill be trackedforone yearfollowingthe
project’sconclusion.Those whoreceivein-depthsupportwill be trackedforthree years.
The Social Franchise Acceleratorhighlightedthe followingfactorsascritical to the successand
sustainabilityof itsprogram.
Marketing isnecessary to raiseawarenessand acceptanceofsocialfranchising
Franchisingistraditionallyacommercial concept.Throughitswork inthe UnitedKingdom andin
othercountries,ICSFhasfoundthat manyimpactenterprisesare eitherunaware of franchisingor
resistanttousingaspectsof thismodel.Forinstance, some nonprofitimpactenterprisescanbe
hesitanttocharge a licensingfee,particularlywithinexistingnetworkswhere relationships
previouslyexistedwithoutafinancial obligation.22
Otherimpactenterprisesare concernedabout
the lack of control on theirservicesorproductsinthe handsof franchisees.
To raise awarenessspecificallyonthe Social Franchise Accelerator,the three partnersheldtwo
awareness-raisingeventsaroundsocial franchising,publishedanofficial pressrelease,and
conductedradiointerviewsaroundSouthAfrica.Toraise awarenessof social franchisingin
general,the partnersplantoworkwithotherstakeholderstodevelopandpublishinformative
materialsonsocial franchising,increasingbothawarenessandacceptance of franchisingasa
viable model forthe social sector.The partnersalsoplantomodifyfranchisingtrainingmaterials
to be more customizedforthe social sector,reframingtraditionalconceptsinsocial termsand
workingwithenterprisestoidentifywhichcomponentsof the social franchisingmodelworkfor
22
It is also important to note that social franchising works in a number of ways and does not always involve the franchisees paying a licensing fee; although
the fee is a useful way to compensate the impact enterprise for the time and resources used to train franchisees and oversee their work. In addition, a fee is
a way for a franchisee to signal it is serious about implementing the model correctly.

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