Making The Market: Social Venture Fund


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Bob Pattillo,
Founder, Gray Ghost Ventures.

Bob Pattillo's presentation from the 2009 Take Action! Impact Investing Conference in San Francisco.

Published in: Business, Economy & Finance
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Making The Market: Social Venture Fund

  1. 1. In the beginning there was……. 1
  2. 2. Which led to……. 2
  3. 3. Portfolio One•$10mm in developing market enterprises;•GMC Exempt Entity (Operating Foundation)•Greatly exceeded financial, social expectations•Eight investments in 38 months;•Six have secured a 2nd round of financing;•Four do not appear to have a need to raise additional capitalover the next 12 months;•No write-offs 3
  4. 4. Problem: 1.6 billion people light with kerosene•Annual cost of $38 billion;•1.5 tons of carbon dust per lamp every 5 years;•Toxic fumes;•Thousands burned & maimed in fires. 4
  5. 5. Solution: Rechargeable LED Lamps•100X greater duration than fluorescent•Optional solar charger;•Mini-power station;•Seven month payback from kerosene savings;•11% increased productivity;•Partnering with MFI’s•Sales: > $1.2 million*Bonus* - Extra 1.4 hrs homework per child/lamp. 5
  6. 6. Problem: Microentrepreneurs lack pricing info, internet accessSolution: Cell phone access to market info, buyers & suppliers•Bangladeshi farmers now gross 40% more;•Service is free due to the increased SMS text traffic. 6
  7. 7. Drive-by wifi and supply chain 7
  8. 8. Remittances by cell phone without a bank account 8
  9. 9. Co-Investors Include: The Barred Rock Fund Omidyar Network UPSGarage Technology Ventures Draper Fisher Jurvetson 9
  10. 10. Portfolio Two•$35mm for profit fund;•Fiduciary investor (DOEN)•Focused on emerging market mobile phone technology;•Hired the former CFO T-Mobile to lead fund management;•70% focus in India; one of the few ways to participate in thebooming economy; – 6.4% projected GDP growth; – largest middle class in the world; – 440,000,000 mobile phones in use•$30mm raised to date;•Open to select investors. 10
  11. 11. Why start a separate fund??? GGV Equity GGV Social Investments GGV Social Investments DOEN Participaties BV Plan LLC Holdings LLC Holdings LLC (Netherlands) (USA) (USA) (USA) Member Member Member Sub-Advisor Gray Ghost-DOEN Investment WWV/Management & Agreement Other Countries Cooperatief, UA Manager Investment Portfolio Operations LLC Third Party (Netherlands) (USA) Provider (India) Global Investment Investment Manager Agreement Manager for Sonalten Netherlands ATC Fund & its Corporate Services Ventures Ltd (Cyprus) Cyprus Provider for domicile Subsidiary purposes [FVCI] Custodial Agreement Indian Investment Portfolio FVCI Custodian 11
  12. 12. Financials Total Equity $35,000,000Portfolio Performance (Gross IRR) 26.6% Returns to LPs (Net IRR) 20.1% Average Hold Time (Years): 6.0 Average Cash/Cash Multiple: 3.4X 12
  13. 13. www.grayghostventures.comHandouts available or contact Jennifer McReynolds at (678) 365-4734 13
  14. 14. www.grayghostventures.comHandouts available or contact Jennifer McReynolds at (678) 365-4734 14
  15. 15. 15