April 2011
Agenda1) GBF Video2) Overview of GBF3) How do measure impact? )                  p4) Questions & Answers
GBF Video  Click on the image above to view GBF’s Video
Our Mission Develop innovative, scalable models that provide  sustainable economic opportunities to millions of people  a...
GBF: What We DoBuild and support High-Impact Businesses that provide sustainable economic opportunities to millions of peo...
GBF Approach                   Donors                            Investors               Grants                           ...
Investment and Value-AddProcessGBP: Capacity  Building                 Structure &                 St   t Evaluate    1   ...
Our Team Harold Rosen, CEO                    Agnes Dasewicz, COO    IFC – decades of investment         Impact Investin...
Our AdvisorsBoard of Directors:                     GBF advisors:  Iqbal Paroo                            Jim Wolfensohn...
GBF Capacity Building Total funds deployed: $2.3 million * Lessons learned:                                             ...
GBF Portfolio Snapshot 5.8% Current Yield*              Committed Investment                                  Committed I...
Portfolio & Financial Returns
Agribusiness                                                Agribusiness                                                GB...
LATCO InternationalModel for agricultural processing ecosystem: Improve efficiency and quality through trainingAAccess t...
GBF’s Impact       • GBF’s High Impact Businesses have generated economic opportunities for over 1 million         GBF s  ...
Measuring Impact & Performance GBF uses metrics to improve enterprise performance:     Best of breed framework:       Im...
GBF Activities: New Initiatives                                                       Enhanced Business        New Partner...
What Differentiates GBF? GBF transitions companies from social to commercial  capital   I    Innovative i           ti i...
Looking ForwardGBF has built a strong foundation to:Scale: Provide sustainable livelihoods toat least one million benefici...
University Partnerships
Ways to Get Involved with GBF Summer Field Internships (MBAs) Summer DC Based Internships (                             ...
Annex Slides
Social Return on Investment (SROI)Social Return on Investment (SROI) is used tocalculate the:   Estimated   E ti t d quant...
Calculating the SROI       • Identify the BoP beneficiaries and the type of impact created by theStep 1   business model* ...
Progress Out of Poverty SurveysWhat exactly is a POP survey?    •A fully customized tool of approximately    15 easy t ans...
Client Feedback SurveysWhy conduct a client feedback survey?•   Allows for improvement of services provided•   Creates an ...
Survey Results       49% of surveyed HAI      Selfina borrowers see       producers are living     a positive correlation ...
Survey Training/ Administration
Survey Snapshots/ TrainingTraining HAI staff onsurvey aggregator toolTool custom built in excelw/ immediate reportsproduce...
Survey Aggregator/ DropBox
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Grassroots Business Fund

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This presentation was delivered to the International Transactions Clinic at the University of Michigan Law school on 11 April 2011.

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Grassroots Business Fund

  1. 1. April 2011
  2. 2. Agenda1) GBF Video2) Overview of GBF3) How do measure impact? ) p4) Questions & Answers
  3. 3. GBF Video Click on the image above to view GBF’s Video
  4. 4. Our Mission Develop innovative, scalable models that provide sustainable economic opportunities to millions of people at the base of the economic pyramid. Create jobs, income and wealth for the poor Help improve the field of impact investing“Supporting High ImpactBusinesses is a more effectiveMeans tM towards b ildi stronger d building teconomies in developing countries”
  5. 5. GBF: What We DoBuild and support High-Impact Businesses that provide sustainable economic opportunities to millions of people living at the base of the economic py g pyramidInvest return-based patient capitalCapacity Building/Technical Assistance  Corporate g p governance  Financial planning and controls  Sales and marketing  Manage growth through metrics “GBF is a leader in making sure their investees are part of the discussion. They provide what we are requesting, and while doing that, think of other ways they can help” - GBF Client from FSG Review
  6. 6. GBF Approach Donors Investors Grants Debt & Equity Capital GBF GBP GBI-I GBI I Shared Resources Capacity Building Debt, Equity & Quasi- Grants Blended Investment Approach Equity capital High Impact Businesses Micro Other BoP Farmers Artisans Entrepreneurs Beneficiaries
  7. 7. Investment and Value-AddProcessGBP: Capacity  Building Structure & St t Evaluate 1 Allocate Resources 2 Implement I l t 3 Add Value V l 4 Report R t 5 Exit E itGBI‐I: Investment Capital Oversight: Appraise & 1. Pipeline Review (GBP  Senior Management) Identify 1 Structure 2. ED, CIO, COO, Portfolio Advisory Committee, BoD 3. ED, COO, Portfolio Managers ED, COO, Portfolio Managers Investment I t t 4. CIO Portfolio Management Meetings Select GBP investments incubated  with  capacity building  and sold to GBI‐I 5. BoD “GBF has a good understanding of our business. They are willing to try different financial instruments to help” help - GBF Client from FSG Review
  8. 8. Our Team Harold Rosen, CEO Agnes Dasewicz, COO  IFC – decades of investment  Impact Investing with IFC experience  Emerging markets private equity  Created microfinance and SME  Founding team of one the largest investment practices SME funds  Founded GBIInvestments & Capacity Building Team: Legal:  Christine Phillpotts (JPMorgan, Kenya Women Finance Trust)  Alycia Kellman (Dewey & LeBoeuf LeBoeuf, FINCA)  Jaime Ramirez (IFC, Gone Rural - Swaziland)  Pro Bono: Arnold & Porter,  Patricia Sosrodjojo – Thailand (Booz Allen, Lehman, Aitken Gump Centre for Microfinance) Metrics:  Natasha Barantseva (Rassias Foundation, IFC)  Rafi Menachem (BearingPoint, IFC)  Puneet Jhajharia – India (AXA Financial, Goldman Sachs)  Allison Basile (Grameen Foundation)  Vinay Bachireddy – Kenya (Barclays Capital)  Soha Ehsani – Kenya (Techoserve)  Shi Shiva Sh k – I di (J h H Shanker India (John Hancock) k)  Eliot Marcus – Ghana (NRDC – Beijing)  Rebekah McKnight (UNDP)
  9. 9. Our AdvisorsBoard of Directors: GBF advisors:  Iqbal Paroo  Jim Wolfensohn (former President & CEO, Omidyar) (former World Bank President)  Toshiya Masuoka  Elaine Wolfensohn (Director, IFC) (VP, Botwinick-Wolfensohn Foundation)  Andrew Adelson  Lars Thunell (former Alliance Bernstein CIO) (IFC Executive VP & CEO)  Percy BarnevikInvestment Advisory Committee: (former ABB CEO)  Jo Schwenke  Alan Patricof (Former Managing Director, Business (Apax Partners; Founder, Greycroft LLC) Partners)  CP Zeitinger  Helmut Paul (Chairman, ProCredit) (IFC)  Kash Rangan  Michael Barth (Co-chair, HBS Social Enterprise) (FMO; Senior Director, Darby) Director  Andrew Adelson (former Alliance Bernstein CIO)
  10. 10. GBF Capacity Building Total funds deployed: $2.3 million * Lessons learned: GBF Capacity Building to Date*  Pre investment assistance needed Pre-investment  Management (especially financial) largest gap  Not only entrepreneurs, but also their clients and suppliers need capacity building  Most needed capacity building done by GBF staff (64% of Staff time in 2010) Piloting new initiatives to raise standards  Embedding managers in portfolio companies  Challenge Fund to support capacity building needs through specific technical assistance “GBF is doing the stuff that won’t otherwise get done. grants Earlier stage investments require more handholding and they integrate both.” - GBF Client from FSG Review Note: The cost of staff led business assistance is not included
  11. 11. GBF Portfolio Snapshot 5.8% Current Yield* Committed Investment Committed Investment Portfolio by Sector ($8.4M) Portfolio by Sector ($8.4M) 69% of the total portfolio is invested in loans and quasi- SE Asia 8% Artisanal equity structures, with the 12% remaining 31% invested in Latin Innovations in America preferred or straight equity. 31% Finance 18% All investments are in for- South Asia BoP Services profit companies. 16% 31% Most investments range from Africa 45% Agribusiness $200,000 to $800,000 39% (excluding smaller working capital loans). Average investment size has already increased, and is likely to “The stage and size of their investments is great. The smaller $200-$500K reach the $500,000 - $1 space doesn’t have many players. They can also do debt, equity, and grants.” million range. - GBF Client from FSG Review Note: Current yield on outstanding provisioned portfolio and does not take into account updates (convertibility options, etc)
  12. 12. Portfolio & Financial Returns
  13. 13. Agribusiness Agribusiness GBF’s Investment, Over $3,000,000 In Sub-Saharan Africa, agriculture to date accounts for approximately 2/3 of Average Investment employment and 1/3 of the economy* ~$300,000 Size Crucial to providing economic opportunities for millions of smallholder Number of farmers 11 Investments 80% of agricultural labor in Sub-Saharan g Africa is performed by women* Ghana, Tanzania,Key issues that GBF will help clients Countries Kenya, Bolivia, Peru, address: Cambodia, India  Product/geographic concentration Number of farmers  Price fluctuations ~2.6 million directly impacted  Lack for farmer/supplier loyalty  Introduction to new markets  EExport-related risks t l t d i k  Quality control & standards  Export contract structure *Gates Foundation Gates
  14. 14. LATCO InternationalModel for agricultural processing ecosystem: Improve efficiency and quality through trainingAAccess to markets through links with W t t k t th h li k ith Western b buyers Economic value through working capital, ownership for farmersGBF i investment and Capacity B ildi t t dC it Building: $700K for equipment, transport; ISO 9000, HACCP certification, improvements in farmer training, financial management, improved g g p governanceResults: Sales growth 41%/yr, cash flow positive business Exporting to 8 countries – Japan #1 Farmer associations add value by pre-processing seeds Ownership of tools through financing from Latco
  15. 15. GBF’s Impact • GBF’s High Impact Businesses have generated economic opportunities for over 1 million GBF s people, and improved the lives of an additional 4.8 million in Africa, Asia and Latin America.* • 98% of the people impacted by GBF’s portfolio companies live in countries with a GNI per capita of less than $1,200 per annum. Total People Supported By Sector Total People Supported By Sector (Wealth Creating Activities) (Cost Savings Activities) Agricultural Mobile Technology Agribusiness Banking 2,125,007 Innovations in 55,048 377,388 Finance 173,678 Lighting 226,458 Artisanal Jobs 106,266 106 266 60,288 60 288 Clean E Cl Energy 2,508,162Total:334,992 Total: 5,297,303 Total: 5,884,177 , , * As of December 31 2010 31,
  16. 16. Measuring Impact & Performance GBF uses metrics to improve enterprise performance:  Best of breed framework: Impact Planning, Assessment, and Learning (iPAL) I t Pl i A t dL i  Blended metrics approach: financial, social, operational  Social Impact Review verify number of people reached  Surveys, Progress out of Poverty, Client & Verification  GBF Social Return on Investment (SROI): directional but not determinative Opportunity to contribute back to the field:  Co-host annual industry metrics workshop with Aspen Network of Development Entrepreneurs (ANDE)  Global Impact Investing Ratings System (GIIRS) “Pioneer fund” Emphasis on making it useful to the business p g
  17. 17. GBF Activities: New Initiatives Enhanced Business New Partnerships Assistance Building Local Platforms:  Embedded Managers Angel clubs  Place mid and top level managers in Local banks/funds investee companies – top need of allTest models such as co-funding new clients investments, enhancing credit lines, or mobilizing parallel funding from other deals  Challenge Fund (ProCredit, Rabobank)  Facilitate a means for investees to collaborate and develop solutions to Corporations share with other businesses  Help expand corporate services and build capacity to offer affordable services at BoP  iPAL Expansion (BrazAfric)  Utilize findings from iPAL to enhance targeting of Business Assistance and Technical Assistance Providers operations improvements;  Work with specialized TA providers to start verification; develop new financing models to leverage target environmental and their work (Transfair) labor standards
  18. 18. What Differentiates GBF? GBF transitions companies from social to commercial capital  I Innovative i ti investments – wealth b ildi t t lth building  Industry leading capacity building Provides a hands-on and flexible, patient capacity building - tailored to meet the specific needs of the investees GBF combines investing with field-building s building a more accurate and persuasive g p case for impact investing Leader in measurement and transparency–financial performance and external impactsof its investments
  19. 19. Looking ForwardGBF has built a strong foundation to:Scale: Provide sustainable livelihoods toat least one million beneficiariesFollow On Funding: Investees becomeself-sustainable: 75% of our investees gainaccess to commercial capitalInvestment: Achieve 5 to 8% return oncommitted capital over the next 5 yearsSustainability: Make GBF sustainable as anorganization and reduce dependence ongrantsInnovation: Build new industry model(s)
  20. 20. University Partnerships
  21. 21. Ways to Get Involved with GBF Summer Field Internships (MBAs) Summer DC Based Internships ( p (Undergrads & MBAs) g ) Winter Break/Spring Break Field Internships (Huntsman Program)For more informationon GBF, please visitour website atwww.gbfund.org
  22. 22. Annex Slides
  23. 23. Social Return on Investment (SROI)Social Return on Investment (SROI) is used tocalculate the: Estimated E ti t d quantifiable social-economic i tifi bl i l i impact t that a business will generate; and Project the number of beneficiaries the High Impact Business will reach with additional investments On average for $1 dollar invested into GBF’s portfolio enterprises,  $16 of social‐economic impact is generated (As of December 31, 2010)
  24. 24. Calculating the SROI • Identify the BoP beneficiaries and the type of impact created by theStep 1 business model* • Link the quantifiable impacts to the financial model using SROIStepSt 2 template • Project the number of beneficiaries in future years*Step 3 p • Estimate the total economic returns, including terminal value inStep 4 perpetuity at a 5% discount rate • Estimate the total amount of external financing, including future roundsStep 5 • Calculate the SROI ratio of the High Impact BusinessStep 6 **Assumptions are used in calculations when data does not exist p
  25. 25. Progress Out of Poverty SurveysWhat exactly is a POP survey? •A fully customized tool of approximately 15 easy t answer questions – i l di to ti including type of housing material, education level, and access to basic services •Designed to help benchmark the socio- economic standing of beneficiaries against available national statistics and tools (Ex. Grameen Progress out of Poverty Index, Index USAID PAT, MDG indicators) • Allows GBF to demonstrate the degree to which our client enterprises’ enterprises operations improve the lives of their beneficiaries •Helps to verify/revise assumptions used in the SROI p y p
  26. 26. Client Feedback SurveysWhy conduct a client feedback survey?• Allows for improvement of services provided• Creates an open forum to share opinions and suggestions on improvements and current performance• Helps ensure a partnership approach where all sides are in tune to each otherWho is surveyed? 1.Beneficiaries/Clients about GBF’s Investee GBF s Social Enterprises 2.GBF’s Investee Social Enterprises about GBF
  27. 27. Survey Results 49% of surveyed HAI Selfina borrowers see producers are living a positive correlation in below $1 25 per d b l $1.25 day the loan size th th l i they and are considered by receive and the USAID to be in increased profitability “extreme” poverty p y o their business of t e bus ess 32% of LATCO With over 5,000 International farmers in surveys collected 44% their fi t th i first year with th ith the of LabourNet (LN) company are living below workers are seeing the absolute poverty line, higher quality of work and that percentage drops to 13% for farmers who because of the LN have worked with LATCO training they received for at least one season.
  28. 28. Survey Training/ Administration
  29. 29. Survey Snapshots/ TrainingTraining HAI staff onsurvey aggregator toolTool custom built in excelw/ immediate reportsproduced 29
  30. 30. Survey Aggregator/ DropBox

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