My friend Kalsoon Lakhani launched one month ago, her startup, Invest2Innovate. With Kalsoom I share some interesting common points. Both young, into social entrepreneurship and both believing that a strong ecosystem and cultural aspects are of high importance in emerging markets.
It is interesting to watch how ecosystems develop, especially if you are part of the development itself.
I started my organization, Invest2Innovate (i2i), in order to take this ecosystem approach into the untapped markets for social entrepreneurship.We are a global social enterprise that matches investors and funders with social entrepreneurs focused on building sustainable enterprises, cultivating the local, regional, and global partnerships and collaborations necessary to grow this space.
A quote, from Kalsoom’s post on SoCap
1. What is the story behind i2i? How did you take the decision to make it happen?
I had been working in the venture philanthropy space for the past 3 and half years, directing Social Vision (of ML Resources) and providing hands-on support & seed funding to social entrepreneurs & innovative non-profit initiatives in their early stages, mainly in Pakistan. I soon found myself eating, breathing, and sleeping all things related to the “Socent” space. But I also was perturbed by the numerous disconnects, especially in regard to access to capital, that was evident. There is a perception on the ground that there is not enough capital to fund the numbers of social entrepreneurs entering the space. But when you look a little closer, you see that there is a lot of capital (philanthropic, impact investment, etc.), it’s just concentrated in more well-developed markets – investors/funders are working a lot in East Africa, India & Latin America (esp. Mexico & Brazil). We have seen the growth of a broader ecosystem in these markets, which is not perfect or fully developed, but it allows for the relative growth of entrepreneurship and innovation. But what about the “untapped” markets? As a Pakistani who has worked on social entrepreneurship in Pakistan, I felt that those disconnects could be tackled if we took a broader ecosystem approach into these more “under developed” markets. Invest2Innovate provides tailored services to social entrepreneurs in order to grow their businesses and match them with funding, but we also are developing local mentor & investor networks, as well as partnerships with incubators, universities, etc. to not only to grow the ecosystem, but to grow it locally. Our pilot market is Pakistan, but we aim to expand to new markets within the next three years (some countries on the short list include Sri Lanka, Egypt, and Cambodia).
2. Regarding investors: i2i is a social enterprise itself and it is said that convincing investors for social startups is quite different than just pitching any commercial project. What have you experienced?
The target investor demographic is quite different. A traditional investor is obviously looking for a high financial return on their investment. When I was at the Social Capital Markets conference in San Francisco last week, Kevin Starr of the Mulago Foundation made an important point when he stated that high [social] impact rarely equals a high [financial] return. The growth of the impact investment community (investors who are investing capital for social/environmental impact with some measurable financial return], means we are having a different kind of conversation. Impact investors know they may only get their principal back or even a 10-11% return, but they are swayed by the social impact that is magnified by this type of funding; that it can be more magnified than traditional grant-style funding.
That being said, there are still a lot of critical and honest conversations we need to have that I still don’t think we are having, at least openly. Impact investors want to see a significant social or environmental impact, but they aren’t just warm & fuzzy. They care about returns too. And as social entrepreneurs who are all dedicated to poverty alleviation in the countries we work in, we need to also understand those expectations. We need to get to a point where we can see “eye” to “eye” (i2i – get it?! ta-da!).
3. Some time ago, we had a discussion around the importance of culture in the social entrepreneurship space. Your thoughts?
That is such an important discussion. Social entrepreneurship has become a relatively “sexy” term in the West. But we can’t just import that approach into other countries and low-income communities and expect magic to happen. There needs to be a local and more genuine growth of social entrepreneurship in these communities, perhaps inspired or influenced by lessons from the West (a lot of social entrepreneurs in Pakistan right now, were educated abroad, but come back after their studies), but applied in a culturally nuanced way that makes sense within local parameters. We also need to recognize that a lot of people are already “social entrepreneurs” they just didn’t know they were. There’s a need to raise awareness about what that term means, and how to be inclusive of the numbers of small and growing businesses already providing services and products to low-income communities.
4. Social entrepreneurship is a new space for Greece. I believe that it is one answer to the crisis the country is facing, which is not only financial in my eyes. Your thoughts on Greece and the role of social entrepreneurship
There is obviously a number of internal grievances in Greece, and unemployment numbers are relatively high at the moment. The promotion of entrepreneurship as a whole can be a solution in terms of job creation and income generation, and social entrepreneurship can be a tool in bringing power, capacity, and ownership back to Greek citizens, especially if it’s channeled in a impactful and culturally nuanced way. There is evidently a need for dialogue to occur, and the role of social entrepreneurship within the Greek context can and should be a significant part of that conversation.