SEED and IB Accelerator partner to connect ventures to capital

Bertil van Vugt
By on April 30, 2015

SEED and the Inclusive Business Accelerator have joined forces to support high potential high growth start-up enterprises that integrate social and environmental benefits into their business model. The partnership will enable winners of the SEED Awards to profile themselves on the IB Accelerator, manage their fundraising campaigns, and connect with mentors and investors.

SEEDSmall, micro and medium-sized enterprises (SMMEs) play a significant role in the global economy, generating employment and helping communities out of poverty. They can contribute to the tackling of pressing social and environmental issues with their entrepreneurial approach of problem solving.

Achieving such a goal can however be hampered as in many developing regions, finance tends to be provided only to larger businesses or to micro-enterprises (from microfinance providers). Two gaps ensue: First, a lack of financial products in the lower investment range, the so-called ‘missing middle’. Second, there is a lack of financial and management know-how within these small and micro-enterprises.

Acceleration
With the SEED Impact Investment Services, SEED offers selected alumni of the SEED Awards access to acceleration support and business advisory services. Participating enterprises will have an opportunity to work through their growth strategies and plans for expansion. As part of this service, enterprises will gain a better understanding of their capital requirements, receive dedicated feedback on how to position their companies for investment, and in certain cases have an opportunity to link up with prospective partners and investors. This is the next step in SEED’s mission to support promising social and environmental enterprises in achieving their full growth potential.

Rainer Agster, Director Private Sector Cooperation at SEED explains: “Many of our SEED Award Winners are seeking loans or equity investments in the range of 20,000 – 200,000 Euros, but this market is currently not sufficiently served. So far we could only identify few local financial intermediaries and international providers of finance which offer products tailored to this target group. Jointly with the IB Accelerator and VC4Africa we hope to facilitate financing to SEED Award Winners and to stimulate financial products for these social and environmental enterprises.”

Ben White, co-founder of VC4Africa adds: “This is a great opportunity to bring together a powerful network of partners under the IBA.ventures umbrella. This collaboration works to connect the dots between SEED and the team at IBA. This includes the work we do at VC4Africa, but also draws from our strong partnerships with SNV and the BoP Innovation Center. Combining our networks and resources is key to establishing a strong foundation for these enterprises to accelerate their efforts.”

Seed awards

SEED Winners
The partnership will enable winners of the SEED Award (an annual global competition running since 2005) to profile themselves on the IB Accelerator. This new online platform was launched in January of this year and is focused on supporting and promoting ‘inclusive business’ ventures. Entrepreneurs can create a venture profile for their business and create a track record by updating their followers regularly.

The focus is on high potential candidates for early-stage equity investments. These companies are seeking funds to expand their existing businesses with operations already for 2-5 years. They should already have a working prototype and/or be generating revenue. Both types of ventures are early stage, defined as post-seed and pre-late stage, and typically require investments of below USD 1 million.

Each venture should be innovative in their use of technology, or in their application of a disruptive business model, and have a high potential to scale. As part of the application process to join each venture is screened for their inclusiveness (meaning that they offer a product or service to the BoP but also include BoP into their business model as employees or in their value chain as suppliers, retailers and/or distributors) and to help ensure positive economic, social and environmental impact.

Fundraising
When the enterprise is looking for funding, he or she can indicate on the IB Accelerator platform that the venture is in ‘fundraising mode’ – which means that registered investors can have a look at the requested amount, type of finance, a filled in quick-scan and uploaded documents. Because they have access to this information the investors will be in a better position to decide if starting a conversation is worth the time.

Impact investors
The goal of the partnership between SEED and the IB Accelerator is to attract potential investors (public, private), who are interested in providing equity investment, grants, loans or finance support services for social and environmental enterprises.

About SEED
SEED is a global partnership for action on sustainable development and the green economy. It supports innovative small-scale and locally driven enterprises around the globe that integrate social and environmental benefits into their business model from the outset. This year SEED celebrates 10 years of SEED Awards, which have allowed the initiative to gather a great deal of experience and ever more tailor it’s support to the specific needs of social and environmental startups in developing countries. For more information: https://www.seed.uno/about/who.html

About the Inclusive Business Accelerator
The Inclusive Business Accelerator facilitates the acceleration of impactful entrepreneurship in Base of the Pyramid (BoP) markets. We do this by building a structure that supports the delivery of substantial numbers of investment-ready inclusive business plans that improve the well-being of people at the BoP. For more information: https://iba.ventures/what-is-iba/