I dream big when it comes to my aspiration to lead and deliver social change. I am thankful to the LSE Master of Public Administration (MPA) programme which supported my hope of leading a team of MPA students to represent LSE in the MBA Impact Investing Network Training (MIINT) at the Wharton Business School.
The UK National Advisory Board to the G8 Taskforce identifies Impact Investing as “investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return” (UK NAB report to G8 Taskforce, 2014, p.5).
The MIINT is experiential training designed to give students a hands-on education in social impact investing via a competition format. All student participants come from twenty of the top global business and graduate schools and this year, LSE joined Harvard, Columbia, Kellogg, Chicago Booth and others. The training culminates in a final pitch at Wharton, where each team presents the case of a company to the MIINT Investment Committee for the chance to win it up to a $50,000 investment as a part of an existing seed round. A second prize is for the amount of $25,000. MIINT is run by the pioneering impact private equity firm, Bridges Ventures through its impact advisory team Impact+ and in partnership with:
- Wharton Social Impact Initiative
- Bank of America Merrill Lynch
- Goldman Sachs’ Urban Development Fund
- Impact Engine and others
Many people have asked me why I was so passionate about bringing MIINT to the LSE and more specifically, to the MPA. My answer is simple – I believe in impact investing as the emerging sustainable way of driving impact through capital markets. It is only natural that MPA students who specialise in measuring impact of interventions would join this sophisticated competition and industry. Everyone wants a better society and I belong to Generation Y who truly thinks that doing well involves doing good. Impact investing is the strategy of our times and delivers social impact by the financial industry through businesses with social or environmental goals. It is not a new revolution but rather a modern and sustainable application to a known concept.
My belief in impact investing also draws from my experience in working on the financial inclusion of Small and Medium sized Enterprises (SMEs) and impoverished populations in my home country of Israel. Working to improve their limited access to financial literacy and affordable debt and equity, I learned the only way that many may participate in the economy is by impact investing.
Furthermore, since I attended a talk by Sir Ronald Cohen about Social Impact Bonds in Tel Aviv, I have keenly followed the global and UK impact investment industries. By training, I am a lawyer and worked as a business consultant and SME policy specialist so it was only natural I became fascinated by joint ventures between private investors, charities and the government to drive social and environmental impact in the UK.
As I began my MPA studies in 2014, I learned practical policy solutions are now offered by impact investing to deliver social impact. There is a long way to go until the random person on the street would know what impact investment is, but this field has been growing fast. I am one of its many supporters who aspires to see more innovative financial instruments to have a “triple bottom line” – return, risk and impact.
The MIINT competition journey
I worked during the summer vacation to establish a team with the best mix of social and financial skills. Our MIINT LSE team also included Hana Chambers, Dinker Bhardwaj, Ingrid Von-Schiller, Jaime Alejandro Urrego, and Jacob Simunovic. Together we offered professional experience in diverse areas including social business consulting, analytics, impact and program evaluation, education, SME finance, agri-business and biotechnology; needless to say we all care deeply about the social impact potential of business. In our investment thesis (the first deliverable) we stated our focus on UK technology-driven start-ups working in the areas of healthcare and education.
The MIINT prize demanded specific investment criteria so we looked for an early stage investment that was in the range of $25,000-$50,000 in a total round size of $250,000-$750,000. The investment structure was required to be equity or convertible debt and the investment style was of growth capital and minority investment.
Our strategy was to evaluate investment opportunities based on a start-up’s management competency, financial performance and social impact. The latter was extremely important for us as we believe that robust impact evaluation enables social enterprises to grow, creating proof of concept for public policy. In addition to core financial skills and industry experience, our team had unique capabilities to thoughtfully measure and evaluate impact as our MPA studies equipped us with expertise in the use of empirical and quantitative evidence – which distinctly set us apart from the MBA teams.
As we progressed through the training, we networked with alumni, business agents and impact investors in London and abroad. We also participated in MIINT webinars with the industry’s professionals including the Head of Social Investment and Finance at the UK Cabinet Office. In the preparation stages, I learned it is imperative to identify the alignment between financial returns and the start-up’s social impact. In other words, finding the right configuration, and not a trade-off between financial goals and impact goals, requires rigorous thinking to ensure that both the financial return and social impact are designed to go a long way together as the company grows.
Our recommended company for investment and why:
We pitched our recommendation to invest in a UK social biotech start-up that matches safe drugs to rare diseases. There are 350 million people in the world who suffer from rare diseases and while over 7,000 rare diseases are known to science, less than 5 percent have a cure. This start-up targets patients that Pharmaceutical companies are often neglecting because it is unprofitable, expensive and time consuming for Pharma to develop drugs for them under usual marketing conditions. This start-up also has great financial prospects because it offers services to improve the Pharmaceutical industry’s drug repurposing.
The process of pitching our chosen start-up practically complemented our MPA studies. We used MIINT as an exercise to real-life where we had to think hard on how should a business that seeks profit should commit to measure social impact. Additionally, it was a fantastic opportunity for professional development and networking with impact-passionate students from other top schools.
In April 2016, I flew with Jacob Simunovic to Wharton to represent our LSE MPA team. It was very fulfilling to experience the culmination of a year in which I led the first team from the LSE and the only non-MBA team to compete. Unfortunately, we were narrowly beaten by the second runner-up from London. Although we were disappointed, it was an invaluable experience which further honed our financial and impact evaluation skills. I learned a lot about all the stages involved in an impact investment deal, and mostly on the due diligence process.
I am glad to say that on the basis of our pilot experience, the LSE Institute of Public Affairs and Bridges Ventures will continue to host MIINT to develop this milestone into a legacy for the LSE community. The MIINT final was an exceptional opportunity to practically experience an actual social impact investment deal. I recommend all MPA students to apply to form teams for next year intake. Good luck!
Dana Elman Vishkin is in her second year of the LSE Master of Public Administration.