Fundamentals of Funding with Edward Yee from Givfunds (Podcast)
Updated: Oct 22, 2021
WHAT IS IMPACT IN SIGHT?
Impact In Sight aims to gain a regional understanding of the strategic and day-to-day decisions that impact players make, and we will take a closer look into the driving forces behind the space. Season 0 will feature an exciting glimpse into Givfunds, Yonah, and Hatch And the episodes drop every three weeks. Together we can change the impact landscape.
Have you ever wondered what goes on in the minds of impact investors?
Let’s have a closer look together.
WHAT IS GIVFUNDS?
Givfunds aims to transform the global social enterprise environment by providing sustainable capital. They lend low-cost loans at scale to South Asian social enterprises. Through their ecosystem-level approach and tech-enabled processes, they unlock sustainable capital for social enterprises to create greater impact and change lives.
Edward has an incredible eye when it comes to finding founders that are easily overlooked by investors, and in turn, he helps hidden gems achieve the scale that they are destined to reach.
A life-changing trip to Bangladesh has Edward witnessing people giving up what they have to lift up the people around them by using localised and innovative ideas that blew his mind. The magic didn’t stop there as he met his co-founder on a train ride through India who also wanted to give back as much as him and thus Givfunds was born.
Fun fact! Edward has done 25 deals last year, in 2019, which has been significantly more than what a traditional impact investor goes for and he aims to ramp up the numbers in the coming years! We are in for an exciting journey with him.
Sustainable cities and communities happen when hidden gems are given a chance to shine and create the impact that they have to offer. Let's have a look at the episode together and understand what drives the impact investing space!
#1 How witnessing localised ideas changed his perception and motivated him to help impact initiatives thrive
His trip to Bangladesh allowed him to witness how changemakers use everyday tools to their advantage and it has propelled him to be the missing piece to create a sustainability community that works for everyone.
#2 What is the Pioneer Gap and why does it hinder impact from being created?
The pioneer gap is a gap in funding that unfortunately makes social enterprises unattractive to investors even if they are making incredible impact. This hurts the chances of a sustainable society to thrive. Do you find yourself in this recurring pitfall?
#3 The concept of ‘Additionality’ and how this lens help him decide what to invest in
What is an environmentally sustainable society without ensuring the impact created is maximized? Sustainability opportunities need to be optimised to ensure that we are making the best of resources.
Additionality is a concept that he subscribes to make sure the value he creates is meaningful in the long run.
This encourages him to look out for hidden gems and make sure that the investments are helping out lesser-known entrepreneurs to create the most impact for the long term.
The idea of ‘additionality’ can help revamp the impact space, and ensure that investors are maximising the value they can bring to everyone.
Impact In Sight is here to bring you discussions with the industry’s strong impact creating players from the region. Interseed is grown in Southeast Asia. Check out our playlist here!
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Impact funding, localised ideas, micro-businesses, pioneer gap, due diligence, hurdle rates, data and investing, additionality, and gold standard organisations
0:11 What is Givfunds? What makes them different?
01:59 How Givfunds came about and how he met his co-founder on a train journey through India.
06:25 How localised ideas made him realise the change they make and how they can create micro-businesses.
9:25 What is the Pioneer Gap that social entrepreneurs face especially in SEA?
11:47 Why impact investors don't like to look at smaller enterprises stuck in the pioneer gap.
1) Due diligence is long, tedious and expensive. 2) High hurdle rates require a very high level of returns or exit multiples from the social enterprises.
15:13 The importance of working closely with stakeholders to try to do things differently in order to get valuable information and how Givfunds can cut short due diligence by 90% to reach out to the smaller social enterprises.
16:54 The issue of social enterprises that are stuck in the pioneer gap.
17:52 The deals he made recently and what he aims to achieve moving forward.
19:40 How Givfunds evolved from just wanting to solve a problem and the rationale behind the business decisions he made thus far.
23:10 Additionality and the value it creates.
27:40 Knowledge resources he tapped into to understand impact investment. Measuring and Improving Social Impacts: A Guide for Non-profits, Companies, and Impact Investors
29:48 Gold standard investing firms and great organisations in the impact space (Stanford Social Innovation Review (SSIR), Rockefeller Foundation, Acumen Fund, Asian Venture Philanthropy Network (AVPN), British Council, Global Impact Investing Network (GIIN) and IRIS).
32:41 His process of applying for the Rhodes scholarship and what he gets out of it to contribute back to the impact space.
41:05 His unconventional educational journey.
42:33 His advice for people aspiring to make an impact.
45:20 Where to find Edward and Givfunds:
Organisations mentioned in order of reference:
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