The MBA Impact Investing Network & Training (MIINT) is a hands-on programme run by the Bridges Impact Foundation and Wharton’s Social Impact Initiative to give students first-hand experience of what impact investing is like. “There’s real money on the line,” says Nicole Kamra, an MBA student at London Business School. “This isn’t just a PowerPoint of what happens, this is real people and dynamics.”
The LBS team, represented by MBA 2019’s Saba Ahmed, Katherine Mellis, Yue Tang, Shyan Khaleeli and Nicole Kamra, convinced a judging panel at Wharton to pursue a potential investment in Sehat Kahani, a healthcare start-up in Pakistan. Despite high representation in Pakistani medical colleges, over half of trained female doctors abandon professional pursuits in order to care for their families. Sehat Kahani allows them to work by linking them to underserved patients via videoconferencing. It was founded by Dr Sara Saeed and Dr Iffat Aga, two local female doctors in Pakistan, explains Kamra. “We chose to represent this female-founded company in a region where we had ties.”
The London Business School (LBS) team was one of 25 finalists, each representing their universities at the MIINT finals after taking part in the six-month scheme. “We were the only non-US school that made it to the final top 5 and we were the only non-US company,” says Kamra. “It was interesting to see how the lenses were so different. LBS is so international.” Through the personal interactions with the company she gained a good sense of what she is likely to be doing if, as planned, she goes into the impact investing space after she graduates in the summer of 2019.
Here’s what else she learnt along the way.
1. Impact doesn’t mean the same thing to everyone
“You’re looking for businesses that have both financial and social returns – but that gets measured very differently by different firms. One of the companies in one of our internal rounds presented a healthcare device, which led to a discussion around, is healthcare impact? The granularity is really interesting. With Sehat Kahani, it’s about changing the paradigm to connect women with work in a way that they wouldn’t have been able to before.
2. Investors like lockstep businesses
“A lot of impact investors look for lockstep businesses, where growth and profits go hand-in-hand. As they do more business, they make more money. That’s the case with Sehat Kahani: the more healthcare they provide, the more revenue they generate. But it’s common that those two go antagonistically in a company – and when they’re looking for investment, you often see companies where making money and having an impact diverge.
3. This is not a bias-free zone
“Even in impact investing, where you’re trying to get capital for people who don’t have the highest financial returns, the investors have biases around where the founders are educated, whether they look like the VCs who are investing in them… a lot of these funds are now setting boundaries around, say, founders who do not come from the US, or who come from lower-income demographics. But, even in this investment space, the trends that you see in VC and private equity – where female founders get only 2% of all funding – persist.
4. The impact has to be measurable
“We looked at impact over the short, medium and long term. In the short term, you can measure the number of consultations carried out – the more people who see doctors. In the long term, we’ll hope to see a reduction in the infant mortality rate or maternal mortality rate. We can also measure how this company is helping change stigmas in the country. We’d like to see more women doctors go from not working at all to working through telehealth to working in hospitals. So there’s an impact on the social side as well.
5. Doing your due diligence is essential
“We worked with one of the founders specifically to go through the business models that we had, we interviewed doctors and we did a lot of market research on the healthcare landscape in Pakistan: what are the different opportunities, what are the exit opportunities, looking at the financials. You need to have a sense of where the company is, even if at the end of the day you’re betting more on the idea, the founders and the traction.
6. You need to be able to tell a story
“We talked so closely to the company’s founders, we realised we were taking the point of what they were doing for granted. In order to present our pitch to the judging panel, we really had to learn how to tell the story. How do you boil down hours and hours of information that you’re so excited about into a 10-minute presentation? How do you share the story in such a way that they will see what’s so exciting about it? We focused on the doctors and the patients so we could say, look, here they are. Here’s what they represent and here’s how they connect.
7. Bottom line, it isn’t charity
“People unfamiliar with it may imagine there’s a little less due diligence, that it borders on charity. But no: the investors wanted really clear business fundamentals as well as impact. They wanted returns. They’re also looking to make impact investing a larger asset class and prove that those returns exist. At the same time, they want to make sure they stay as impact businesses and don’t divert from that model. The key takeaway was that impact investing is not a fluffy charity asset class. These are real deals being done to generate returns.”
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