I have had the privilege of interning with Helen Ng, Acumen Fund’s Housing Portfolio Manager, for the past couple of months, and I wanted to share some perspectives with you. I hail from the private sector and am currently a business school student at Columbia here in New York City. It’s been a fantastic ride here at Acumen Fund, and an eye-opening one at that.
One thing that I learned quickly was that Acumen Fund truly embraces the importance of addressing problems faced by the BoP with a business mentality. When we look at potential deals, the first litmus test is always: “is this an economically-viable business model?†With several ex-Wall Street-ers at Acumen, concepts such as cash flow and ROI invariably work their way into discussions about potential and current investments. And for the strategy buffs out there, frameworks such as Porters Five Forces are tools that are helpful in vetting triple-bottom line businesses as well!
This type of analytical rigor is part and parcel of a disciplined portfolio evaluation process. I sat in on a portfolio review session recently, and was blown away by the team’s in-depth, holistic approach to evaluating portfolio investments. Not only were topics such as management quality and barriers to entry discussed (areas that any VC would lay awake at night thinking about), but an investment’s ability to generate knowledge for the BoP development space is valued highly as well. And that’s what I appreciate so much about my Acumen experience. The billions of poor who subsist on less than $4 a day are treated as partners and shareholders. All major decisions are made with the BoP in mind.
Outside of Acumen, I am busy finishing up my first year at Columbia Business School. Students are incredibly in tune with new development models, as pioneered by visionaries such as Acumen. In fact, students recently launched Microlumbia, the first microfinance fund of its type initiated by any business school program. The fund will make its first investment in the near future, so stay tuned for more.
Gerald,
Keep up the good work and keep fighting the good fight! Basic housing is so fundamental and lacking in so many places. We’re working to address housing for a tiny sliver of the population in Mexico, and its still a tremendous effort.
I hope that you represent the ‘wave of the future’. We need first class students with a business mindset to be attracted to Social Enterprise.
Happy Earth Day!
Best Regards,
Brian
Reply to Brian McCarthyI agree with the value of employing business concepts to that of social ROI, but I find it intriguing that you used Porter’s 5 forces as part of your analysis. At first blush it would seem as though threat of substitutes or new entrants would actually be good things for this space, because it would suggest that more people are trying to imitate your model to reach more people.
It seems that minimal barriers to entry are ideal in this space, not the other way around.
Reply to Vinay Ganti