CINQ 396: Blog 9

Business Model- Acumen Fund

  1. Partner network
    1. Bain & Company
    2. Bill & Melinda Gates Foundation, IKEA Foundation, Metlife Foundation, Unilever (have given $5,000,000+ each)
    3. World bank
    4. Dow Chemical Venture Fund
    5. International Finance Company
    6. LifeSpring Hospital
  2. Key activities
    1. Invest in breakthrough companies
    2. Develop leaders disrupting poverty
    3. Create Platforms (+Acumen) that drive change
  3. Key resources
    1. Human capital
    2. Business strategies/planning expertise
    3. A network of people on the ground as mentors and advisors
    4. Financial capital
    5. Physical capital
    6. Infrastructure to move money and resources
  4. Offer
    1. Money/Investment
    2. Resources: strategies, a network of mentor and advisors, Training programs
    3. To improve the economy at the bottom end of the pyramid
    4. To create jobs through investment
    5. To offer what banks won’t, to small businesses
  5. Customer relationships
    1. Fund to Owner
    2. Fund to employees
    3. Advisors to employees/Owner
    4. Fund to NGOs
    5. Fund to World Bank
    6. Fund to Gov.
    7. Training Partners to students
  6. Distribution channels
    1. Support companies through access to expertise in their specific field
    2. Active, post-investment support in areas of governance, customer insights, and strategies
    3. Raise awareness of their goal through a focus on the social gain over monetary gain
    4. Invest donations instead of giving them away, turning philanthropy into investment capital
  7. Customer segments
    1. Creating value for companies through investments and area expertise for social enterprises
    2. Most important customers are early-stage companies providing a product or service to the poor across the areas of agriculture, education, energy, and healthcare  
  8. Cost structure
    1. Patient capital is a debt or equity investment in a social enterprise
    2. Typical commitments for an enterprise range from $300,000 to $2,500,000
    3. This capital is in equity or debt with payback or exit in about 7-10 years
    4. Value-driven and focused on value creation, premium value proposition
    5. Pay in-house staff with expertise in the fields of Acumen’s current projects
    6. Pre-negotiated fees for this support are paid in full by investees using part of their investment capital from Acumen.
  9. Revenue streams
    1. Funds its capacity-building projects through a pool of grant capital
    2. Acumen sets aside 10% of its total raised capital for capacity-building support to fund in-house staff
    3. Portfolio companies access Acumen’s in-house resources free of charge, these services attract investment pipeline
    4. Have built relationships with high-quality consultants with pre-negotiated fees for this support are paid in full by investees using part of their investment capital.

SOURCES:

https://acumen.org/about/

https://www.guidestar.org/profile/13-4166228

https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=12735717

https://thegiin.org/acumen-fund

https://www.bain.com/about/global-affiliations/acumen-partnership/

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