Empowering People to Change the World Launching and ......• DRK is an early-stage, high-touch...
Transcript of Empowering People to Change the World Launching and ......• DRK is an early-stage, high-touch...
Empowering People to Change the WorldFunding and Mentoring Entrepreneurs
DRAFT October 7, 2009
Launching and Financing Your Social Enterprise
February 2013
Agenda
• Background on Draper Richards Kaplan
• The Funding Landscape
• The Funding Process
• Things to Consider
• Q&A
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Background on Draper Richards Kaplan
• DRK is a Venture Philanthropy firm founded in 2002 by Jenny Shilling-Stein along with Venture Capital veterans Bill Draper and Robin Richards.
• DRK is an early-stage, high-touch funder of social innovation:“We invest in social entrepreneurs who change the world.”
• DRK operates like a venture capital firm:– Raises funds from limited partners (and spends down over 5-7 yrs)– Provides capital to early stage organizations ($100K/yr x 3years)– Provides strategic and operational support beyond the capital
• DRK has funded 49 organizations to date:– Issue-area agnostic– Geographically agnostic– Focused on early stage– Highly-selective (<2% acceptance)
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Background on Draper Richards Kaplan: Business Models in DRK Portfolio
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Tightest management /least speed Loosest management /greatest speed
Full management Franchise PartnershipCurriculum distribution
Network
• Organization fully manages operations at all sites
• Organization licenses management of operations as part of a single network
• Organization licenses other organizations to employ model as part of their own network
• Organization authorizes use of its model through distribution of curriculum to other organizations
• Organization grows through spread of ideas through loose network of individuals/ organizations
• Room to Read
• Design that Matters
• Education Pioneers
• Kiva
• The Mission Continues
• VisionSpring
• One Acre Fund
• Grassroot Soccer
• Living Goods
• Little Kids Rock
• Spark
• Genocide Intervention Network
Agenda
• Background on Draper Richards Kaplan
• The Funding Landscape
• The Funding Process
• Things to Consider
• Q&A
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The Funding Landscape: Sources, Dynamics and Considerations
• Funding Sources– Individuals– Foundations– Corporations– Government Entities– Other Non-Profit Organizations– Earned Revenue– Note: Highly successful non-profits have a concentrated funding mix
• Funder Dynamics– Focus on issue area– Focus on target demographic– Focus on geography– Focus on stage of growth– Focus on earned revenue/sustainability
• Funder type considerations– Restricted vs. Unrestricted– Reporting requirements– High-touch / Low-touch / No-touch– Potential funding source(s) will influence legal structure
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Note: Bubble size indicates relative average total grant size to social ventureSource: Foundation Center Directory; Organization websites
Engagementlevel
Funding stage
“Draper Richards Kaplan provides high level of support to very early stage social ventures”
The Funding Landscape: Sampling Of Venture Philanthropy Firms
Agenda
• Background on Draper Richards Kaplan
• The Funding Landscape
• The Funding Process
• Things to Consider
• Q&A
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The Funding Process: Practically Speaking…
• DRK timeline is 4-6 months
• DRK required documents:– Grant application– Resume– Theory of Change– Development Pipeline– Operating/Business Plan
• DRK steps along the way…– Reviewing the application– Interviewing: the social entrepreneur, management team, the
board, extended network, “Outside the tent” sector experts– Developing metrics and milestones for the grant
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The Funding Process: What DRK Looks For
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• Does the entrepreneur exhibit characteristics of exceptional leadership?
• Can the entrepreneur handle challenges?
• Manage people?
• Communicate effectively?
• Strategically assess opportunities?
• Recruit board members?
• Is the model scalable?
• Is the model replicable?
• Is there service demand and dollars available for this model in additional areas such as other fields, geographies, methods of service delivery (e.g. advocacy, media, etc)?
• Is there an ongoing revenue source to support this work?
• Is the entrepreneur’s idea important?
• Does the idea meet a pressing need?
• Does it fill a gap that is not already met?
• Is it uniquely suited to fill that gap?
• Will the impact reach beyond the direct program beneficiaries (e.g. family members, communities, future generations)?
Entrepreneurial leadership
1Scalablemodel
2 Sustainableimpact
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• Improved staff and board strength
• Catalytic budget growth
• Sustainable revenue
• Increased social impact
Facet of strong organization
Key questions
Measure of success
The Funding Process: Leadership
• Identify/articulate a definite need
• Visionary managers who can build an organization
• Focused on clear impact
• Pursue long-range growth/evolution possibilities
• Proven entrepreneurial qualities (i.e. magnet for resources)
• Have relevant issue expertise
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We evaluate leadership by assessing an individuals capability to solve a pressing social need.
The Funding Process: Scale
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• Ideas that can be implemented with reasonable money, feasible plans and team,
• Models that produce tangible results – Where’s the leverage (e.g. technology, volunteers)? What is it enhancing/replacing?
• Scaling strategy
– Impact: Where are you going next?
– Organization How are you building your organization?
– Revenue Model: How will you increase revenues to match organization expenses?
If a leader can build a strong organization from the beginning, the organization has a much better chance at scaled and sustainable impact.
The Funding Process: Impact
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• Does it directly address the need of the target population the organization seeks to serve?
• Will the program create systemic change?
• What are your specific impact results intended for the three year term of the grant and generally beyond?
• How are you measuring, monitoring, and evaluating your impact?
• How do your impact metrics link back to your theory of change?
We look for leveraged solutions that create lasting positive change. We look for game-changing ideas that create better opportunities and outcomes for the future.
Agenda
• Background on Draper Richards Kaplan
• The Funding Landscape
• The Funding Process
• Things to Consider
• Q&A
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Things to Consider
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• Identify real problems
• Talk to the people with those problems (as well as veterans in your field)
• Analyze the competitive landscape (i.e. don’t assume that your solution will work or is unique.
• Consider joining an existing org or being an intrapreneur – many paths to having an impact
• Develop a theory of change to layout inputs, short term and long term outcomes, and ultimate impact BEFORE you pilot... will make selling your program’s vision much easier!
• Develop a business model… not just a program model– Identify who would be willing to pay– Test your assumptions
• Do not feel constrained by current systems
Things to Consider
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• Know your funder before you walk in the door – do the research
• Balance refining the program model with developing organizational capacity
• Spend time building, informing, and leveraging your board (i.e. TTT / WWW)
• Maintain a learning orientation (don’t think that you have all the answers)
• Keep your own counsel
• Go do it – get away from the white board and do it– Don’t over analyze– Fail Faster: You’ll learn more/faster by doing, than thinking
Q&A
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Thank you! Tom Fry, Draper Richards Kaplan Foundation