 Great. So thank you all for joining us and thank thanks to all of you for being here My name is Karthik Desai. I work for an organization called Asha Impact, which is an impact investment fund based in India and We are here today to discuss specifically the topic of impact investing as its practice in India and in the United States two large countries two dynamic economies Both of which are considered hubs of social innovation and entrepreneurship including impact entrepreneurship And we are very fortunate to have a great panel here and some very very experienced folks who have experience doing impact investing in both countries so the idea is to kind of talk about the Relative lessons that have come out of impact investing in both of these markets both to understand whether there's things that one can learn from each Other is it possible to have kind of a more globally aligned definition or thought process or best practices And not just for the US in India, but for the broader market if you could take of them as a representative for Fast-growing emerging market and a large developed country market So that's that's the context and we'd like to make it as interactive as possible So perhaps after getting the perspectives from each of the panelists We'd love to hear some of your views as well And hopefully more people who will join us over the course of the hour so Rather than doing introductions if it's okay We'd like to directly maybe go through each panelist and get get get your thoughts And maybe you could also take the time to briefly introduce yourself in what you do So we'll start with To my right mr. PR Ganpati or guns if I can I can call you that Who's the CEO of the will grow innovation foundations one of the earliest impact investors in India? So guns if you could just share your perspective a little bit about about will grow and specifically over the last I think almost 15 years that you guys have been working in India What is it you know about impact investing in India that makes it unique that makes it special And what are the key lessons and insights about impact investment that you think makes India a unique case in the world Which other countries could learn from yeah, thanks a lot, Karthik So as Karthik mentioned will grow innovations foundation Funded and supported social entrepreneurs in India since 2015 and we now also manage the Menterra social impact fund I think some of the lessons that we've learned over time We're at the big bang with the beginning of that movement in India in 2001 Off-late, of course, you've seen the startup craze of the entrepreneurship craze quite catch the fancy of young people And I think that's built over into the social sector You're seeing a significant increase in terms of the number of young people wanting to apply their skills and entrepreneurial talents to solving social problems However, I still think we have a quality problem. We see a lot of ideas, but we see very few really good ideas I think that's partly driven by Youth in inexperience of some of the entrepreneurs, but also perhaps because in a society like ours were very Stratified and I think the problems of our the poorer people and real society problems are very far removed from the Sort of experiences of people who get a good education go to an IIT and I am and Finally at the root of good entrepreneurship is good understanding of customer pain and problems So we have to figure mechanisms by which we can break some of those barriers down if we have to improve the quality of Our pipeline. I think the second big lesson is that it's not enough to provide these entrepreneurs with money And if you're getting entrepreneurs who don't check all your boxes, they're not the perfect deal There are areas of weakness typically those weaknesses are with the management team They'll be unidimensional they'll all be technologies or they'll be inexperienced And so you have to do a lot to help those entrepreneurs after you make the investment So be prepared to spend time Handholding the company assigning a mentor for the company opening doors helping them find co-founders in the right skills Because otherwise your investments at serious risk. So you've got to be able to walk those extra steps I think lastly before I sign off is the challenge of exits I think it's very important because we all manage money from investors that we have to create a pathway to Generating an exit over the time that these companies take to scale up and the fact that in a Developing country we do for example a lot of work in medical devices You would think that logically these medical devices that have been developed and deployed in the field would be acquired by You know some of the big health care companies and provide an exit opportunity for Investors but the make versus buy decision typically is very much make versus buy As opposed to you know countries like the US where the time to market and speed is so important that often times buy It makes more sense than make and so exits are a real challenge And we have a regulatory environment that perhaps does not permit some of the innovation that we've seen in self-liquidating instruments in the US such as John Kohler's work around the demand dividend So that's something to think about consciously is who's going to give you an exit and how's that going to happen? Those are my three opening remarks great Excellent. Thank you I would love to get Victoria's perspective Victoria as the head of investments the managing director of Village Capital Fund Which is one of the most interesting impact investing organizations out there? Specifically supporting very early-stage entrepreneurs with their unique peer selection Methodology where the entrepreneurs themselves select who gets funded and they've been doing this now for I think quite some time in in various emerging markets I in fact as at one point I was a social entrepreneur before I became an investor and participated in the very first village capital program many years ago in India And I know you run these in Africa and in the United States and Ross was a founder of a little capital recently published his book You guys must have heard about which specifically talks about how a lot of venture capital dollars flow into You know the the people like us the PLU's in living in Boston or wherever in San Francisco And in the Indian case in Bombay Bank of Bangalore, Hedrabad, etc. and not into smaller smaller towns So I was hoping if you could just share a little bit more specifically about the insights of Village Capital since you guys have Specifically been looking at investing in entrepreneurs in small towns in the US small towns in India and other emerging markets What are the similarities and the differences and what are specifically some of some of the aspects of the American impact investing experience? That we could learn in India. Yeah, sure. So I'm glad to be here and I think that gives a good overview of Village Capital for the last Seven or eight years we've been deploying this two-sided model where we run programs for cohorts of entrepreneurs across five sectors So the themes that we focus on our affordable access to health education financial services and then sustainable energy and food and agriculture And so we've gotten a chance to sort of compare across those sectors and across the geographies where we work Some of the the things that we've seen develop across ecosystems and the markets outside of the US where we're active are India East in West Africa and Mexico I think you know over that the time frame that that we've been operating Certainly, it's been exciting to see impact investing in the US Just continue to gain a lot of momentum and attention and fervor And there have been sort of gaps in seeing some of that fervor actually meet the capital deployment And I think that's you know a theme that's spoken about frequently at SoCAP, but The last year or so I think it's been incredibly exciting to see a much more institutional focus and and capital availability that really has volume Shine a light on the potential of this space. So not least of which is things like TPG and rise But Bain and a lot of large foundation shifting to a hundred percent impact that I think Hopefully will mean that we're getting capital across all levels of the spectrum That that need to meet the market where we work in You know guns makes an interesting point about sort of the quality of entrepreneurs and providing them with enough Resources and support so that they can actually get to the next level So, you know, maybe they get an early-stage check But then can they actually meet milestones that will attract a seed or a series a round And we're seeing a great Disparity in what those opportunities look like across the country here So you have you know extremely well at developed ecosystems out here in the Bay Area in New York in Boston And there are many other parts of the country where we're seeing, you know A real dearth of resources and early-stage capital for entrepreneurs. That's one of the things that we're trying to focus on and then I think the other interesting piece that I would say in terms of where impact investing has sort of Been going over the time that we have been operating is thinking about the the blended resources of both philanthropic and commercial capital and the the Availability of things like program related investments from foundations that we've seen Contribute to an early start in some enterprises and so maybe, you know can talk about how that's Applied applied in in the adverse the US Great Coming next to odd Audrey Audrey is runs Arthur initiative, which many of you would have heard of and they also make Early-stage equity investments and have supported many many social enterprises in India some of whom are quite well-known Your enterprises Audrey are kind of spread all across India right and my question is how do you address this challenge that Ross and you know Victoria talking about which is Finding the right entrepreneurs guns also mentioned the best entrepreneur may often be sitting in a smaller town But his capacity his or her capacity May be you know much He or she will need more support So how do you guys go about that and particularly as a foreign investor or as an investor sitting in you know In the outside India Would you talk a little bit more about how Arthur has gone about finding the right entrepreneurs and and what you have seen as impact investing? Evolved over the last decade or so based on your experience sure with pleasure. Thank you so the program that I've been involved with helping to to run over the past ten years has has evolved and the way that we've addressed the issue of trying to work with the right entrepreneurs as we've partnered with Bill grow in Minterra So that was the easiest way to handle it. I mean it became before before that that was recent, right? Yes, it's relatively recent and it's it's it's on the back of a of a rather Long and arduous process of realizing one's shortcomings as an external investor to the country just plainly speaking, I mean We're a classic example of of I would say a well-intentioned Diaspora and high-net-worth individual who wants to engage wants to make a difference but wasn't ready to necessarily deploy a team and country and and given and to have you know somebody who speaks the language and who is Better suited to the job frankly But what what initially happened was first five six years? It was very much helicopter helicoptering in hello and spending Probably the equivalent of three to four months of the year Running around and trying to meet and understand the landscape that took a couple of years starting to do the first impact investments and understanding how to structure these transactions and how to navigate the complex regulatory Circumstances in which one finds themselves and I think There's been incredible learning from the companies and the The experience of managing a portfolio from afar I think that there's an incredible ecosystem in India, which I would say is mirrored by the concentration of Great players here in the US looking at social businesses in American cities I don't know the prevalence of great opportunities in tier two and tier three American cities I'm aware of some of what goes on in the peri-urban areas of major tier one cities But I can say for certain that we didn't have access to Anything beyond the usual suspects In the first couple of years in the first five six years of what we were doing with Arthur we try our part and where I think our strength is is in networking with those like ourselves outside and so aggregating information and Cultivating relationships with those who would be Co-investors and partners and in getting involved in deal in these types of Investment opportunities is something we do relatively well. We do a lot of that informally We do some of it formally with a technical With a platform that attempts to aggregate data So there's a lot about the data piece But all things related to discovery Good diligence and execution and post-investment management have come on the back of our close partnership with Minterra Do you think there's enough social entrepreneurs in India and what I just contextualize that question I've been speaking to a lot of entrepreneurs who are here at SoCAP The ones who are you know here on the scholarship and they're there a few from India and an interesting thought emerged And some of them are in this room and you know feel free to Speak up if you guys want to you know add a comment The view was that in India the entrepreneurs are more business focused and in the US There's so much, you know awareness of social entrepreneurship that every variation of some project the other is happening But some people have a different view that no they're that that's the right approach that in India by default 80% of businesses which are serving the masses will have impact built in Into their DNA or do you think that so which side of it? Would you agree more? You know that do is there a need for more evangelizing the social entrepreneurship and more social entrepreneurs or when you do the artha venture challenge in the past at a Suncup or now with Minterra Do you see a large number of entrepreneurs? Approaching you as you said the quality of the entrepreneurs. I'm talking about quality entrepreneurs Yeah, I mean and I would be interested in hearing my colleagues perspectives on this But I would be loathe to err on the side of thinking that the default setting of an entrepreneur just because they're working in a Challenging environment is social we've seen many situations and in fact the drift of you know the typical mission drift type of situation where you risk Losing sight of the impact objectives entirely by virtue of a shift in The priorities or the shift in the strategy related to the margins you want to achieve or the kind of Customer segment that you're serving this happens all the time. I think it's it's about being more deliberate more intentional and Not taking that at all for granted Coming to Maya Maya, you've worked at Alivar and now now you're working with TPG rise and Could you give us a bit of a global context and specifically with respect to the definition of impact investing in the Indian context? Which is what I'm familiar with we talk about in terms of the beneficiary focus that there's a certain income criteria or a social Sector focus that it must be an education health care Agri and so on And finally an intentionality focus which is sometimes questioned and it could be argued that in the US the intentionality focus is more robust because you have The big orbs and thinking about that whereas the Indian context can be sometimes an afterthought So what do you? Constitutes, how do you define impact investing when you think about it in a global context? And what are the similarities and differences between doing impact investment in a developed country versus a developing country? Thanks, Carti. So The range of experience that I have as Kartik mentioned is at Alivar We were basically making series a investments in companies that were serving low-income Customers underserved communities in India and in Latin America and now at the rise fund Which is the the fund that we've raised the TPG growth Which is a two billion dollar fund? investing all across the grove in in seven sectors and We we do have actually you know when our second deal was a deal in India so interestingly I can talk about that But I think I think I have a slightly Different perspective on even the Indian experience just on based on what we did at Alivar But let me let me come to that and let me address your question. So Within the the developing world context, I think for us It's been pretty clear with the rise fund lens that The notion of serving underserved markets is pretty clear So if you look at business models in the developing world very often you'll find a mass business model Which would encompass lower-income individuals and then there's a slightly different business model for the wealthy So if I just look at TPG's historical experience, are we hearing is that me and I think one of us has If I look at if I look at TBG's investing experience TBG for example invested in a hospital chain in Sri Lanka and so most people would say Sri Lanka emerging market You know largely low income But if you look at this and therefore investing in healthcare in Sri Lanka must be impact But if you look at it the way that we look at it in the rise fund the the customer base for this hospital chain was actually quite wealthy and They would fly to India or they would fly to Singapore or they would fly to London for their medical treatment And you were basically replacing the need to fly somewhere for your medical treatment with medical treatment in come in country And so if you think about impact even though healthcare is a good thing You weren't doing anything except creating more convenience for the for the wealthy in the in this country and for us That was that was not impact and I think that if you look at What we think of as impact in the emerging markets a lot of the times especially in these core Services areas ag its small holder farmers Income benefit there may be environmental or sustainability benefits, too But we're really looking at small holder farmer and income uplift and not at you know big ag In education. It's the same. We're looking at mass education strategies as opposed to education for the elite So that that is very clear if you look at it in the US context the conversation becomes a lot more mixed if you look at healthcare or Education, you know, often there's a broad swath of Education or even financial services that serves the entire spectrum of Society and income levels and not just the low income So you have to have a slightly different view and a slightly different definition and that's probably the most stark Contrast that I can make between India or other emerging markets and what we're doing here in the developed world It's the notion of who the customer is where the benefit is if it's just a low-income person or of its society It's large is slightly different because of the structure of The society because of the structure of services etc etc one other difference, you know that I'd like to call out in the global context is That at least you know with the L of r experience that we had in India And even with the TPG Rise fund experience that we have in India versus the US experience We actually at L of r and today with rise are finding that there are more entrepreneurs Who we are meeting in the developing world context who don't wear impact on their sleep So it's not maybe the traditional early-stage social entrepreneur, but it's the X You know head of a division from I see I see I bank who just basically said I love this customer I love this business. I'm gonna do the right thing by this customer Forget calling it impact forget calling it social enterprise the nature of the business that I'm building is a large Opportunity for this large customer base, which is wildly Untapped and I know how to do better for that customer base So they're not and and they get they get a look actually sometimes a little bit nervous about being labeled as a social enterprise entrepreneur or an impact entrepreneur because there sometimes is a little bit of a veneer that you might be not fully market oriented or fully hardcore business oriented or oriented towards Building a great large performing company in the US. It's actually the opposite So interestingly in the US the companies that we are seeing within the rise fund that we're interested in are Extremely hardcore about mission and the purpose of what they're doing and they are not as mixed So they tend to be maybe a little bit younger as well So they're a little bit more sort of close to the millennial in in the L of R context The most successful entrepreneurs that we've backed were all in their Mid-40s and up our biggest failures were the 25 to 35 year olds who had never run a company before who had great vision About a problem that they wanted to solve but had just never Executed to the scale and the level that you need to be successful in India and so we took sort of the crusty again, you know 50 year old from ICICI or from Unilever and all they wanted to do is build a great business You know at the at the mass level in the US the the entrepreneurs who are coming to to rise You know, they're not 25 years old But they are all about purpose and they are all about mission and they are all about the good that they're doing and they Don't want a normal private equity fund to back them They want an impact fund to back them because it just it Effectively amplifies their brand that I care about the world and I'm building a successful company But I'm not in it just to build a successful company I'm in this because I want to change the world and do something great and that's also an interesting contrast One last statement. I'll make about the global context is that if you look at Africa what's interesting is, you know So I was lucky enough to start investing in Indian companies About 12 years ago Africa today In certain economies looks like India 12 years ago in terms of the infrastructure the level of entrepreneurial Capability etc and and it's very interesting to think about what can be done in Africa learning from the Indian Experience and this could be true of other, you know frontier markets, maybe like Myanmar It's less true of places like Indonesia or the Philippines or you know, or certainly China Which are different, but if you look at some of the African context and other other parts of the of South Asia or going over to Myanmar You know, there are lessons to be learned actually from the Indian experience because they're some years behind Fantastic. Thank you so much for that that that actually puts it very crisply and maybe I can take take take that to you Vikram Vikram as many if you know is someone who is you know, he's the founder of Asha impact He's made many many impact investments in India as well as in the US now You're teaching in the US and this topic of impact investing so as Maya said, you know There's this successful entrepreneurs in the US in India looking very different in India They're more commercially oriented. They don't they in fact as you said almost the impact is the negative things And don't call me impact. She begs the question. Why would you say that is something wrong with impact whereas in the US? They proudly wear that badge and they're younger and you know, there's a clear distinction So and you're working with students and entrepreneurs on both sides. So could you help us think through? Why they're different and is one better than the other or how can one even think about framing this issue or? Most difficult question for You know, I think if I India the US The most number of entrepreneurs Can you hear me? No That you know, if you look at if you look at entrepreneurship in India in the US produce Perhaps the most number of entrepreneurs You know, and I'm very well known for that. So the question is like why is it different really is that is it really different? I mean, I think Miami had the experience of investing in older people who don't want to be called impact but By the fact that they are actually making a math difference. Yeah, and at the same time I could take examples of companies here in the US or inventors social entrepreneurs Who basically Don't want to be called Impact of that social entrepreneurs because they feel that that actually impedes them. So what I think there is that bucket I'm not sure so clear that it's that it's kind of pretty universal If I had to highlight a couple of differences where both could learn from each other I think one is just the sources and tools of capital So if you look at the funds that And I think there's been a lot more to do but in the US You know the family offices have made a big push and have actually started investing this the the rice fun would be a good example and village capital others are commercial capital coming in and in fact A large chunk of that will be development capital And so I think the big thing that in India we need to make it You know make a big push on is really bringing in private family offices and other forms of private capital to actually Invest in India. I mean it's kind of ironic though when you when you start talking about You know you start making pitches to people about raising funds and this and that you come all in place Well, how many Indians actually invest in impact investing and the sector is a part of when we set up our shy impact was Basically to go after family offices. So essentially it's basically eight family offices Looking at investing and except for one all of them are Indian family offices And so I think that's a big big difference in terms of what we need to push on from the India perspective I would I would also say that from India's aspiration and I think that's another thing we could learn from the US is that US funds are all global Everything you talk about here is global But most Indian funds and you could say well the opportunity in India so huge etc Most Indian funds are Indian and I think there is an opportunity I think few of them was trying to look at it to your highest point is taking what you learned in India and extending it To Sri Lanka extending it to other parts around the South Asian continent going to Africa So I think that's the the second piece that I would think about And the third piece to the whole point of view that you know in India impact investing is all about bottom of the pyramid I think we need to get away from that mindset. I think that's important to but there's so many great entrepreneurs in India We're using technology. We're using financial engineering where could help the poor, but actually could be hugely beneficial for society Alarge, so I think those are the three areas which you know, I think there's a lot of learning that that that could happen across Absolutely, I think I think that last point that you made, you know as I'm someone who's grown up equally I've already spent exactly I think equal amount of time in the US and in India and I find it fascinating that I've actually spent a lot of time thinking and reflecting about this that and that's one of things I really loved about coming to Socap is just understanding the Because you're still talking about disenfranchised groups. It's just that we're defining it here in the US You guys are defining it here in the US not just on an income criteria It's you know, it could be on race. It could be on Some other form of deprivation Whereas in India We're sort of cutting across that because of our local factors because race and religion and caste are very sensitive issues And we don't want that to be the primary issue. We see the main the main issue should be poverty But if I can just ask I know there's several of you guys are in the room Who I've spoken to in the last few days. How many of you folks would like identify yourself as impact entrepreneurs We're probably where impact on your sleeve and how many folks would prefer to just you know Say look, I'm a business person and impact is part of what I do, but I'm just a business person Well, and I think the point that my was making in our experience has been a little bit more similar to Vikram's that we've seen a mix of both on the age range and on the sort of embracing the Impact-oriented term even if people are not self labeling as social enterprise But it's a it's a recruitment tool like they want to be in the US You want to be building a mission-driven company because you think it will get you better talent And I'm curious to hear perspectives on whether you think that is the same yet in India Because we the Indian entrepreneurs we've worked with have have ranged in age from you know Your sort of prototypical mid 20s or early 30s founder to somebody who's built a couple businesses already and is you know doing a next chapter So maybe I can take that question just frame it for everyone And there's exactly the right question, which is that is it a cultural difference of thinking about impact non-impact And how we are sort of geared as the society's or is it structural and relating to regulation and policy that and or the level of market Development which are fundamentally structural factors, right? What are the drivers of? the difference between the various differences that have been highlighted any of you guys would comment on that So my experience has been that it's Really boils down to what's the source of the fire inside the entrepreneur Those who don't want to be labeled as impact those who have aspirations of raising money from a Sequoia They feel that the brand of impact will somehow constrain their ability to raise funding from those investors and Regrettably we've had a number of such entrepreneurs who Describe themselves as impact because we were one of the few organizations that were willing to fund them at the super early stage Before they had a prototype But the moment they had a prototype in some traction to show they went to a Sequoia and raise money from those people and then after that, you know, they pivoted their model claiming there were difficulties in serving the customer segment We had funded them to serve Now when I go back to my donors, I feel like I've done them a serious disservice Because their money has now gone to create a product that is not serving the people they wanted to serve So what we've begun to do is we took a page out of the Gates Foundation's global access clause and their funding agreements And we had a clause saying that here are your social impact targets If you don't achieve these targets, you have to return your money to us with a 25% IRR It is a poisonous spill. There's no doubt about it But unfortunately I've burnt my fingers so many times that I have no option but to have such an agree a clause in my funding agreement Can I ask a question related to that? Is it about capital availability if you had like not an unlimited pool of money, but like hundreds of millions of dollars like Sequoia Then those entrepreneurs who who are wanting to go to Sequoia Because of the scale they say we can reach a certain level of success here, but if you really want to be big We ultimately have to get to commercial capital Or is it again about a tensionality that those entrepreneurs never Feel like that entrepreneur that went and raised commercial capital was very focused on the fact that that valuation meant that his Personal paper wealth was X and it went to Y Not that he was serving five million farmers and this funding would help himself 15 And so that was my but again, I'm just extrapolating from three or four data points Felt burnt that when this happened and the question really is that you set someone on the path They're doing something for the farmers If some other commercial capital coming in where they can actually take whatever they're doing from the farmers and scale it up You should be happy that you actually achieve your mission I would be but the problem is that they didn't do that. They said the farmers are too difficult to serve Let's take this technology and let's do it with you know a stock broker. They completely change the customer Completely change the customer I Know this has happened The impact tagging yeah, and the self identification Of course, you know to a certain extent you want to applaud the opportunistic behavior, right on some level you're an entrepreneur you have to be You have to be ready to do the dance and to to know your audience But on several occasions We've seen the misuse of the tagging because you know that you're talking to an impact investor Who on some level is gonna you think be more of a pushover than the average investor and by pushover I mean the specifics of the structure the terms the time horizons the conversion rates the The willingness to go down on a you know the the preference, you know the the coupon on the preference share Small things but at this this has played out on a number of different occasions And I don't think it works. It works the detriment of the of the sector as a whole but if I if I can add to this conversation, so a few observations one is This execution is hard Right, so there are a lot of entrepreneurs who are gonna go in well-intentioned and they're not gonna be able to get the Business model right and make it work and I think you know the question is Pivot in the business model because they can't execute to the to the vision that they had so they pivot or you let them go and they Just fail period and and and there's an end and you know in the in the L of R experience We actually saw the failure route as opposed to the pivot route and the question is what is the better? Outcome and it's really hard and I think that's why I made the statement at the beginning where In the L of R model we became very careful about choosing Execution capability based on years of experience and execution on the ground rather than the younger social entrepreneur because These things are really hard to do it's really had hard to crack a business model at scale for you know some of the things that that we've we've tried to do in India and The question is pivot or just die right and maybe maybe that's you know, that's one of the It's it's annoying. It's frustrating to see them pivot But the other option is they just die or a third thing that we found in some of our Indian companies is you know For instance a healthcare technology company that said we're gonna go into you know Rural frontline training and they keep that as part of their mission But say these sales cycles are so long and it the work is so hard that it's Turning out to be a lot faster for us to sell into some number of private hospitals And then the question is you know How much impact is enough and our stance has been like don't let the perfect be the enemy of the good if they are Serving a blended market and we're still getting some amount of Access to the you know population that we cared about and they're able to actually continue running the business by selling to this Other market like that's the way the business will survive and it's not a total pivot, but it's also not Okay, we can't fully make the business viable off of the one demographic We thought we were gonna serve so we got to throw our hands up and quit But we've come into conflict with co-investors around that who did have really strong teeth in their Investment agreement that said no it's got to be you know X percent and it's more than 50 percent of your customer base Has to be in this income bracket or it doesn't count anymore And I think there's a real tension for investors to work out there No, this is great. I just wanted to open it up to the audience as well before we Was in comments Can you get the mic to him Thanks, Karthik for taking our corridor conversation so seriously and putting it up on stage. I appreciate that question Actually a comment beforehand that you know Indian VCs at early stage seed and series. They are looking primarily at tech and mobile And if your business is any brick-and-mortar angle it immediately gets classified in a different category the business At that level at seed level either you have family officers as Vikram said are not interested in investing in anything That's less than 30% IRR or family and friends who would put in money But then call you immediately and say where's this business going, you know So there is very limited capital available for a lot of people at seed and series in India where it's not a pure tech play I have two questions out of that a how do we build that ecosystem as investors and to We've got DBL partners getting into SpaceX. You know, we've got America sees a very different kind of early-stage investing impact plus You know in the large commercial sense Do you see more Indian VCs getting into that kind of business where a takeout of our art that could be from a sequoia So my questions around those two things So basically forget about impact investing for a second the VC industry in India itself is a foreign capital dominated industry Association than India talk about is where's the domestic capital because again, it's all foreign capital You know, the VC industry itself has got issues, but I think in terms of getting capital in for impact investing particularly You know, it's not Invest in certain kind of stocks and all that it's got to be the family officers and I I think that what's changed a lot in India I'm seeing that but it's big time is that there's been a lot more wealth creation in India the last 10 years Okay, so there's a lot of first-generation wealth and create as we speak a lot of those people are in a younger age bracket So there's that whole millennial kind of mindset, which probably didn't doesn't exist in the previous generation So when I when I go and talk to people like that the issue which in it came out a little bit over here Is that you don't want to call it impact investing? You don't want to call it. Whatever. That's fine But just think of it. It's half the Indian population is a massive market And if there's an entrepreneur out there and it is going to be very difficult to execute, etc But if there's an entrepreneur out there who's willing to do that has a great idea to do it And they will focus on generating market returns and the other question is like what the hell is market returns mean? But that's a separate issue Is that you know, you just have to kind of focus around a product or a service that there's a huge Whole there and products and services and if a company can come up and deliver a product and service at a price point that makes sense for the customer the farmer whoever else and Deliver it in a profitable manner and that's a good investment And so I think that's one the second thing which I'm seeing in the family of particularly is that is what God said before Which is it's not just about the money people actually want to get involved with helping people to grow and scale and a lot of Very well-intentioned they have great hearts, but they actually don't know how to build a good business Hello, yeah, hi. This is just for the panel. I'm actually coming from our organization. We are in your literacy project We fund pro literacy projects in India. I guess my question to you is a little different because this is so packed I mean this is new to me What I see is we are doing the traditional model right philanthropic model where we are you know going and working in the villages You know obviously leveraging the government to you know raise literacy levels What I would like to ask you is just a comment or Just throw some light on Do you see any impact investing that can happen in education? especially in the rural area Kind of leveraging what the government infrastructure is the only I guess the the only Area I see in from our work is Maybe learning materials that we give to schools is one area that can improve the quality of education because enrollment You know obviously is very high but beyond that just in terms of you know efficiency of the schools running You know just learning levels. I'm just curious to see have you seen anything so far that can improve that levels I'm talking about you know rural areas number one and then Yeah, I just in or if you don't see anything today Do you see anything that's possible in the near future wonderful panel in fact, so I'm one of the entrepreneurs from India I run a company called Alton. So for the first time I'm in US have been a scholarship recipient as well I've been able to meet some amazing entrepreneurs as part of so cap from different countries. What I realize is that Back in India what we are made to do is what is the circumstances are that we have to run an entity in a Sustainable model so that we need to do a business first and then impact is a byproduct of what we are doing and at the end of The day we say that we are social entrepreneur But over here when I've met a lot of other people Which are from Holland of other countries or Africa as well. I realize that they have a lot of support from government in terms of that first grant or philanthropic fund or just to prove that they're MVP first and Then the business comes as a byproduct But they're more major focus as order and as gone for these are actually been Mentioned is that on the impact first and and that's where we also would want to understand that Why why would not we have in India? Have a lot of support from the government or from other other countries because at the end of the day What we need to do is incorporate an entity parallel in US to leverage the other grants or the other scheme which are there in US That's what So I've been grappling with this rise of the rest question about India that you mentioned and I think it's I think it's pretty Interesting and I want to hear what the panel thinks about this our experience in omnivore is that the rise of the when I say when we say rise of the rest what I mean specifically is talent in India migrates to the top six cities and Launching businesses outside of those places is really fricking hard And if we look at our portfolio of 12 companies are two worst performing companies are the ones that have really struggled to recruit talent because they're in third and fourth tier cities and So one of the things that we've said about our second fund is that we're really going to concentrate at least Headquartering businesses in Mumbai Pune the NCR Bangalore Hyderabad Chennai and And we'd better have a damn good case if we're gonna go outside of those places You can put your factories right in other places You can you can have field force all over the country But headquarters if you need good finance HR right and coders you're pretty screwed outside of those cities That's our hypothesis I'm wondering if you've had different experiences or how you think about this because we don't want the world to be like this But you know with with one business in Guwahati, right another business in Rajkot. They've really struggled Hi, my name is Tara. I'm the co-founder of the hybrid organization called strength India And I understand that problem you're talking about because I've been based in Varanasi for almost the past four years Developing after-school programs for girls from violent backgrounds and we've been launching a menstrual hygiene initiative recently So Yeah, I'm interested to hear more about that because I my immediate instinct would be that it takes people on the ground to really change the issues But I also run into issues with Talent sourcing which is incredibly difficult. I also have a more technical question that has to do with a section 8 company And what you as investors feel is the flexibility of the section 8 company model since it's a not-for-profit company But it also issues equity shares, which is a different instrument than I am used to being from the u.s And especially as our team sort of straddles the line between Philanthropy and social enterprise What would be the ways that you as impact investors would recommend using that company tool Within or outside of a pure for-profit model There was one question Yeah, and I think there are several that we could talk about but you could also talk talk about that offline That's okay There was a question around government support and how it seems like in the United States the government is much more Supportive and in India, it's not I think I certainly us and thoughts in that. I think maybe the crumb can can speak on that And then this rise of the rest. I mean, I think Ross has written a book on this topic So maybe that's an interesting question And then this question that you just raised so I'll actually maybe Audrey if you want to jump in I just want to say one word about the first question about last rural areas and last mile businesses and Because we deploy very small amounts of money relatively speaking so it's somewhere between 30 and 60 lakh in the first round We tend to be better positioned as an investor in service companies as opposed to you know heavy big-ticket product innovation companies and I'll just make a structural observation There are some there are a couple of companies that we've seen well in our portfolio and that we've seen in in peer portfolios that are providing Last mile service looking at the end user finance piece looking at the after-sales service piece looking at all those difficult things What's astounding to me is that so many of us as an investor as part of an investor community are Investing in trying to crack the same problem and when the company does There's still I haven't seen very many case studies where we see other companies being able to collaborate or leverage The success when it does happen So it's it's unusual and I just more of a structural observation about the nature of the interactions With between and entrepreneurs, which maybe Victoria could comment on Yeah, maybe I'll I'll make a quick comment on on Mark's question, which is Just in my observation Unfortunately, it's true and this is actually looking at other countries. So in the Philippines for example It's very difficult to invest in companies that are located with headquarters outside of Manila in terms of Aggregating management talent and I think it's a problem that we need to all work on collectively because you know India is not made up of six cities but the reality is that That's where talent goes and it takes an entire ecosystem So it's not just an India problem. You look at a number of African countries You look at a number of other Southeast Asian countries and even though the markets are Maybe far flung or it's a it's even a nationwide Initiative talent still Lives in a certain place and if you're gonna get to execution at scale You can't compromise on talent and it's just it's our living reality and it's it's frustrating on on rural models I think you know there there are there are some interesting models in healthcare in education in What I'll call media and information technology where again It's it's this characteristic that you have these teams that are headquartered Let's say in Delhi, but you know the the the market that they're reaching is you know all the way across You know through Bihar and you know some of the more difficult regions and I don't think that That that rural markets need to be left out I think there are lots of opportunities that we've seen across all categories again Generally the management teams tend to be located in the in the six major cities when you're dealing with the north They're normally in Delhi if you're dealing you know with middle It's Mumbai Pune if you know Bangalore for the south but but but but they're there And they're very very compelling business models at scale That we've seen you know usually leveraging some kind of technology or they could be an information connectivity and media play Serving sort of dark markets, but there's some very clever entrepreneurs that we take a lot of confidence in Um just briefly on the education point, so we've worked Last year with the Michael and Susan Dell Foundation Focused on entrepreneurs that were sort of bridging the education to employment So skills training and works workforce development and have some models we could talk about there And then currently with a mid-ear network. That's a more K to 12 focused batch of entrepreneurs and thinking about how to leverage technology and teacher training and tutoring centers and skills-based acquisition That we're seeing be applicable broadly for last mile purposes to mark's question. I I Agree that it is hard and I keep you know We've invested in a dozen businesses in India and all of them have been in those same cities So, you know, we're not walking the talk yet about rise of the rest in India But I would just offer that I think this people would have made the same comment about the US Pick a number of years, you know However, many years ago two five ten years ago and even Peter teal I think last year said when speaking in Chicago like anybody who knows anything only goes to New York or San Francisco, which is horribly offensive to all of the people who live in Anywhere besides those two cities So I would just I would just hesitate to say yes The work is super hard which Maya just said but there's got to be talent there And there's got to be a way that an ecosystem with the right amount of investment can Can make either importing the talent or keeping the talent there viable because I think otherwise the risk as you see What we are seeing some have happened now in the US Any thoughts on the government question and the role of coffee? So one is just on the section 8 thing. I think What I've seen In the microfinance area some of them have been started in a way that the original shareholders and promoters do it in a section 8 company There are others that did not and I think what that does do at least is send a strong message of mission Drift or avoidance there are Because you cannot take the profits out. You're just what plow them back into the business So I think the benefit of as long as that's your intent Is is that is that it kind of keeps you true to the mission and keeps you away from mission So from that perspective, I think that's positive You know on in terms of the government It's a it's a tricky one. I mean ultimately, you know mean I don't know what's gonna happen the government's stature in the US, but that's a separate issue But you know ultimately the governments are the biggest impact investors, however you put it and so the question really is How can you? Really work with the government's influence policy so that whatever money they're spending on their budgets can support activities such as yours So at Russia in fact the the model that we have is we make investments and it's you know low-income housing and some financial inclusion focused on small businesses in a couple of other areas But a key part of the trust that we set up is actually to focus on government advocacy in those areas So by making those investments and by working with the entrepreneurs We learn a lot of what's going on what's working on the ground and then work with the government in terms of saying look These are the policies that are working that expand them. These are really not working It's it's amazing that the amount of money which government actually allocates to things never reaches the people And this is not because of corruption anything first of all people don't know what's due to them and then otherwise There's just a complete disconnect. So I think it's things like that I there is a push upon in terms of you know startup India and let's do this and let's do that So I think there's talk about it But I think implementing those strategies would be key and the more you can go and talk to the right people within governments with having real experience on the ground Also, you know talking about the CSR law and how can the CSR issues be plugged in more to Unfortunately in India basically everything is designed to kind of deal with the lowest common denominator, which is you know As opposed to okay if 20% of the people are gonna misuse the system. That's okay for 80% of the people who are not but that's Experience that's not what happens Guns anything to add? No, I think there's massive government support and it's just goes through the vehicle of incubators and academic institutions Budget for those incubators went up six-fold this last year the government created a 2000 crore fund of funds that's been giving money to funds like the omnivore fund the Manterra fund And in turn these funds are investing these money. The government's not visible. There's no government scheme You can apply for but there are all these organizations that are receiving government support to support entrepreneurs like you Just a question of getting into one of those programs and then getting that support We've seen fantastic increase in government funding and support for entrepreneurship medical devices by rack gives money on Just a napkin. It's a 15-minute presentation and you get 50 lakhs to do an early-stage product development So there's tremendous amount of support in specific sectors through the incubators through the fund of funds It's just a question of getting to the right organizations that are tasked with deploying that And keep in mind, you know that the work of the government is pretty much the same as work of the impact investors in the line Alignment between their priorities are huge. Just look at the even the names of the different schemes You know, you have swatch para which matches the sanitation You've got John Daniels, you know, which matters to financial inclusion for the on month. Yeah, what's original housing for all? Energy access for all these are literally the five or six sectors in which impact investors operate And what we have seen in the last couple of years Is an increasing openness towards, you know towards impact investment in the government and and I think That should that should hopefully continue. So I think we're just literally ran out of time. So Before closing, I would just request each of you maybe to just give one or two statements Just maybe summarizing if we could kind of the key takeaway Or if there's one single most important lesson that you think either India or the US has, you know And what would what would that be? Something for the entrepreneurs to you know to take home Well, Audrey made an interesting point that we didn't have time to speak about here But I think Figuring out what models given our global lens doing more work on our portfolio to see what's working in different regions Either from the US that we can bring to India or from India that we can bring to the US or other emerging markets Is a place that I still see a lot of opportunity And there are some groups that have started doing this a group called Konovo that's doing it in Mexico and has imported some models That they think can be franchisable But I think that's that's where all of these you know the conferences and convenings and the risk tolerant capital Let's put Ben put out We'll really come to fruition if we can take some of these lessons and not keep making the same mistakes in different markets Or having a bunch of entrepreneurs do really hard work when we know little nuggets of things that can unlock potential In the places that we work. I think this from an investor perspective. I think the You know the the issue of I think this happens in the US and in India is that as soon as you talk about impact investing immediately triggers the thing of concessionary capital and So in my in my view if there's a way to kind of there's a huge role for concessionary capital There's a huge role for government as guns rightly pointed out But if we are gonna view this as in India or even here or that it's a business with this technology or the customer base As to how can we in both markets really get away from this notion that you know capital generating a market-based return Can also have huge impact I would just add from having Just been focused on the Indian market since 2006 and now with a couple of two dozen or so companies in our portfolio It's been incredibly impressive how much Creativity and passion and social innovation we have seen in in the market I just would say for those who are keen to enter or dip a toe in or to participate the they're really The ecosystem is penetrable and it requires showing up There are relationships in place and and I think they're relatively easily Leveraged so people are willing to connect you to others and and and and work together So I think that's a really positive side of the the experience. I would also just add one point Which is interesting about this The government angle that was brought up earlier This is the first so cap that we have very high level Think what you will of the United Nations, but it's the first time that there's very high level UN people showing up for this conversation It's interesting in terms of the implications that this has for their influence on how their member governments are behaving when it comes to Allocations of capital and public finance so I would just say you know I think that's something we all have to watch and ask lots of questions about and just a brief point of that Actually, you know the UN SDGs are potentially a great way of creating alignment for talking about all different countries Having their own views on things, but the SDGs are really great So I think there's a fairly steep pyramid there's high quality at the top, but there's so much money chasing those deals I think the opportunity lies at one level below where there are some weaknesses And if you are willing to work hard to help the entrepreneur address those weaknesses There's an opportunity to create real businesses. There's opportunity to create real impact opportunity to create real returns So be prepared to do that and there is I think maybe one comment I'll make that we didn't talk about very distinctly I've always seen India in the scope of the global work that we do and especially with respect to other emerging market Economies as the great sort of hotbed of innovation and entrepreneurial energy and the innovations, you know that the the creativity that comes out of the Indian Impact ecosystem the social enterprise ecosystem is phenomenal and because you have correct characteristics of a very large market You know density in a lot of places There's so much exciting stuff that goes on that again a lot of the rest of the frontier world can learn from circumstances may be more difficult in this frontier world, but India for me has always had the Ability to lead the way and I think that'll continue to be true in the future with a lot of innovation For producing, you know social and environmental and economic good So I would just say you know remain inspired because because it's it's just it's such a phenomenal Opportunity to do some really really really cool stuff in the world and and it's very exciting to do work and See folks in India, and it's just it's an inspiration to all of us, you know sitting up here on this side of the table Great well, thank you all very much, and thank you all for coming. I think those are excellent words to end by