YSB Uganda conducted an investment readiness workshop on Aug 7th – 9th at the YSB Uganda office in Kampala.
The invitation-only workshop was designed for businesses that YSB believes could be ready for investment in the near-term – with the right in-depth feedback on the overall business fundamentals.
The program was unique in the sense that it was an open-feedback session provided directly by an impact investor to the social businesses. Other accelerator programs in Uganda are often run by advisors who are not investors themselves, thus the level of feedback for what investors are looking for is not as tangible. As an impact investor, we use our own proprietary tools to assess the businesses and give them feedback on how to become investor ready. This helped the businesses not just for a future investment from YSB, but also potential investment from other investors. Improving the eco-system of social business is important to us and by improving the fundamentals of the business, the risk for investors decreases, and the attractiveness of the investment increases. The workshop was attended by two businesses: Bufumbo, a coffee cooperative and Outspan, a sesame seed exporter.
The workshop is structured around 3 pillars of the business – Strategy, Finance and HR.
On Day 1 we started with the overview of the capital raising process, including the types of capital and what investors are looking for, followed by looking at the key strategic challenges of the businesses, and where they should focus. The participants understood the difference between different types of capital, and the key criteria that an equity, debt or grant investor is looking for. We also talked about definitions of social business and how to measure impact.
On Day 2 we dived into unit economic! We covered: financial due diligence, the amount of debt that business can take, as well as the timing of the debt, and understanding the operational efficiency of the business by looking into key cost drivers and revenue drivers of the business. The sessions were quite interactive and the trainers worked with the social businesses to help identify certain revenue and cost drivers for each business that they could work on to improve the profitability of the business. The third part was around building teams and the importance of the teams, having a diversified team, and what investors like to see in teams and why. There was also a session on corporate governance, in which the participants understood the basics of governance, and the need for a proper board structure to be in place. The message that not having a proper board structure could hamper the capital raising efforts, as investors will shy away from such an investment.
We were lucky enough to have an expert guest speaker, Libby, who is currently the HR Manager of Spouts of Water. Prior to this, Libby spent 30 years working in a variety of roles encompassing human resources, organisational development and community development in government agencies in Australia, as well as the last four and a half years working to build organisational capacity in Cambodia and Uganda. Her focus has been in the areas of human resource development and organisational development, encompassing work such as restructuring of governing boards, assisting a social enterprise to get to profit status, providing management training, developing performance management systems and reviewing salary scales. Libby gave an insightful workshop to the social businesses, sharing her years of experience.
On Day 3, we worked with the investment committee (IC) decks that YSB uses and the social businesses prepared their own IC decks. At the end of the 3rd day, the social businesses were given customized feedback on which areas they need to improve their business and how to do so. Each business was provided with a customised assessment report, which looked at the different areas of the business – (team, operations, business model, governance & financial management) and had concrete recommendations for the business to act upon, in order to improve the fundamentals of the business and decrease risk for the investors.
The programme had fantastic feedback from the attendees, “Great intense program that refocused my attention to areas that are critical to growth but probably at the bottom of my attention list. A lot has to be improved in all areas finance to HR.”
We will be launching another in December, so if you would like to apply check out the website here. As this an intensive hands-on workshop, the program is designed for only 2 to 4 businesses in one workshop, with attendance of 2 to 3 participants per company.