Invest for Impact
April 02, 2020
The Invest for Impact experience includes a wide variety of challenges in a WIN-WIN-WIN convergence of three elite groups: top MBA students, visionary, socially - or sustainably-minded entrepreneurs and successful impact investors, each of whom has much to learn from the others. In this competition, student teams from MBA programs around the world will play the role of impact investors. They will review the business plans of three companies and select the company they would invest in based off of both financial viability and their social or environmental impact.
The 14th annual Invest for Impact competition will take place on April 2-3, 2020 at UNC’s Kenan-Flagler Business School in Chapel Hill, North Carolina. Once invitations are sent out, we encourage teams to register as soon as possible to secure their spot in the competition.
The Global Impact Investing Network (GIIN) defines impact investing as “investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return.” Impact investing has experienced rapid growth over the past decade but further growth is required to provide the capital necessary to address the world’s most pressing challenges.
Invest 4 Impact Competition:
UNC developed the Invest 4 Impact competition to give students exposure to the field of impact investing. As this is a relatively new field, industry practices are changing rapidly as investors find new ways to measure impact, and develop new investment mechanisms that are more appropriate for impact focused companies.
Invest 4 Impact is designed to focus on 3 key issues: assessing impact, financing impact, and measuring impact.
Focus 1: Assessing Impact:
An investor’s intention to have a positive social or environmental impact through investments is a core tenant of impact investing. It is therefore important for any impact investor to develop an investment thesis that clearly establishes the impact they are looking to generate. Investment opportunities should be assessed against these impact goals.
Focus 2: Financing Impact:
Depending on their level of commitment to achieving impact, investors will expect financial returns anywhere between break-even and the market rate. In addition, impact investments can be made across a range of asset classes from grants to debt to traditional venture capital equity. To allow companies to focus on their impact goals it is often necessary for investors to develop creative investment mechanisms tailored to the individual firm to achieve the investor’s expected rate of return.
Focus 3: Measuring Impact:
Impact investment funds are ultimately responsible to individual investors that have contributed their money with the expectation of a financial return and a positive impact. Fund managers therefore must report on fund performance on both of these dimensions. To meet this responsibility, investors need a strong understanding of how they will measure the impact of each investment.
The following sections describe the updated format of the Invest 4 Impact competition and how it has been designed in order to expose students to these 3 key issues outlined above:
Before the competition:
Teams that register will be sent background material to help them start thinking about assessing impact, financing impact, and measuring impact. This information is likely to include; online videos explaining the venture capital method of investing, case studies outlining a range of investment mechanisms, and an online tool for developing impact metrics.
On the Monday before the competition, we will email teams the real business plans of three impact focused entrepreneurs currently seeking funding. Teams will become familiar with the business plans, conduct initial due diligence, make preliminary assessments of impact, and explore potential investment mechanisms. While some work will be necessary prior to the day of the competition, it is not expected that teams will have developed their investment recommendation prior to arriving in Chapel Hill.
On Thursday evening, all participants will gather for an opening reception. The reception will be followed by each entrepreneur giving a pitch. There will be time for teams to submit questions prior so that the entrepreneur can provide clarification details about the business model. Students have the evening to work on their due diligence questions and enjoy Chapel Hill!
Following breakfast on the Kenan-Flagler campus, teams will have the opportunity to interview the entrepreneurs. Teams should come prepared with questions that will allow them to gain a full appreciation of the potential impact of the business and the potential investment opportunity. Judges will be in the room during these sessions, assessing the teams on their understanding of the key risks associated with each opportunity.
After all of the due diligence sessions are complete, teams will have time to complete any final research and develop their deliverable documents. Each team will then present their investment recommendation to the panel of judges. Teams should expect to field questions that test the rationale behind their decision.
Once all of the teams have presented, the winners will be announced. The judges will then circulate between the teams and provide feedback. A reception will follow.
3 Key Groups Participating:
- MBA Students: Invest for Impact is designed first and foremost for the student experience. Each student team plays the role of an impact investing firm that must go through the entire impact investment process in an extremely condensed time period.
- Entrepreneurs: Entrepreneurs are the life-blood of Invest for Impact; they share their visions and dreams with the students. They also challenge students to identify the critical risks and milestones necessary to succeed in their vision. Years of painstaking effort are condensed into a written plan and a 10-minute pitch to be quickly digested by teams.
- Impact Investor Judges: While students and entrepreneurs are participating in this simulated human drama, a panel of impact investors observes from the periphery. After the entrepreneurs depart, the tables are turned, and the students must start pitching. They must convince their 'partners,' the impact investors acting as judges, that their investment decisions are sound, there will be reasonable returns for the risk taken and that their investment has a social or environmental impact. Finally, judges must choose a winner - the team they would most like to have as their impact investing partner.
Teams of 5 MBA students.
Kellogg (2007, 2016)
Oxford (2010, 2014)
UNC (2006, 2011, 2012, 2017, 2019)
NYU Stern (2009)