One of the ways through which Villgro is creating social impact is through investing in entrepreneurs who are building innovative products in healthcare. You’ve already heard from Laura who is working with one of our health focused companies – BioSense.
This week, I’m going to be talking about what happens before Villgro actually invests in an enterprise – a behind the scenes peek if you will, into the world of start up fund raising.
I was suddenly thrust this opportunity when the founder of Villgro called me into his office one fine morning and asked me to engage in due diligence on an enterprise that had been recently identified as a possible candidate for investment. Much like Laura in last week’s post, I jumped first and asked questions later.
In my previous life as an Investment Analyst in London, I had been in the business of due dligence, analysing stocks and mutual funds. The key difference between my old life and the new one; I was now working with a distinct lack of information. Earnings ratios, Net Asset Value (NAVs), and balance sheets used to be available at the click of a mouse. So to work on analysing an enterprise with no ready product, no operations or no cashflow statements, was new to me.
Fortunately for me, I was working with one of Villgro’s senior advisors who was there to guide me every step of the way. Our first task was to meet the entrepreneurs and get to know them and their product. In this case, we travelled to Delhi to meet with a young duo who had produced an innovative product to be used in neonatal resuscitation. They were passionate, driven and committed to seeing this product come to market and saving the lives of millions of babies.
Although I shared the entrepreneurs’ excitement about the impact this new technology could have, I had to provide a researched and unbiased report. I had to validate claims made by the entrepreneur which is a key part of the due diligence process. This includes confirming whether there is a need for this product and if target customers will purchase this technology. In addition the pricing and competitive landscape was also important to consider amongst many other apsects.
The validation process physically translated to this;
I used the internet to read more widely about infant mortality and gather general market research.
I picked up the phone and spoke with manufacturers, suppliers, competitors, product experts and many others.
I visited hospitals to speak with pediatricians, junior doctors, medical students and nurses.
The latter presented the largest problem. I know doctors are busy people but here in India, they appear not even to stop to catch their breath. Persuading them to let me into their office, let alone give me 15 minutes of their time was like squeezing blood out of a stone.
First there was the matter of getting past the sneering receptionist who would tell me to go away and come back the next day. Quite often I was just told me wait with no explanation of when I might be able to talk to the doctor. India was teaching me patience – a missing virtue which my poor mother had frequently asked me cultivate over the years.
On the occasions I did manage to successfully set them up, my hospital visits were by far the most interesting aspect of the investment process. I enjoyed interacting with potential users (i.e. doctors and nurses), seeing their excitement (or sometimes lack thereof), hearing their feedback, and listening to their constructive criticisms.
Of course the visits also serves a greater purpose; it’s the closest I’ll ever get to really experiencing the gravity of the situation. Seeing with my own eyes the fragile babies fighting to live puts the ‘bigger picture’ in view. That there are young social entrepreneurs working to make the fight just that little bit easier is an inspiring thing indeed. I’m just glad I could play some small part in bringing them the attention and funding they richly deserve to start them on the long road ahead.
Aparna holds a Masters in Finance & Investment followed by a career as an Analyst/Portfolio Manager in the Asset Management industry. She has worked in London’s financial district for nearly a decade and now wants to bring her skills to the social sector. Aparna will be conducting due diligence on companies for inclusion in Villgro’s portfolio and contribute to SEED where she will help a portfolio of companies scale up and raise their first round of funding.