What if the investor…

What if the investor ties such strong conditions to the investment that you would rather walk away than take the money? Our 8th Capability Program Team had to deal with this question after their investor pitch on July 14, 2016 in Zurich.

Following 10 weeks of research on the needs of the people living in Dundgobi, Mongolia, the team developed a professional business plan for their social enterprise. Community Hero Nangaa and her team played a key role in giving the team the input they needed to come up with a convincing value proposition.

Accompanied by business coach Nathalie Moral from mavia.ch, the team did two rounds of mock pitches before meeting their investors. Everyone was convinced that the investor pitch would be a moment of pride or as Wolf put it: “We will earn the fruits for our hard work tomorrow”. Instead of the pre-pledged EUR 20,000, the team was targeting EUR 24,000 as total investment.

But things came differently as planned. Following a very professional pitch, the three investor representatives from Swiss Re started asking critical questions on the pricing of the courses, the influence of the learning center on the environment and the role of digitalization. Most challenging proofed to be the condition to finance the renovation of Nangaa‘s building out of a bank loan in Mongolia at an interest rate of 24% per year. By that way, Nangaa would participate in the risk of her learning center and not only benefit from an upgrade of her property.

Investors Angela Marti, Fritz Gutbrodt and Gerhard Lohmann from Swiss Re

The team put in a lot of efforts in convincing the investor but was left with a condition which they did not want to accept for the high interest rates in Mongolia. The leadership session on Friday with Heike from TGC.ag helped the team to analyze what has happened and reflect on what could have been done differently.

As renovation works had to start soon, the team decided to work on a thorough feedback document to the investor. Key part of the document was how to better finance or share the risk of the 5 rooms refurbishment with the community hero (Nangaa) who is also the owner of the rooms. The team proposed Nangaa to receive a discounted rent over 10 years with stronger contractual framework to create risk-sharing mechanism for the refurbishment works

The 8th Capability Program after the investor pitch
The 8th Capability Program after the investor pitch

It took two days for the investor to answer that they “feel comfortable with the information provided and [the] Option [] seems to be a very viable possibility addressing our concerns.” The team was full of joy given the effort they put into the business plan and the pitch. Community Hero Nangaa received the news in a video call. She was “she is absolutely ecstatic about today’s good news”.

While the actual pitch went differently than expected, it was a great proof or the team and its vision. They continued to fight for their idea and succeeded in bringing Swiss Re Foundation as investor on board. Congratulations to all for this great achievement!

CAP8 Vision set in Module 1
CAP8 Vision set in Module 1

Within the next 10 weeks, the team will implement its business plan in Dundgobi, Mongolia. A lot needs to happen besides the renovation of the building. We keep fingers crossed and look forward to opening up our new learning center.

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