00:16 You have worked so hard to develop a new product, and even managed to build a viable business case around it. You have also tested your idea a few times with potential consumers who totally love the idea. Now, what stands between you and fully implementing this awesome, innovative idea is funds. Then you get a chance to pitch your idea to an investor. You only have 10 minutes. What do you do? What do you do? Well, you take it easy, you calm down, and you give at a rock-solid performance by telling a compelling story about your innovative idea. But you can only do that if, one, you know what the investors are looking for and, two, you are adequately prepared. I'm Ken Owino, and you are listening to Zoom Africa, a production of BoP Innovation Center, and in this episode, we are talking about pitching to an impact investor.

01:33 Ope Olanrewaju knows what it means to pitch to impact investors. Ope was crowned the Scaling Up Nutrition champion and winner of the first-ever Scaling Up Nutrition, or SUN, Pitch Competition in October 2018. Ope is the founder of Kennie-O Cold Chain Logistics or KCCL, a company that provides reliable cold chain solutions for the Nigerian food industry. Ope was the best out of more than 450 outstanding applicants from Nigeria, Tanzania, Mozambique, Malawi, Ethiopia, Kenya, and Zambia. The SUN Pitch Competition showcased SMEs that are innovatively improving diet and tackling malnutrition and highlighted new investment opportunities for these kind of companies. Now, Ope attributes his winning pitch to being consumer-focused and, even more importantly, pegged on having an impact.

02:48 Because you must know your customer. What are their pains and that pains, well, how can you relieve it so that becomes a gain to them? For instance, at KCCL, looking at our customers, their pain number one is to reduce waste, two is to maintain the quality, and three, timely delivery.

03:11 Investors can only trust you with your funds if you can prove that you have the capacity to execute your idea. Investors want to know what resources have you so far invested into the idea and what milestones have you achieved so far, which can be used to gauge the future of your business.

03:34 Investors are looking at your track records. Let's see your track record or traction from where you started. Let's see your growth. They want to see your growth when you started, what was your revenue at the first year, the second year, the third. You want to show them some figures. You must be able to carry them from point A to point B to point C. This is where we were from here, this is where we are now, and this is where we are going in the future. That must be clear to you. If it's not clear to you, it can't be clear to the investor. If it's clear to you, you must be able to communicate that to the investor. We just have a short period of just three minutes to present to the investor, and they can make decision based on what you actually... on what they can hear or what they can see. You must have a good traction. That must be clear to you. You must have this ability to communicate what you have to them.

04:41 It also goes without saying that you should be passionate about your innovation.

04:48 Beyond what you show them, you must be able to say I believe in this passion within me, which is... it is contagious. It's as if I am just humming this thing out because it is just side of me. I'm so passionate about it. I do. I presented. It shows that look, you know what you are doing. Even if you wake me up in the night, it's there!

05:13 When you were raising funds for inclusive innovations, that is one key additional element that impact investors want to see from your pitch. You will have to demonstrate the potential for impact on low-income communities.

05:29 Don't go in there because of the money. Go in there for the value you got to give to the people. Keep at it. It might take time, but once you are passionate about something it doesn't matter what you go through. You still want to keep going, keep pushing and that is what has help us this far. There were times we were discouraged, we had issues but we kept on with it and that is just about life. You can't just give up.

06:10 Leslie Labruto is the head of global energy at Acumen, a non-profit impact investment fund with over 15 years experience in investing in social enterprises that serve low-income communities in different regions of the world. Leslie is the kind of person that knows so much about what impact investors look for in a pitch.

06:34 When entrepreneurs are pitching to impact investors. There's really five areas that I recommend entrepreneurs focus on. The first is clearly articulating what is your product or service so we can really understand the business model. The second thing is the market size, so be really realistic about your market size. For example, you could say that there's 600 million people without energy access. So our market size is 600 million. But try to really break that down for the investors. So you can say what is reasonable to achieve in your first year and your third year and maybe your fifth or ten year. The third thing we want to know about, and probably the most important is the team. Who are you? What have you done before? What motivates you? And really what is your intent in starting this business?

07:19 The fourth thing we look at is the deal. So what is the opportunity on the table? Talk a little bit about valuation expectations, how much money you're looking to have invested, what type of capital you're looking to receive, debt-equity, how much, what is the route? And the last thing we recommend is really talking about impact. A sharing. You know, what is your perspective on the impact from the customer's perspective? You can share high-level numbers, but really what is that customer's journey and how does your product or service really change or meaningfully improve that person's life?

07:50 You'll understand that some investors look for businesses that are just starting up and some ones to invest in businesses that have been around for some time, so it's of utmost importance that you ensure that your business aligns with this.

08:06 We use a model called from blueprint to scale and there's really four phases of a company's development. They can be in the blueprint phase where you really just have an idea and you're trying to make it a bit more concrete. Then you move to validate and that's when you have your prototype created. You have a few customers and you're trying to validate your business model. Then you're in the prepare phase and that's really when you've kind of figured out most of the kicks your business model. You have the right systems in place and then you go to scale and that's when you're really moving, rocking and rolling and everything is sort of working in a way that's functional, like a full business and Acumen really invest in the validate prepare phase and what we're looking for is that you have a few customers, ideally anywhere from a handful to a couple of hundred to a couple thousand so we can really understand is your product or service changing lives before.

09:02 You are listening to Zoom Africa with me, Ken Owino. We've been talking about pitching to impact investors. Are you planning to pitch your innovative idea to an impact investor? Then remember that one, you have to do your homework, get to know your impact investor and ensure that your business aligns very well with the requirements of the investor. And two, when it comes to impact investor, it's never all about the money. You will have to demonstrate impact on low-income communities. And finally, just ensure that you have a rock-solid performance. That is you communicate your impact clearly and in the most compelling way. That is all we had time for in this episode. and this episode also marks the end of our series of podcasts. I hope you have learned a lot and are ready kickstart your innovative business. We will be back very soon with a new series. But until then, keep on innovating my name is Ken Owino.