ARCHIVES

► Dr. Richard Smith, Director of the Venture Finance Institute, presents the opening lecture on 'How Venture Capital Works.' His lecture is divided into three parts.

Part 1 includes a discussion of why Dr. Smith believes academic research can improve the evolution and practice of venture capital investing (which historically has been considered an art that cannot be taught) and a review of the work of the Venture Finance Institute in the areas of emerging and alternative market investing.

Part 2 reviews the objectives of this workshop on financing revenue-producing ventures of nonprofit social enterprises, discusses the agenda for the next two days, and puts forward the key questions the conference will address with respect to attracting private investors to invest in nonprofit enterprises.

Part 3 focuses on the venture capital model itself, its various components, and how it might be adapted to meeting the high growth financial needs of the social enterprise sector.

► Dr. Glen Yago, chief economist of the Milken Institute, discusses the current state-of-the-art of investing in emerging and alternative markets, including private equity investing in revenue producing ventures of nonprofit social enterprises. This fifty-minute luncheon lecture is segmented into five parts, each approximately ten minutes in length. The subject matter covered in each segment is presented underneath its corresponding link .

Dr. Yago opens his discussion of alternative market investing by reviewing the history of modern economic thought regarding the creation of wealth and the role of philanthrophy in society.

In part 2, Dr. Yago introduces the idea of a sustainable business model as an essential feature of today's state-of-the-art social benefit organization. The major challenges he focuses on are the need of nonprofit social enterprises sector for management talent, performance measurement resources, and access to growth capital.

In part 3, Dr. Yago chronicles the sources and types of capital available to nonprofit social enterprises today and highlights the sector's need for liquidity. Topics covered include the availability of modern financial tools adapted to the needs of the nonprofit social enterprise sector, including such innovations as loan securitization, loan pooling, loan loss reserve funds, and equity-equivalent investing.

In part 4, Dr. Yago continues his discussion of financial innovation in the public and nonprofit sector by citing several notable examples of success. These include the renovation of the public library space in New York City, the overall work of the Calvert Foundation, the increased use of PRIs by private foundations, the innovative use of debt to act like equity investments (e.g.,equity equivalents), and experiments by numerous others to make growth capital available to nonprofit social enterprises that need and know what to do with it.

Part 5, which includes a discussion of past government failure to effectively finance ventures that address community and social problems, concludes on an optimistic note by citing recent examples where successful Wall Street professionals have now turned to devoting their time and talent to developing powerful new financial solutions to growing sustainable businesses that address soclal problems. Andy calls these people the financial social enterpreneurs of the 21st Century.

► Chapman University Professor and angel investor, Richard Sudek, explains how angel investing works in the U.S. and why traditional high-tech oriented angel investors may be good candidates for social enterprise investing.

► Want to see how a social entrepreneur looking for private capital organizes their presentation? Then pay attention to MIND Research Institute founder and chairman, Ted Smith, as he delivers an angel/VC-style business plan presentation to grow MIND's computerized math enrichment programs to school kids throughout the nation. Ted's presentation is broken into two 10-minute segments and provides an exellent example of how to tailor a social enterprise funding proposal to a return-oriented group of angel investors.

Part 1 of Mr. Smith's powerpoint business plan presentation covers the organization's social impact, an overview of its target market, and a description of its products and services.

Part 2 covers the revenue model, competitive advantage, financial projections, management team, the funding being sought, and exit strategy.