Program Structure

Need for PRAISE?

Indian start-up enterprises lack access to risk and venture capital, as documented in a recent study by Intellecap on financing gaps of the MSME-sector. Impact Funds aim to close the gap and provide equity to MSMEs working in high impact sectors. While impact investors have indicated interest in contributing to this space, lack of “investment readiness” continues to remain a major barrier to the deployment of this capital. Investors identified “shortage of high quality investment opportunities” as one of the most critical challenges to growing the impact investing industry. Many enterprises are hardly known in the ecosystem limiting the pipeline largely to players in the tier-I and tier-II cities. For social enterprises to become more attractive to the impact investors there is a need to “build” markets – to improve industry infrastructure, to remove market barriers and more critically to build capacities of social enterprises themselves to help them validate and refine their business models.

It is therefore essential that the social enterprises whose business is performing well, receive the support they need to grow by accelerating investments and related regulatory and administrative efforts.

PRAISE Solution

A Speed Dating session was organised by GIZ and SIDBI in Tie-up with Yes Bank during Sankalp 2014. The Speed Dating session saw 9 Lenders/Banks interact with 35+ enterprises from a wide variety of sectors and stages. 91springboard had played an active role in bringing in the lenders/banks and organizing the dating session. Fruitful discussions followed the event and the concept of PRAISE began as an afterthought.

Taking the learning from last year, PRAISE was conceptualized with the intent to take those efforts forward and create a program where good social enterprise are recognized and more importantly supported. The key focus of output remains providing easier access to capital and financing to these enterprises. The enterprises must focus on their business more while PRAISE assists in shaping the enterprise to become investment ready on fronts other than the business alone. PRAISE aims to create positive economic and social results in India by making a sustainable contribution to development in the country.

How is PRAISE different?

The program will provide an efficient mechanism to crowdsource best for-profit ideas and ventures around the country dedicated to creating a sustainable impact on vulnerable communities. Access to finance and specially, different financing options viz. debt instruments, continue to remain a big gap for Social Enterprises. PRAISE aims to close multiple gaps by promoting acceleration of investments with pure focus on helping good startups close the committed funding, get money in the bank and thereon focus on their business growth. It would also provide a good platform to all of the selected entrepreneurs to interact with renowned mentors and investors to advance their business to the next level.

What happens in the PRAISE program?

The program would have elements that are physical and virtual. It is organised as a combination of 3-6 days onsite workshop along with 1-2 months offsite support. An enterprise can expect 6-8 weeks engagement in total to prepare them for investments. The focus is to help sort specific issues to raise investments, more than serving as a general accelerator – assuming business & strategy is taken care of. The accelerator covers aspects like Founders’ Agreements, Compliances, Fund Requirements, Target Investors, Debt Structuring, Accounts Overview, etc. Apart from the talks and workshops for the selected startups, the enterprises would benefit largely from the involvement of SIDBI and other leading impact investors. The rich network of PRAISE provides the Social Enterprises with a strong platform to grow.

How does the investment work?

PRAISE links up and works closely with other SIDBI & GIZ initiatives. SIDBI typically performs debt funding in early stage enterprises. PRAISE provides a convenient platform for SIDBI to grow social enterprises looking for a venture debt.
Angel investors and other institutionalized investors typically invest based on their interest in return for a corresponding stake in the enterprise, to share the task of growing the enterprise.
The investment range for SIDBI and the investors may vary depending on the enterprise, the market and industry. However, depending on the investment required in the enterprise, syndication across multiple investors would also be worked out through the PRAISE program, because at the end of the day, our aim is to PRAISE you by Promoting Acceleration of Investments in your Social Enterprise.