As part of our quest to ”re-define growth”, PICNIC Mexico invited Paul Miller of Bethnal Green Ventures (BGV) to the Latin American Forum on Impact Investing to share some of the major trends happening in the world of social innovation accelerators.
BGV runs a three-month, social innovation accelerator program in London. It graduates 20 early stage companies per year, investing £15,000 in seed capital for each startup. BGV offers group training for its startups one day per week. The remaining four days are used to provide one-on-one training with BGV team members.
NESTA commissioned Paul to write a soon-to-be-released research report called “Good Incubation” which will be published in April 2014. PICNIC Mexico participants received a sneak preview at the Latin American Forum on Impact Investing.
Defining Features of Social Innovation Accelerator Programs
Paul begin by defining the key features of a social innovation accelerator program:
1. An open application process.
2. The provision of investment funds.
3. A cohort of teams.
4. A time-limited program.
5. Access to networks and resources.
Accelerator Programs Trends
Tech accelerators are multiplying steadily. Social innovation accelerator programs are also being launched all over the world, from Latin America to Africa, and they are morphing to match the unique needs and opportunities of the markets they serve.
Paul spoke about several trends including:
Vertical Specialization: these accelerator programs focus on specific issues such as health and education. The advantages of this approach is that it is easier to develop specialized networks of investors and mentors as well as measurable impact criteria. Examples include HealthBox (which supports entrepreneurs in the healthcare industry), Rock Health (which provides funding and full-service support to tech entrepreneurs building useful health solutions) and Sweden’s SHIFT, a platform and lab devoted to sustainable solutions.
Domain Specialization: these accelerator programs focus on a specific specialization such as design thinking, customer development and marketing. Paul cited GreenStart, a sustainability-focused accelerator program which collaborated with long-time PICNIC program partner frog design to inject a strong design process sensibility into its program. It now bills itself as a “venture firm with a built-in design studio”.
Diversification: these accelerator programs begin by offering a program but then move into other areas such as co-working spaces and start up competitions. Dhaval Chadha was one of this session’s participants. He is a founding partner of Pipa, a high impact accelerator in Brazil. Dhaval spoke about Pipa launching an investment fund after establishing its accelerator program as a means to become more competitive and attract promising entrepreneurs. (Pipa invests offers an investment of US$80,000 to startups in its program.)
Thesis-based Investment: these types of accelerators (and in some cases) incubators develop a social innovation ecosystem around a specific community. For example, Future of Fish provides targeted incubation services around its mission to develop “…a global supply chain that produces legal, traceable, trustworthy fish; that rewards responsible fishing with better prices; and that fosters resource conservation.”
Program Transparency: These accelerator programs openly provide data, analysis and results related to their programs in an effort to help improve the efficiency and success rates of launching social ventures.
Collaboration Amongst Accelerators: Paul spoke about Silicon Valley as an ecosystem in which accelerator programs openly collaborate. Accelerator programs hold their Demo Days on the same day for investors to achieve time efficiency.
Culture is Key
Paul emphasized that the with the explosion of accelerator programs around the world, culture is key. Program participants set the culture so it’s important to understand motivates them.
For BGV, its culture is “founder-friendly” as it encourages founder to take control of their destiny. BGV is transparent about the conditions of its program. For example, BGV receives the same amount of shares as founders which helps defend founders against predatory investors.
Look out for the “Good Incubation” research report which is scheduled for release in April 2014.
Report by Deborah Carter, PICNIC’s Director of Sales and Strategic Partnerships