A little more than five years ago, Brian Trelstad noticed a problem. As a partner at social and impact investing fund, Bridges Ventures, he learned his MBA interns wanted something their B-schools weren’t offering: a chance to manage an impact fund.
“They said, ‘I want to start a fund on my campus doing this impact investing,'” Trelstad recalls. The idea was nobel and worthy. But Trelstad didn’t see it immediately happening. Why? “Because the development office doesn’t want you talking to alumni about raising a fund and the finance office doesn’t really want to manage a small $2 million dollar fund,” continues Trelstad. “And you’re only on campus a couple years and it may take you 18 months to do this.”
So Trelstad and Bridges Ventures decided to team up with the University of Pennsylvania’s Wharton School and create their own course for the burgeoning population of MBAs keen on impact and finance. Enter, the MBA Impact Investing Network & Training (MIINT) program–a full-fledged online training for MBAs at elite B-schools and policy schools across the world that culminates in a pitch competition. Beginning in October, first and second year MBAs from blue chip B-schools form teams and choose startups to work with. From October through April, they participate in online modules and work with the startups to create a pitch for a portion of the potential $100,000 of seed investment for their startups.
FULFILLING AN EDUCATIONAL NEED
For Trelstad, the idea was obvious.
“There’s a huge interest among students in sustainable business, social entrepreneurship and impact investing,” believes Trelstad. “But there are almost no courses in this. And it’s sort of channeling this impetus or impulse of the students into an experiential opportunity. To learn how to be an impact investor, you have to make investment decisions. And to make investment decisions, you have to evaluate a company.”
Indeed, the interest is huge. After staying relatively small since the first version of the course began in the fall of 2011, participating schools zoomed from nine last year to 25 this year. All told, more than 600 students from business and policy schools around the globe took the course and then many convened in Philadelphia earlier this month to vie for the potential investment
TEAM FROM MIT SLOAN TOPS U.K. AND CANADIAN TEAMS
In front of an 11 member cast of impact investors from Bank of America Merrill Lynch, Goldman Sachs, the Global Impact Investing Network, among others, it was a team from MIT’s Sloan School of Management to reign victorious. The team of five, represented a yet-to-be-named venture described in a release from Bridges Ventures as “an innovative financial inclusion business that helps people in South America access credit.” After more “due diligence,” the venture could win the top prize of $50,000 in seed investment from Bridges Ventures. Teams from London Business School and the Schulich School of Business at York University in Canada, took second and third, respectively. Ventures represented by those two teams could receive $25,000 each from MIINT sponsor, Liquidnet.
For the MIT team, an extra amount of back-and-forth and willingness from their startup team to engage proved essential for the win.
“A big part of our success was the willingness of the startup we were working with, to see through some of these challenging questions,” explains MIT team member, Limor Bordoley, noting serious questions about competition and growth plans. “We were working with them to really understand their model,” Bordoley, a first year MBA, continues. “But we also worked with them to make sure they had a strong strategy and business model in place.”
GRAPPLING WITH TOUGH STARTUP ISSUES
Fellow team member, Pilar Carvajo Lucena echoed the thoughts also pointing out the validation they had when the judges were asking them the same hard questions they asked the startup. Trelstad says that’s not uncommon. Over the years, he explains, participating startups have mentioned being forced to answer tough business questions other investors haven’t asked.
One issue, in particular, Bordoley recalls was guiding the startup through conversations revolving around accelerating growth into three new markets in surrounding South American and potentially risk revenue losses. Or grow within the established market, which in short term was a safer financial option.
“Do we completely penetrate the market where we are now and we do this kind of slow growth and break even,” reasons Bordoley. “Or do we try and just go full-force?” The issue is not uncommon to what many startups around the world face.
COURSE WORK IS ‘STAGGERING’ BUT ALSO POTENTIALLY LEADS TO INTERNSHIPS
To be expected, the course can be a time suck. So much so, that Trelstad has started conversations with schools to potentially make it an independent study credit course. He believes the course is akin to a “two-unit, two-semester” course for all teams and “analogous” to a full-time course for the finalist teams. “The amount of work for these teams is staggering with out getting credit for it,” he believes.
Bordoley says that while impact investing is still in its infancy, administration at MIT Sloan and other elite B-schools are starting to take notice of the growing trend. Her and Carvajo Lucena are both prime examples to the trend. Both have ditched jobs at Deloitte to pursue their MBAs and are deeply keen on the impact investing concept. Impact investing initiatives like MIT’s Impact Investing Initiative, Wharton’s Social Impact Initiative and the UC-Berkeley Haas Socially Responsible Investment Fund, which is the largest student-run fund of it’s kind in the world, are starting to dot B-school campuses around the globe.
Finally, Trelstad says the course and especially culminating competition has proven to be a fruitful networking opportunity for all parties involved. Students across business and policy schools get to interact. Moreover, students and potential employers were connected. “We actually had interns hired by the judges who were there,” says Trelstad. “When somebody presents and it’s very compelling, it could lead to a job.”
Teams from The Wharton School won in 2012 and 2013. In 2014 and 2015, teams from Northwestern’s Kellogg School of Management took home top honors. Previous ventures to be funded are Jail Education Solutions, LearnSprout and GoalBook.