Biniyog Briddhi Conducts Investment Readiness Booster Workshop For Five Key Ecosystem Builders

The Investment Readiness (IR) Booster Workshop was delivered to participants from five key ecosystem builders in Bangladesh

As a follow-up to the Impact Measurement & Management (IMM) Booster Workshop held in January, the Biniyog Briddhi (B-Briddhi) programme organized an Investment Readiness (IR) Booster Workshop to support the growing impact ecosystem in Bangladesh. The workshop was conducted with five key ecosystem builders on March 19, 2023. 

The aim of the workshop was to refine and enhance the Investment Readiness knowledge and skills of the service providers, particularly in innovative financial instruments, deal structuring, and term sheet negotiation.

The workshop was attended by five key service providers: Bangladesh Angels Network, BetterStories Limited, Startup Chattogram with De Tempete Limited, Turtle Venture, and Truvalu.enterprises. 

The workshop included two advanced-level sessions on financial instruments and deal structuring by Bijon Islam, Co-Founder and CEO at LightCastle Partners, which intended to build on participants’ existing skills in investment readiness from Biniyog Briddhi’s Train-the-Trainer programmes.

Based on the Innovative Finance Toolkit, participants delved into innovative financial instruments and their potential use cases at each stage of an impact enterprise. Additionally, there was an in-depth discussion around priced equity rounds and convertible instruments and various impact parameters. The sessions also included an analysis of SAFE agreements and common terms and clauses in a term sheet and investment agreement. 

Participants were also tasked with an interactive group activity, in the form of an Investment Game, where they examined two education technology enterprises to determine which enterprise they would invest in, which financial instrument they would use, and what terms they would include.

To conclude the workshop, Mustafizur Khan, Partner at IDLC VC Fund I, Founder & CEO at Startup Dhaka, and Founder & CEO at Upskill, held a session on his experience and expertise from the perspective of an angel and VC investor.

Below are the five key takeaways from the IR Booster session:

1. Impact-linked financial instruments go beyond helping impact enterprises with access to capital- Linking impact to financial returns can help investors and enterprises stay aligned on their shared interest in tackling specific social problems, build trust with stakeholders by providing a measurable approach to verifying impact data, and enable enterprises to scale operations and expand to more communities.
2. There are a number of impact-linked financial instruments for enterprises and investors to leverage, and the right instrument depends on the objectives of the investor and the needs of the enterprise. Depending on the stage of the enterprise and its impact management capacities, investment deals can leverage different kinds of catalytic impact-linked financial instruments such as SIINC (Social Impact Incentives) and Impact Ready Matching Funds (IRMF), or impact-linked loans and convertible notes. Investors and enterprises can make use of the Impact-Linked Finance Calculator to better understand and inform which Impact-Linked financial instrument is the best fit for them.
3. The stage of the enterprise is an integral element of shaping investment decisions in terms of due diligence, financial instruments, and impact metrics. While a capable and coachable team is important for an enterprise at the early stages of investment rounds, the market size and product traction become increasingly important in late-stage investment rounds. 
4. Integrating impact parameters in investment deals and negotiations can help enterprises focus and maximize their social objectives. Impact parameters for an enterprise should evolve as the enterprise matures, to incorporate a dynamic focus on social impact and maximize the enterprise’s social returns.
5. The term sheet structure can be a way to identify and emphasize social values and mission in impact investment deals. While traditional term sheets usually outline the investment amount, board seats and voting rights, tag-along and drag-along rights, and liquidation preferences, additionally incorporating impact-related terms can be an effective way to align the enterprise’s goals for social return.

This workshop underpins one of B-Briddhi’s key program pillars around Capacity Building.  Through the workshop, key service providers in Bangladesh received crucial insights from prominent industry leaders on how to enhance and boost the local impact enterprise pipeline. Such capacity-building efforts will contribute towards Bangladesh’s budding impact investment landscape. To be part of this growing impact investing ecosystem in Bangladesh, stay tuned to www.sie-b.org!

Biniyog Briddhi is a multi-year program, supported by the Embassy of Switzerland in Bangladesh and implemented by Roots of Impact and LightCastle Partners. Set up as a public-private development partnership (PPDP), the programme strives to improve the financial, social, and environmental performance of impact enterprises by helping them to master investment readiness and impact management and get ready to access innovative finance to scale.