The elea Way - Preview

elea’s FOUNDATION AND OPER ATING MODEL

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geographical mix, and the diversity of themes – were still at an early stage of development. Over the years, two things have changed: (1) elea has sharpened its focus and continuously refined its criteria based on accumu- lated experiences, with both successful and less successful investments, as well as growing professional capacity, and (2) the impact entrepreneur- ship movement has gained such momentum on a global scale that the number of potentially attractive investment opportunities has exploded. Along with this trend, there has been a step change in visibility: nowa- days, most impact enterprises already have a company website describing their vision and ambition, and they have an active presence on social media. Frequently, they begin to market their purpose long before they are in a position to offer products and services to clients. As a result of this evolution, and because the effectiveness of sourc- ing, to a large extent, determines the potential for impact creation, elea made a major resource commitment to this task and adopted a systematic, proactive methodology. The principle upon which this methodology is based is to search for what we would like to invest in rather than to evalu- ate what is brought to us. While we still regularly look at a number of unsolicited proposals, the core sourcing engine starts with desk research, where promising opportunities are identified by theme and geography and prescreened along defined criteria. The criteria either relate to indi- vidual organizations or to an emerging new ecosystem or industry of impact creation. Peer-to-peer lending in agriculture was such a theme that emerged with the progress made in financial technology and addressed a key prob- lem facing farmers in poor countries; namely, the frequent lack of access to affordable working capital. elea wrote a white paper on this emerg- ing opportunity and then systematically researched individual enterprise activities in this field with the intention of picking two to three of those with the most promising models for doing deeper analysis. In this stra- tegic approach, which aims to understand entire impact ecosystems and the specific role of individual impact enterprises within them, we see ourselves aligned with a concept developed by Professor Alnoor Ebrahim at Tufts University in his book Measuring Social Change (Ebrahim, 2019). This concept differentiates among impact-seeking strategies depending on the level of uncertainty regarding cause/effect and on the intended control over outcomes. Those strategies with complicated cause-effect