The elea Way - Preview

elea’s FOUNDATION AND OPER ATING MODEL 87

relationships and high-impact ambitions should be analyzed as entire eco- systems of social change that extend beyond single organizations in order to then identify attractive individual impact enterprise models. After elea has gradually reduced the number of potential investment opportunities from thousands to hundreds, it organizes research nights with the entire team in an effort to further reduce the number of candi- dates. This is done by means of an internal competitive pitching effort among small groups, which is followed by exploratory calls on high- potential candidates. The result is a few dozen potential investments that are then further screened, possibly on the occasion of an on-site visit. At some stage, the team forms a positive view and comes up with a pre- liminary investment recommendation (PIR), which lays out why a cer- tain investment could be attractive and what further analysis should be undertaken to develop an investment recommendation for the board of trustees. More recently, this process was enhanced by an additional element. As elea has been involved with certain enterprise developments that have continued on a very solid course of success for several years (e.g., our four lead cases: Angaza, Coffee Circle, Dharma Life, and BagoSphere), we naturally built on our growing confidence in their capabilities to leverage capital by offering them add-on investments. For example, we partici- pated in follow-up financing rounds for Coffee Circle and Dharma Life to fund further growth. We also provided match funding for BagoSphere’s efforts to raise local funds, thereby helping them to create a philanthropic arm for their business that provides students access to financing for their training programs. Due diligence, investment decisions, and contrac ting Once there is sufficient support for a PIR, elea’s team then embarks on a due diligence effort. At elea, due diligence is a crucial and challeng- ing task that we take very seriously and involves a significant effort. The complete process for an investment candidate of medium complexity can easily consume three to five person-months, and elea carries out between 5 to 10 due diligence efforts, on average, per year. Often, targeted entre- preneurs express surprise at how deeply we get involved, and mention that this is rather unusual in our sector of philanthropic impact investing.