Reflection on Cohort 1 Selection and New Application Updates
As we move ahead with our application and selection process for our next cohort, we wanted to provide additional details on how we thought out about selecting Cohort 1. We hope this information will give previous and future applicants further context into how we screen candidates for the Accelerator. If you’re launching an impact fund and feel you are further along in the process than is suited for our Accelerator, please contact us regarding other opportunities to work together.
A Few Key Characteristics to Highlight from Cohort 1: The three teams in our first cohort distinguished themselves in a number of ways including:
- A Team with Relevant, Local Experience and Networks: All three teams in Cohort 1 had 10+ years of investing experience. The type of investment experience varied but everyone had a solid foundation to draw on as they launch their impact fund. While there were a number of impressive individual candidates who applied, we believe that a team is necessary for long-term success with any new venture – impact funds included. If you don’t have a partner or team, we recommend taking action to build one immediately. Finding the right partner takes time and in most cases, the right partnerships typically stems from people who have known each other for years. We also heard a lot from teams who were looking to launch funds in markets where they did not currently have a presence or local networks. We believe that in order to be successful, particularly in early-stage investing, a strong local team with senior leadership on the ground is essential.
- Traction with Potential LPs: One of the most important questions we ask ourselves when evaluating fund management teams is “Can they raise a fund?”. As a fund manager, raising money will be one of your primary responsibilities. If you’re not comfortable with that, you’re either in the wrong business or you need to find a partner who is ready to raise what’s required. The team must have strong networks and well established relationships to secure the capital necessary to launch a fund. At a minimum, we expect to see teams that have started to build a qualified fundraising pipeline and are getting positive signals from investors. All of the teams selected for Cohort 1 had at least some level of soft commitments. Before anyone was officially accepted, we spoke to at least one of their potential investors about why they had chosen to support the specific team. We also looked at the supporting documentation (pitch decks, one pagers, etc.) to better understand how teams have been working to test and validate their idea in the market.
- Commitment: It is important that the teams we partner with are fully committed to generating both profits and positive impact. We expect fund management teams to include their commitment to impact in formal fund documents. You can read more about our thoughts on impact here in a previous post. Additionally, we developed a “Profits and Values” approach through our work with Unitus Ventures (formerly Unitus Seed Fund) that provides further context. When we evaluate commitment to raising a fund, we ask ourselves if we think that the team is going raise an impact fund regardless of the outcome of our selection process. If we feel that the team would move forward even if they were not selected, it indicates that they likely have the grit necessary to be successful fund managers. Lastly, we expect each fund management team to make a financial commitment to their fund in order to align interests.
Updates to the Application: We made a few changes to improve the application and selection experience. Some notable updates include:
- Additional Information Required to Request the Application: It’s still an easy process, so if you haven’t already, download the current application and apply soon so we can get the conversation started.
- Fewer Questions – We realized during the initial screen that some of the questions would be better suited for a follow up conversation. It’s still a non-trivial application, but anyone launching an impact fund needs to be able to answer the questions asked as other potential investors are likely to request similar information.
- Supplementary Documents – Very few teams that did not provide some supplementary documentation (pitch decks, one pagers, etc.) made it past the initial screen. If you’re serious about launching a fund, we expect you to produce an initial version if you haven’t developed something already.
- Updated Questions – We had some variation in how a few questions were interpreted so we adjusted our language to provide more clarity.
We hope this information provides additional context on some of the characteristics we are looking for in applicants and that it is useful as you think through applying for the next Cohort. If you still have questions after reviewing this post and the other information on the site, feel free to contact us.