This half semester course provides students interested in impact investing with the opportunity to perform due diligence on start-up social enterprises (nonprofit and for profit ventures with a social or environmental mission). Students will be randomly placed in teams that will evaluate social entrepreneurs who have applied for funding from the Tamer Fund for Social Ventures, completing detailed due diligence on the applicants, the social ventures, and the sector. The student teams will also support the social entrepreneur in the design of their presentation to the class. The course will conclude with a written due diligence report and recommendation to the Tamer Venture Fund Investment Board.
This course is designed to teach students how to perform due diligence on early stage social ventures, including for-profit and non-profit ventures. The course is composed of six modules:
1. Due Diligence – understanding the process that traditional venture capitalists and angel investors use when evaluating for-profit enterprises, with a focus on early stage businesses.
2. Due Diligence: Emerging Markets – identifying and managing the challenges faced by venture investors in developing countries, examining both traditional investors and investors focused on social ventures.
3. Funding Non-Profits – understanding how leading philanthropists evaluate non-profit organizations for donations and other forms of funding.
4. Impact Measurement – evaluation of the tools used by impact investors and philanthropists to measure their effectiveness.
5. Deal Structure and Valuations – understanding how investments in early stage ventures are optimally structured and negotiated by venture capitalists and impact investors.
6. Presentations and Reports – student teams will provide a one-page overview of the social venture they have reviewed, followed by a 7-minute presentation by each social entrepreneur. Student teams will submit a comprehensive due diligence report on their assigned social enterprise during the exam period following the end of the course.
This course is designed for MBA students interested in impact investing, social entrepreneurship, or philanthropy. The objective of the course is for students to learn both the theory of investing in early stage social ventures and the practice of evaluating early stage social ventures through a due diligence process. This course is not designed for the evaluation of larger/long running social enterprises.
Co-Director of the Tamer Center for Social Enterprise; Elizabeth B. Strickler '86 and Mark T. Gallogly '86 Faculty Director; Professor of Professional Practice
Bruce Usher is a Professor of Practice and the Elizabeth B. Strickler '86 and Mark T. Gallogly '86 Faculty Director of the Tamer Center for Social Enterprise at Columbia Business School. Professor Usher teaches on the intersection of finance, social and environmental issues, and is a recipient of the Singhvi Prize for Scholarship in the Classroom and the Dean’s Award for Teaching Excellence. Prior...