As the first 10 civic business graduate from Civic Incubator the first business accelerator for emerging civic ventures, Ayesha Khanna, president of the incubator shares what she has learnt so far about social startups
A business accelerator for social good. This is the initiative launched by Village Capital and Points of Light to inspire, equip and mobilize people to create positive change. The first national startup accelerator program focused on “civic ventures” opened its doors last November and the 10 nonprofit and for-profit civic ventures graduated in January, Ayesha Khanna, president of the civic incubator shared in a blog post the lessons she has learnt from this adventure.
1. Accelerators and investment terms are new concepts to nonprofit organizations and their Boards
According to Khanna nonprofits are slowly adjusting to the market which is moving away from purely philanthropic grants to more outcome-based and program-related investments. Nonprofits aren’t used to the role of accelerators and the concept of earning revenue and paying back a recovering loan after two years and hitting total revenue targets was intimidating.
2. Art matters as much as science when selecting teams
The entrepreneur’s growth orientation and coach-ability were critical criteria to the success of teams in the program. The intersection of the leadership and the venture both being a good fit was a challenge to find, but both are important criteria.
3. Peers are exceptional evaluators and can get into the investor mindset
The leaders’ interaction during the selection process proved to be indicative of how well they contributed to the success of their peers.
4. For-profit and nonprofit ventures can learn from one another and, in fact, bring important and differing strengths.
While early stage for-profits have a tougher time raising early stage funds but can scale much easier with a proven business model, according to Khanna, nonprofits with charismatic, effective leaders can more easily raise early stage funds, but risk prematurely scaling without building a sustainable business model for the long-term that includes repeatable revenue and earned income.
5. Rigor is missing in many accelerators, which do not measure metrics beyond the valuation of exits.
The metrics around “what does success look like” for graduation and the long-term for civic ventures is an area where we can provide important models and learning
Applications for the Civic Accelerator’s second round of investments in 10 start-ups will be open from Feb. 11 to March 15. To learn more and apply, go to www.pointsoflight.org/civic-accelerator.