48 | Small Medium Entrepreneur | August 2014 August 2014 | Small Medium Entrepreneur | 49

What is your motive behind writing the book – “Conquering the Chaos: Win in India, Win Everywhere”?With this book, I have tried to explain why India is a critical market for global firms notwithstanding the slowing economy and many challenges of doing business here. I further argue that problems like corruption, poor infrastructure, taxation issues and bureaucracy are defining features of almost every emerging market, not just India. But no other emerging market has the same potential or the depth of talent that India has. Therefore, India is the critical litmus test for global firms.

If global companies can win in a complex and challenging market like India, they can thrive anywhere else; and conversely, failure in Indian market indicates similar challenges in other emerging markets. The companies that do well in emerging markets like India do three things very

ravi venkatesanEnablers

From Chequebook Philanthropy to Impact Investing

QA&

differently – 1) They have a long term commitment to winning here; 2) they are willing to act local and 3) they create a good and stable leadership team on the ground.

How venture philanthropy is different from impact investing?Venture philanthropy and impact investing are complimentary to each other. Venture philanthropy takes concepts and techniques from venture capital finance and applies them to achieve philanthropic goals. This implies being disciplined about selecting the NGO that you are going to support and fund, the willingness to take a multiyear approach and to invest time and intellect to build capacity. In contrast, impact investing is socially responsible investing where investments are made into real businesses that generate a measureable social impact in addition to a financial return.

What do you think will be the future of venture philanthropy in India?India is a world leader in frugal innovation. I see more and more young people drawn towards entrepreneurship. The stigma of failure is gone. Now we have the combination of huge opportunities, a good talent pool and an entrepreneurial ecosystem emerging in several cities. I think the prospects for venture investing and especially impact investing in India is quite good.

and finally, there are challenges in distribution. Reaching low-income population is hard and reaching them profitably is even harder.

How can large organisations benefit from venture philanthropy?India has around three million NGOs. Unfortunately, they don’t have the capacity to absorb substantial funds. On the flip side, majority of big firms do not have much clue about how to use their money for a good cause. They often confuse CSR with charity and end up practicing ‘chequebook philanthropy’ which has very less sustainable impact. But they don’t realise that CSR projects can be an important source of innovation. Large firms need to have a disciplined approach with clear criteria for making grants to the most deserving non-profits. There are a number of underfunded and important areas that big organisations can consider like supporting NGOs that are working on human rights or governance. This will help in creating a portfolio of areas where they want to have impact. They should graduate from chequebook philanthropy to impact investing.

Interviewed by Swadha Mishra

Ravi Venkatesan, Co-Founder & Chairman, social venture Partners india, & venture Partner, Unitus seed Fund

Ravi Venkatesan has been recently voted as India’s Most Influential MNC CEO by country’s leading business newspaper and one of India’s best management thinkers by Thinkers50. He

is also the author of the bestseller “Conquering the Chaos: Win in India, Win Everywhere.” In an interaction with SMEntrepreneur,

he shares his views about the emerging concept of venture philanthropy and impact investing, present challenges for social

start-ups in India and the future outlook of the same.

What motivates you to invest in social space?Their focus on poor and marginalised people inspires me to invest in the social space. They do this by creating innovative and affordable products, solutions and business models.

In which sectors do you prefer to invest in?I prefer to invest in multiple sectors like healthcare, agriculture, education, tech for development and livelihood enhancement space.

What are the challenges for social ventures nowadays?Social ventures face multiple challenges. Lack of funding is the one. The problem with Bottom of Pyramid (BoP) start-ups is that they can get money either from friends and family, incubators or from angel investors, but after that they face the ‘seed gap’ due to lack of active investors in that specific space. Attracting and retaining talent is even harder in this sector given lower salaries, and corruption is omnipresent,

soCial ventUre Partners india (svP)

Location: Bangalore, Chennai, delhi, Mumbai, PuneFounded: May 2012Sectors: livelihood

enhancement including job creation for unskilled workers,

effective vocational training and job placement, incubation of

social enterprises and supporting them by giving them access to

resources and connectionInitial Investment Range:

rs 10-20 lakh per year for 3-4 years

UnitUs seed FUnd (UsF)

Location: BangaloreFund Size: $13 million

Sectors: education, Healthcare,

agriculture, livelihoods, tech for development,

necessitiesInitial Investment

Range: rs 25-75 lakh

Existing Investee Companies:

Welcare, smile Merchants, istar, Hippocampus,

addressHealth, mGaadi, Jiffstore and Milaap