Application for the Social Venture Fund (SvF)

Transcription

1 Application for the Social Venture Fund (SvF) The application process for the SvF includes: (1) Resume, personal statement, and mini case solution review, (2) Student interview, and (3) Faculty interview. Expectations SvF is seeking ~20 students to join its skilled and diverse team. Candidates are expected to effectively analyze business models and plans, perform due diligence, evaluate financial models, understand social metrics, recommend early stage companies for investment, consult with social enterprises, and continue to help develop the Fund. SvF is building teams that can scrutinize Education, Environment, Food & Nutrition, Finance, Health, and Urban Revitalization investments. Applicants for the Fund are expected to work with a diverse group of people inside and outside the University including professors, students, professionals in the social venture capital industry, and Michigan entrepreneurs. Students are expected to make the time and energy commitment on a weekly basis. This includes attendance at the Impact Investing class, mandatory weekly meetings, plus independent team meetings. A selected few will be offered the opportunity to help manage and grow SvF, as part of the management team, after a detailed feedback and review process at the end of fall semester. Since transactions do not follow the structure of the academic year, membership on a Fund will prevent students from participating in study abroad programs or longer-term, distant MAP placements. Application Materials (All single-spaced, standard 1-inch margins) Please submit all materials via to svf.applications@umich.edu no later than 08:00 a.m. on September 13 th. Use the subject line [Full Name] SVF Application. Application materials consist of: 1. Resume: Please submit a PDF version of your resume, generated through the My Impact site. 2. Personal Statement: The personal statement should be no longer than 1 page (font 11, 1-inch margins). You may want to emphasize some of the following: Interest in social venture investing and impact measurement What do you expect to learn and experience from your involvement? How that learning and experience are important to your career goals A high level of personal achievement and diverse experiences What skills, abilities and perspective will you offer to the fund Experience in marketing, finance, operations, fund development, product development, social marketing, and general management Experience in education, environmental equity, financial services, food and nutrition, health, and/or urban revitalization Any entrepreneurial or investment experience you may have had. 3. Mini Case Solution (3 ppt slides): See below. Selection Process The process involves a review of all applications and a series of interviews with the current team members and the Managing Director, Gautam Kaul. Interviews may vary in format from getting-toknow-you questions to an exploration of case analysis submitted by you. Final decisions are made in October. Applicants will be notified by regarding their status during the selection process.

2 Social Venture Fund Application Mini Case Instructions: 1. Read through the attached investment summary about Solar for All (S4A). The SvF team is debating whether to conduct a full due diligence process on S4A 2. Write a 2-slide power point presentation describing the thought process that should guide the SvF in its decision. What components should be considered and what important data points should be referred to You can use the below bullets to assist you in your thought process: Alignment with the SvF cause Typical investment factors as management, market, business model etc. What primary questions should be answered prior to continuance Main pros and cons you identify 3. There is no need to recommend a decision for investment. There is no right answer. 4. Please add an additional (third) slide recommending social metrics for the SvF to follow in order to conduct social evaluation 5. The ppt will not be presented by the applicant but only read by SvF team 6. Please use only the provided template (attached) and use a one-color scale

3 Solar For All (S4A) - Executive Summary Solar for All (S4A) brings the benefits of the new green economy to low-income communities in the form of stable electricity rates for non-profit organizations, reduced pollution and carbon dioxide emissions for cleaner air in the community, and green-collar career opportunities for local residents. S4A installs, owns, and maintains solar rooftop units on buildings used by churches, non-profits, and community groups. Without new financing options, clean energy solutions remain out of reach for nonprofits that cannot qualify for federal solar tax incentives or raise the capital needed to buy their own solar units. Through S4A, the nonprofits do not have to pay for the equipment or installation. Instead, when the solar panels produce electricity, these churches, schools and community centers rent this clean electricity instead of buying power from the local utility. This saves them money, reduces their environmental footprint, and reduces pollution. S4A provides solar to these building owners under an arrangement that functions like a lease, removing the costs and risks of solar and increasing green pathways out of poverty into prosperous solar careers during the installation of these solar units. Management S4A is an LLC registered in 2010 and wholly-owned as a subsidiary of Solar Richmond (SR), a green jobs nonprofit based in Richmond, California. SR provides hands-on solar industry training, transitional employment internships, staffing services, and consulting. Since 2006, SR has trained 160 low-income residents, placed 29 graduates in temporary jobs in the solar industry and 25 people in permanent positions. SR has participated in more than 40 installations. In 2009, SR graduates contributed to installation of over 800 kw of solar electricity, enough electricity to power more than 250 homes. As a subsidiary of SR, S4A benefits from the expertise of an established leadership team, including: Michele McGeoy, Founder, led SR to set national best practices in hands-on solar installation training, built and sold a software company, and started a nonprofit to address the digital divide. John Russell, Operations Manager, MS in Nonprofit Management from New School University Kandea Mosley, Director of Sales and Marketing, MBA from the Johnson School of Management at Cornell University The S4A staff is supported by a network of advisors including Van Jones, Gifford Pinchot and the Bainbridge Graduate Institute, Jude Heimel & Associates, Bright Green Talent, and Duane Morris LLC. Company Profile S4A moves the job interview from the desktop to the rooftop by creating transitional work opportunities on every solar PPA installation. These installations provide a bridge between training and permanent employment. Interns receive job search assistance, computer skills, interview prep, communications skills, industry leader visits and advanced solar training. Over the past year, SR has facilitated more than 20 paid transitional work opportunities. As a PPA provider, S4A will own the solar and require that the local vendor on every S4A installation hire program graduates as interns. S4A s installations formalize and scale-up SR s success. This model does more than create a pipeline for a huge number of green-collar solar jobs for low-income workers; it also helps the environment, benefits the community, and provides a long-term revenue stream for SR to become less dependent upon foundation and donation dollars.

4 Market Analysis U.S. solar photovoltaic (PV) demand grew 37.5% in 2009, even as the automotive industry plummeted, banks faltered and the average duration of unemployment reached 29 weeks, longer than at any other time since tracking began in According to market analysis from GTM Research, the national solar PV market will triple by 2012, growing to more than $6 billion. By 2030, net job growth is expected to include 487,000 new jobs in PV development and installation. In contrast, as of July 2009, Richmond s unemployment rate was at 17.9%.5 It ranks first in California and ninth in the nation as the most violent city per capita.6 Half of solar training program students were previously incarcerated, 30% live at the poverty level and 32% have children. The solar market is lucrative, large and growing, but it is competitive. S4A has an extensive competitive advantage to operate in this market thanks to its social purpose, well-trained labor, collaboration with local integrators, and niche solar installation size. Operational Growth Installations are on-going and, after the ramp up first year, continuous. Four installations are planned for 2010 as the infrastructure and fundraising limit capacity. The first round of financing is structured to complete 26 installations of average of 30 kw each. Competitive Analysis Although the market is lucrative, large and growing, it is competitive. Barriers to entry are significant, but attention on green energy, environmental jobs, and financial subsidies draws entrants. This section details direct competition with PPA providers and solar staffing agencies and indirect competition that also limits business. The section concludes with enumeration of S4A s competitive advantage offering a mission driven approach to collaborate with local installers in less pursued market segments. PPA Providers: PPAs are a proven financing tool in the solar industry. This model is increasingly being used largely due to current incentives. According to a Bay Area Sales Manager at SolarCity, 90% of his company s work is completed with PPA-type financing. Solar Staffing Agencies: Because of the shortage of qualified solar installers and the inconsistent labor needs of many integrators, some staffing agencies offer short-term solar installer placement Indirect Competition: In addition to direct competition, S4A indirectly competes with solar providers who sell solar outright and encourage customers to acquire debt financing with bank loans. Some small rooftop wind turbine systems, including Windterra, compete for customers, although they are still challenged by high costs, lower reliability, the need for environmental oversight for bird protection, and complaints regarding noise. Energy efficiency retrofit contractors compete with solar for green building improvements, but these competitors often recommend solar electricity as a complementary investment. Competitive Advantage Social Purpose: As the first organization in the Bay Area focused on making the solar industry more diverse and inclusive, S4A has a lead in building relationships with community organizations, establishing a positive reputation.

5 Well-Trained Labor: S4A works with well-trained roof-ready graduates. Comprehensive support and wraparound services continue for these workers even after placement at solar industry firms. Collaboration with Local Integrators: S4A provides labor and leads to local solar vendors and integrators, complementing their work by providing financing to a sector that would otherwise be unable to go solar. Solar Installation Size: S4A is currently unique in the solar PPA field due to its focus on smaller (~20-80 kw) installations. Few PPA providers are nimble enough to work on these due to lower margins. $Figures in thousands Number of Installs Start Up Capital , ,424.2 Operating Revenue Total Revenue , , Start Up Costs , ,727.2 Operating Expenses Capital Expenses Total Expenses , , Profit and Loss Cumulative P&L