Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund (Part 3)

By guest authors Irina Patterson and Candice Arnold

Lewis: Going forward, our model is that we will continue to have students.

We are a student program and will be for as long as we’re around. We do that same type of project work but typically we will end up working more with the investment funds and foundations and high net worth individuals who are making investments in the impact investment space.

We provide our services on a pro bono basis with the understanding and agreement that if that organization ends up funding and investment and we like that investment, we will have the ability to co-invest alongside that organization.

That model, again, is the same model that the University Venture Fund uses,  our sister fund – if you will – has proven to be a very successful and unique model in that it is real time investing.

There are LP’s in the fund looking for market rate returns. The great thing about the model is that because there is value add work that we do, we are able to invest alongside some of the top funds and names in the space.

Irina: Can you name some funds that you work with?

Lewis: We’re currently working with a group called First Light Capital,  we’re working with an organization called the Peery Foundation, we’re working with an organization called Elevar Capital, and then some other pockets of groups of family offices and high net worth individuals. Those are all on the funding side.

On the entrepreneur side, we’re working with an organization called Waste Ventures, which is a waste picker cooperative based in India that employs the ultra poor to be waste collectors and give them a revenue stream from composting and recycling the waste that they collect.

We’re working with an organization that is building mobile payment networks in Africa, a handful of others as well.

Irina: What is the geographical focus of your work?

Lewis: Right now we have a global focus. Because of the nature of the space and the nature of our relationships and opportunities, there’s a little bit more of a heavy weight on Southeast Asia as well as both domestic here in the U.S. with a handful of projects in Africa.

Going forward, the nice thing about our model in partnering and working alongside existing funds, we can [have] a little bit more of a broader global approach because we really do rely on the partnerships and strength of the relationships with these top performing funds.

Irina: So, your partner firms are sending you the deals?

Lewis: Yes. It’s a little bit of a two-way street but, yes, predominantly deals come from both our own networking and working with the entrepreneurs but then predominantly with the partner funds when they have specific deals that they’re looking at and they need assistance on some element of due diligence. That then becomes something that we would consider.

Irina: What are the deal sources within your own network?

Lewis: We currently are working with a couple of social entrepreneur incubators. One’s called Spark Seed and the other one is called the Unreasonable Institute.

There’re some others that exist that really are focused on developing top tier social entrepreneurs so we provide them and their entrepreneurs with some of these same services that we provide and that then becomes an excellent source of deals for us.

And then also through friendly recommendations – you know we are a pretty unique program in that we have the educational aspect but we also provide very high quality services at low to no cost. Especially in this space, word travels pretty fast that there’s an organization that can provide quality work for low cost and that, thankfully, does a good job of getting our name out there.

Irina: Give me an example of a service you provide for a low cost fee.

Lewis: Actually, currently we do not charge any fees. Again, it’s all kind of with the understanding and agreement if it is an entrepreneur and we’re providing service and assistance for them, that in the future when we do have a fund or if we determine that we want to see them develop for a few more years, at some point down the road we would have some ability to invest in them.

And that goes for the other side, the funders as well. But the beauty, again, is because the majority of our staff are university students, we are able to provide these services for free.

This segment is part 3 in the series : Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund
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