Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund (Part 8)

By guest authors Irina Patterson and Candice Arnold

Irina: What other character traits are you looking for in an entrepreneur?

Lewis: I certainly look for somebody who possesses the fundamental, rudimentary business skills and also has the undeniable passion and commitment to the cause that they are trying to be a player in or whatever their stated mission may be.

I think in the impact space, the traditional and fundamental theories of entrepreneurship of iterating and supporting the entrepreneur sometimes get overlooked because people are focusing so much on the cause.

So, we really look for outstanding entrepreneurs who have strong business sense and strong business acumen and understanding of what it is that they’re doing, that they’re choosing to apply that business acumen to the social and environmental space.

Irina: What do you do with the entrepreneurs you don’t accept?

Lewis: Again, this community and the impact investing space is still a relatively small space. There are players in all different roles and arenas, so whenever possible, if it is an organization that I think has some legs and some merit but is not quite to the point where it could seek traditional funding, we certainly look to make introductions and connect them with a lot of the organizations we know in the space, whether they be entrepreneurship incubators for social and environmental businesses or other foundations that do provide donor and grant funding to very early stage initiatives.

We look to make connections and introductions and offer suggestions as much as we can. We invite them to keep working on what they’re doing and tell them not to hesitate circle if they are at a later stage or if something has changed. My opinion is that this space is entirely too nascent to really be biased or nonfacilitating in the growth of institutions, entrepreneurs, funders, and so on because we are looking to create a new sector and a new asset class. The only way that that happens is there being quality entrepreneurs and quality funders.

Irina: Do you have a sector preference?

Lewis: It’s slightly dictated by what we’re looking at. Traditionally, by way of just my background and some of the expertise of our advisory boards and networks, [we] are focused a bit more on microfinance as well what we call adjacencies to finance.

So, different products and services that are targeted at either the customers of microfinance institutions or “graduates” of the microfinance program, so things that are geared toward the base of the pyramid, housing, education, health care, access to finance. Some of those tend to be ones that we take a look at, and a lot of that is because that’s what a lot of our network focuses on. Stepping outside of that, if looking at the delivery of energy or the financing of energy, it’s all centered on similar themes of strong businesses where there might be a significantly untapped potential that with some strong and rigorous business expertise can be capitalized on in a clear fashion.

Irina: How do you feel about technology-based businesses?

Lewis: There is technology that is going into this space. Some of the themes that we see are the delivery and financing of energy, so smaller-scale solar setups and pay-as-you go uses for energy. There are some devices such as solar lamps, things like that.

There’s another side of technology that I think is growing, and we do work with an organization that does this now and would be keen to explore and watch as it develops. This is the mobile banking trend. We are interested in people who are creating the technology components within that sector to effectively deliver mobile payment services to individuals who may not have a bank account or have access to one.

Irina: What are some checks and balances that you have in place?

Lewis: This structure, again, is leveraging the University Fund model and it’s done for a number of different reasons. From our investors’ perspective, there are multiple checks and balances. The students have the ability to do the research, screening, and decision making about whether that’s an investment they would like to pursue. If the students give the opportunity the pass through, it’s presented to an investment committee that comprises seasoned professionals in the venture and private equity community as well as in the impact investing space. So, that’s another layer of checks and balances.

This segment is part 8 in the series : Seed Capital From Angel Investors: Lewis Hower, Executive Director, University Impact Fund
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