Today we announced Hub Venture Labs (HVL) – a partnership with Hub Westminster. I'd always envisaged Merism Capital as a seed fund and incubator, but originally 'incubator' was shorthand for being a hands-on investor where we would manage our portfolio and stretch the cash we'd be investing.
That was before I met Bob and Ross from Gray Ghost Ventures, who as well as validating our investment model (impact investing has a four or five year track record in the US) also told me about their incubator programme: Village Capital which is running in the US and India.
Partnering with Village Capital not only meant that we'd work with a proven model, but gave us a chance to do something far more ambitious. There is a real need to equip social entrepreneurs with skills to increase their chances of success. While most of those I meet don't lack ambition, they do lack the expertise to attract investment and scale up their startups: both are key commercial skills that need to be embedded in any business (including not-for-profit).
So I devised a plan to run a year round permanent incubator dedicated to social entrepreneurs where - in addition to Village Capital - we'd run shorter programmes, mentor sessions, weekly office hours and drop-ins. The common theme would be to provide the insight and support that social entrepreneurs need.
But there's another dimension – investing is about relationships: its symbiotic between investors and entrepreneurs who also need to build peer support networks for validation and collaboration. So our incubator, with multiple programmes, would offer a fascinating environment where over the course of a year we could put together 200-300 entrepreneurs with different skills and abilities with mentors and investors.
One problem: Merism Capital's core business was and still is being an investor and we had no space of our own in which to house this.
With Hub Westminster we are fortunate to have found a partner with a proven business model and experience of hosting and creating an inspiring space. The Hub's success in building networks both locally and globally provide exciting opportunities and we quickly shared a vision to build HVL into something that would be encouraging and challenging, somewhere where we would construct a destination incubator around Village Capital that both entrepreneurs and investors aspired to.
HVL will offer a range of incubator programmes from four- to twelve week courses, with some having investment prizes. Pitching will be an integral part of all programmes; from the initial application process through to investor days, entrepreneurs will tune their plans and practice how to sell their visions. We'll help entrepreneurs to think like investors and vice versa. I believe there's a need to expand the number of impact investors. Peer networking will be a constant, facilitated by Hub Westminster's ability to create a collaborative environment for the participants. We'll leverage the Hub's global network by running video sessions with other Hubs and utilising remote resources. Village Capital, the first one to be held in Europe, will be at the centre of HVL's launch programme. The 12-week incubator programme will provide two peer-selected £50,000 investments for the two most promising social startups.
We're already discussing running 'themed' programmes for individual investors and others that will target specific sectors and groups of entrepreneurs. Our medium term plan is to create a separate HVL fund that will provide follow-on funding for participants as a principal and co-investor.
How will we measure success? We're designing systems to collect data from initial applications through to tracking participants' future investments and jobs created with HVL's support. These metrics, along with our direct engagement with hundreds of social entrepreneurs, will provide deep insight into the progress of impact investing in this country.
Stephen Rockman is founder of Merism Capital
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