Investing for Social Benefit

YUNUS SOCIAL BUSINESS INCUBATOR FUNDS

Yunus Social Business | www.yunussb.com

A charity dollar has only one life. A Social Business dollar can be invested over and over again.
PROFESSOR MUHAMMAD YUNUS Nobel Peace Prize Laureate and Chairman of Yunus Social Business

Investing for Social Benefit: Yunus Social Business Incubator Funds

A Message from our Chairman and CEO

OVER THE YEARS, I have been creating
a new kind of business, business to solve human problems, rather than making personal money. I started calling them Social Business. Inclusion of this business into the conceptual framework of the existing Capitalism would create the New Capitalism which we are searching for, a kind that combines the efciency of personal-prot-making businesses with the social goals of NGOs and philanthropists . To my mind, the present day money-centric Capitalism cannot continue. In light of the nancial and many other crises, we need to rethink the fundamentals of our economic system, a system that has failed again and again to address the basic problems of our world, such as poverty, inequality, disease, unemployment, and environmental degradation. This is where Social Business comes in. Whenever I tried to solve a social problem, I created a business to solve that problem. I have created many social businesses in Bangladesh, such as Grameen Danone, Grameen Veolia, BASF Grameen, Grameen Shakti, Grameen Intel, Grameen Green Children Eye Care Hospital, Grameen Caledonian College of Nursing, to name a few. They have proven their effectiveness in solving pressing problems and have grown on their own strengths. The mission of Yunus Social Business Global Initiatives is to spread this success to other parts of the world, via the innovative Incubator Fund concept. We are condent that Social Business will become an attractive option for more and more existing businesses, fund managers, foundations, bilateral and multi-lateral development agencies, social entrepreneurs, governments and philanthropic investors. I hope you will be our partner in this exciting journey towards creating the foundation of a New Capitalism and solving pressing human problems.

MUHAMMAD YUNUS
Peace Nobel Laureate and Chairman, Yunus Social Business

YUNUS SOCIAL BUSINESS was founded to

bridge the gap between Social Business entrepreneurs and Social Investors. We created the Incubator Fund approach in order to target small to medium Social Business entrepreneurs so that they can benet from access to capital and business advice in the same way a normal business start-up would from a business incubator or venture capital fund. At the same time, we offer investors the opportunity to invest in a diversied and carefully selected portfolio of social businesses in our target countries. The

Incubator ensures that these businesses go on to generate maximum social impact. Yunus Social Business is itself a Social Business. Our team of professionalswith experience in consulting, venture capital and international developmentis driven by the same principles as the social businesses we invest in. We pursue social impact rst and foremost, but with the nancial prudence of the private sector. We very much look forward to working with you to take Social Business around the world.
Yunus Social Business | www.yunussb.com

SASKIA BRUYSTEN
Co-Founder and CEO, Yunus Social Business

The private sector has an important role to play. As a primary driver of innovation, investment and job creation, Social Business is well placed to help accelerate progress towards the Millennium Development Goals by the agreed deadline of 2015.
BAN KI MOON, UN Secretary General

What is Social Business?

A SOCIAL BUSINESS is a company created
for social benet rather than private prot. Like an NGO, it has a social or environmental mission, but like a business, it generates its own revenues to cover its costs. Investors may recoup their initial investment, but all further prots are reinvested for growth and innovation, or to seed new social business ventures. In this way, Social Business introduces an additional business model to capitalism where serving society is the sole objective of the company. Since social businesses have to compete in the free market to provide their goods or services, they are efcient and effective at meeting customer needs. Over the last 30 years, Professor Yunus has pioneered more than 60 social businesses in Bangladesh alone some of them are among the largest companies in the country. Today, the concept is broadly acknowledged by the UN, EU, multinational corporations and academic institutions.

Investing for Social Benefit: Yunus Social Business Incubator Funds

PRINCIPLES OF SOCIAL BUSINESS

1.  Goal: To solve social or environmental problems 2.  Financial and economic sustainability 3. Investors repaid; no further private financial return 4.  Profit funds expansion, improvements or seeding other social businesses 5.  Environmentally conscious 6.  Market wages; better working conditions 7.  Do it with joy
Yunus Social Business | www.yunussb.com

YSB Incubator Fund Approach

YSB APPLIES business approaches to
the world of social development. It has developed an innovative Incubator Fund methodology which bridges the gap between social businesses and social investors and donors. While the Incubator searches, coaches and selects social businesses, the Fund provides debt and equity nancing to the businesses after a thorough due diligence process. While a traditional investor invests for nancial gain, a Social Investor invests to benet society. A Social Investors goal is to maximize social return on his or her investment and is thus motivated to support the most effective social businesses. By investing in a Social Business Incubator Fund, the Social Investor benets from standarised annual and semi-annual reports that detail both nancial and social impact performance. The Social Investor will recoup up to the full nominal value of his or her initial investment. All prots from the social businesses are committed to be recycled into new social businesses.

The Social Business Initiative is the first step, but an important one. The Commissions guiding objective is to create the right environment for social businesses to force their growth and development across Europe, to un-tap some of the massive potential that they represent for Europes future prosperity.
JOS MANUEL BARROSO, President, European Commission

How it all Works

DONORS
$ Donated

PHILANTHROPIC INVESTORS
$ Invested

YSB INCUBATOR
Search Advisory Selection

YSB FUND

Equity Loans

SOCIAL BUSINESS

The Fund receives capital from donors and investors. After a thorough due diligence process, the Fund invests this capital into social businesses that have been selected and prepared by the Incubator. As the social businesses pay back the capital, the Fund reinvests it into other social businesses, and/or returns it to philanthropic investors in proportion to their share of the total capital contributed, up to the nominal value of his or her initial investment.

Investing for Social Benefit: Yunus Social Business Incubator Funds

The Incubator
THE INCUBATOR is responsible for
searching and creating social business opportunities and helping the social businesses develop a strong and coherent business plan. It also provides coaching and capacity building to social business entrepreneurs, allowing access to useful networks that help them expand their businesses.

3. Training, Coaching and Capacity Building

Pre- and post-investment, the Incubator continuously seeks to broaden the skill sets and capabilities of its entrepreneurs. This includes personal coaching and courses on topics such as business accounting or technical industry-specic topics. The Incubator is supported by a network of corporate pro-bono partners.

1. Searching and Creating Social Business Opportunities

YSB receives hundreds of social business plans on an annual basis. The Incubator is responsible for screening the plans and moving forward with a handful that demonstrate the highest potential. In order to attract entrepreneurs, the Incubator holds Social Business Plan competitions, public events and workshops.

4. Networks
The Incubator provides access to its local and international networks of potential buyers, partners and experts that lend support to the social businesses.

2. Developing Social Business Plans

Once pre-selected, the Incubator works with the business to improve the social business plan and prepare the business for investment. At this stage, the Incubator will focus on whether the social business will be nancially self-sustainable and determine how to maximize its social impact.

Social Business is a powerful concept at the intersection of the social and business realms. The objective is to apply the professionalism and efficiency of the business world to solving the worlds most pressing social problems. And to do so in a self-sustaining way, providing for choice and personal responsibility for those who benefit from it.
ULRICH VILLIS, European Leader, Social Impact Practice, Boston Consulting Group

Yunus Social Business | www.yunussb.com

The Fund
THE FUND pools capital from donors and
social investors and invests this into a diversied portfolio of social businesses. on the donors circumstances) may make the donor eligible for a tax refund.

Social Investors
A patient capital investment in the Fund will be for a period of approximately 10 years. Funds are provided by social investors in the form of interest-free loans. Such funds will usually be invested into 5 to 10 different social businesses within a period of 12 to 18 months. First repayments from investee companies are expected starting from year 3 onwards and will be distributed back to social investors. It is expected that any social investor loan will be fully repaid within 10 years.

Types of Donors or Social Investors

Social Business creates a common platform for the public sector, the private sector and NGOs to work together on the resolution of social problems This demilitarized zone allows collaboration modes, creativity and a co-creation of solutions which no other modality allows.
EMMANUEL FABER, Co-COO and Vice-Chairman, Danone Group 6

 Corporations  Foundations and NGOs  Governments and development agencies  High net worth individuals

Donors
Donor contributions are used as capital for investment in social businesses and for incubation services. Donated capital contributions are recycled within the Incubator Fund once they have been paid back by the initial investee social businesses. Additional contributions specically earmarked for incubation services are also accepted; these are used to increase the amount of support that the Incubator is able to give to target and investee social businesses. In all cases, the donor will receive a certicate which (depending

Incubation Services Fee (ISF)

The Fund draws an annual management fee of 6 percent on contributed capital to support social businesses to fund the intensive business support services offered by the local Incubator Fund to the entrepreneurs. These can include business plan advisory, legal and accounting support and loan structuring.

Investing for Social Benefit: Yunus Social Business Incubator Funds

Investor Reporting and Impact Measurement

INVESTORS AND DONORS in our Incubator Funds will receive standarised reporting throughout the year. Our entrepreneurs adhere to the following reporting standards:
 Monthly: Focus on financial KPIs  Quarterly: Focus on financial and social KPIs  Annually: Focus on financial and social KPIs as well as budget setting

The information from the entrepreneurs allows us to prepare two reports to our investors every year:
 Semi-annual update  Detailed annual report

Three Pillars of Impact Measurement at YSB

FOCUS 1. Individual Social Business 2. Social Business Sector 3. Social Business Concept APPROACH Outcome Indicators Stakeholder Survey Entrepreneurial Survey

GOAL

To measure the output and outcomes in the community directly impacted by the business.

To aggregate across certain stakeholder groups the perceived impact resulting from our social businesses.

To understand the perceived impact of the Social Business model from all social business entrepreneurs.

HOW

Monthly, quarterly and annual self-reporting from entrepreneurs on quantitative KPIs such as number of students, income generation, etc.

Paper-based and online surveys on perceived impact for key stakeholders such as students, community leaders, etc.

Annual self-reporting from entrepreneurs on awareness of the social problem, business success, idea adoption, etc.

Yunus Social Business | www.yunussb.com

Our Team
MUHAMMAD YUNUS
Peace Nobel Laureate and Chairman, Yunus Social Business

SASKIA BRUYSTEN
CEO and Co-Founder

SOPHIE EISENMANN
CFO and Co-Founder

DANIEL NOWACK
Program Director, Albania

KAREN HITSCHKE
Director, Funds and Investments

CLAUDINE FRANCOIS
Country Director, Haiti

SHKELZEN MARKU
Country Director, Albania

FARES MABROUK
Country Director, Tunisia

SYLVAIN FERRIERE
Program Director, Tunisia and Uganda

ROGERIO OLIVEIRA
Country Director, Brazil

Investing for Social Benefit: Yunus Social Business Incubator Funds

PROFESSOR MUHAMMAD YUNUS, CHAIRMAN: Pioneer of both Micronance and Social Business, Professor Yunus founded the Grameen Bank in Bangladesh in 1983, which now boasts more than 8.4 million mostly female borrowers. Professor Yunus has founded more than 60 social businesses in Bangladesh alone, some in collaboration with international corporations such as Danone, Veolia, Intel, Uniqlo and BASF. Other successful social businesses include Grameen Shakti, Grameen Caledonian Nursing College and Grameen Green Children Eye Care Hospital. He works tirelessly to advance the Social Business Movement across the world. SASKIA BRUYSTEN, CEO AND CO-FOUNDER: A leader in the Social Business Movement, Saskia was Co-CEO of Grameen Creative Lab prior to founding YSB. She started her career at the Boston Consulting Group in Munich and New York. She was appointed to the EU Commissions expert group on Social Business and has assisted Professor Yunus on UN Secretary General Ban Ki-Moons MDG Advocacy Group. She holds an MBA from the European Business School, Germany and a MSc in International Relations from the London School of Economics. SOPHIE EISENMANN, CFO AND CO-FOUNDER: An expert at creating Social Business Funds and executing investments into social businesses, Sophie was the Director of the Grameen Creative Lab for which she was responsible for setting up country initiatives in Haiti, Colombia and Albania. Previously, Sophie worked for Siemens Management Consulting in Munich as well as GE Capital in London, Amsterdam and Munich. She holds an MBA from the European Business School, Germany and a MBA in International Business from INSEAD. DANIEL NOWACK, PROGRAM DIRECTOR, ALBANIA: Daniel is responsible for heading YSBs activities in Albania. Prior to YSB, Daniel served as Finance Director for a startup incubator. Before that, he was Project Manager at the Grameen Creative Lab, where he oversaw partnerships with corporations and non-prot organizations. Daniel started his career at Merck & Co. as Senior Financial Analyst for Europe and Emerging Markets. He holds a Diploma from University of Cooperative Studies Stuttgart and a Bachelor from Glamorgan Business School, Wales. KAREN HITSCHKE, DIRECTOR, FUNDS AND INVESTMENTS: Karen has extensive expertise and experience in fund structuring, investment processes and fundraising. Prior to YSB, she was the Chief Financial Ofcer at Affectis AG and an advisor to B-to-V (Business Angel Network) in Switzerland. Before that, Karen was an Investment Manager at Apax Partners and a consultant at McKinsey & Co. She holds an MBA from INSEAD, Fontainebleau, and a M.Sc. in Biology from the University of Constance.

CLAUDINE FRANCOIS, COUNTRY DIRECTOR, HAITI: Claudine was born in Haiti. She holds a degree in Business Administration and Accounting, with experience working and living in the US, Africa and Haiti. Prior to YSB, she was a senior accounting professional with demonstrated expertise in General Accounting, Internal Audit, Budgeting and Human Resources Management functions. She served in different private sector and humanitarian clusters in Haiti with 18 years of experience collaborating with senior management and conducting Human Resources strategic planning in order to support and further corporate goals. SHKELZEN MARKU, COUNTRY DIRECTOR, ALBANIA: Shkelzen
heads YSBs activities in Albania. Prior to YSB, Shkelzen was Executive Director of the Mountain area Development Agency (MADA). He also worked as a Director General of Agriculture and Rural Development Policies in the Ministry of Agriculture in Albania. He is a co-founder and president of the Partnership for Development Foundation, and a visiting professor at the Economic and Agribusiness Faculty of the Agriculture University of Tirana and the Economic Faculty of the European University of Tirana.

FARES MABROUK, COUNTRY DIRECTOR, TUNISIA: Fares is responsible

for YSBs operations in Tunisia. Prior to joining YSB, Fares worked at the Arab Policy Institute, a Tunis-based think tank, dedicated to the development and promotion of innovative policy solutions and reforms. Fares previously ran a number of SMEs based in North Africa, focused on mobile banking and oil logistics. Fares is a visiting professor at Sciences-Po Paris. In 2010, he was selected as a Yale World Fellow. He obtained a Masters Degree in Public Administration from Harvard Kennedy School. Prior to that, he graduated in Economics and Statistics from the Ecole Nationale de la Statistique et de ladministration Economique, Paris.

SYLVAIN FERRIERE, PROGRAM DIRECTOR, TUNISIA AND UGANDA:

Sylvain is responsible for heading YSBs activities in Africa. Prior to YSB, Sylvain worked in Argentina for Endeavor, an NGO dedicated to identifying and supporting highimpact entrepreneurs, as a consultant, and then as General Manager of one of the Endeavor entrepreneurs, a fashion design business. Previously, he was a consultant for the Boston Consulting Group in Paris. Sylvain holds a M.Sc. in Mathematics form Imperial College in London and an M.Sc. in Management from HEC in Paris.

ROGERIO OLIVEIRA, COUNTRY DIRECTOR, BRAZIL: Rogrio has 12 years of experience leading teams in areas of product development, business units implementation and enterprise start-ups within companies such as Warner Bros, Johnson & Johnson, Nestle, UOL and BRMALLS. He is the founder of Movimento Buena Ondaan accelerator for social businesses focused on creating happiness, social or environmental impact. Rogrio holds an MBA from HEC Montreal and teaches at Perestroika, a Brazilian innovation school.
Yunus Social Business | www.yunussb.com

How to Invest
ARE YOU INTERESTED in supporting
YSB Incubator Funds as an Investor or a Donor? You can support us by:  Investing in one of our country funds or in our umbrella organization in Germany  Support through capacity building We can provide you with further information for each of our country specic Incubator Funds and our worldwide activities.

Our Contact Information:

Please contact us at info@yunussb.com. Yunus Social Business Global Initiatives Niddastrae 63 60329 Frankfurt, Germany Tel: +49 69 90559030

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Investing for Social Benefit: Yunus Social Business Incubator Funds

YUNUS SOCIAL BUSINESS searches, develops and invests in high-impact social businesses through its own Incubator Funds.

YUNUS SOCIAL BUSINESS GLOBAL INITIATIVES Niddastrae 63 60329 Frankfurt, Germany

EMAIL: info@yunussb.com WEB: www.yunussb.com TEL:

+49 69 90559030