IRMA Incubation Centre

1. IRMA Incubation Centre Social Enterprise Incubator 24th January 2014 CONFIDENTIAL This vision documenthas been produced by Sanjay Sethi for discussion with IRMA Alumni

2. Background • There is an opportunity in Indian Industry to grow new futuristic organisations in social sector, which are profitable too. • IRMA was created to support farmers through cooperatives and NGOs • Over time, IRMA has started supporting certain social enterprises which are ‘for profit’ companies but have similar impact on improvement in the quality of life of farmers and poor people • There is an urgent need to bring IRMA back to original rankings in the B School Surveys. IRMA Alumni is a major stake holder in this and would like to contribute in ongoing brand building for IRMA • Alumni can mentor students and new enterprises, an area which was done informally earlier can now be formalized through a start up incubator • Many Alumni would like to take a sabbatical and contribute towards up skilling themselves by associating with IRMA and supporting Nation Building initiatives • Alumni also have investible surplus funds which they may like to invest in a sector they understand best • It is generally considered that any money lent to an IRMAn by an IRMAn is safe and is returned with thanks because IRMA Alumni is a small community and everyone knows each other • Very soon Alumni will start retiring from their jobs and would look for opportunities to continue to keep themselves lightly occupied in advisory roles • All above point towards an opportunity which we discuss here in the following pages

3. Generational Opportunity • PROBLEM DEFINITION & DEMAND • A very fast growth in the social enterprise sector Inefficient agribusiness • Increasing prosperity leading to higher consumption Low Cold Chain adoption • Higher demand for processed foods Record high food prices • Opportunity for technology transformation Thriving modern trade • Inadequate government policies Poor Power Supply from Grid

4. What constitutes a social enterprise 1. Any business which has a direct or indirect impact on improving the quality of life of a common man is a social enterprise 2. Agribusiness and Food Industry 3. Industries supplying to agribusiness and food industry 4. Infrastructure to improve the quality of life of a common man 5. Any initiative, financial activity, research or teaching to improve the quality of life of a common man 6. Healthcare 7. Rural Business 8. Business which improves the life of rural people including rural tourism 9. Business which improves the environment and ecological balance 10. Projects of national importance like Railways, SEZs and Ports 11. A business which creates jobs for the common man 12. All above done in an ethical, moral and sustainable way

5. What Needs to be Done • As IRMA Alumni, some of us may consider investing Rs. 1 Lakh each to set up an incubation center for supporting start up companies in social sector or in agri business sector • The funded companies will employ people beyond IRMA graduates • A focus area like Kashmir may be chosen to improve the quality of life of people as well as supporting to improve the environment which encourages trade and indirectly discourages terrorism • Such a fund can be run independently by the Alumni who are interested to invest in it. However more investment will be sought from investors outside IRMA network • Future alumni may be included in it who qualify the criteria set by the incubation center • Alumni can support the start up companies by charging the investee companies a nominal fee • Similarly IRMA may offer its support to such companies as it would offer to its other clients • Shares issued by IRMA Incubation Center (IIC) can be transferred or bought back like any other Limited Liability Company • IIC Board would constitute eminent IRMA Alumni and some Non Alumni from private sector and social enterprise sector • IIC will also raise debt for its investee companies. Money invested will be guaranteed by the investee company • Stake holders would be from IRMA as well as others who agree to the objectives, so that sufficient diversity is maintained, like a true venture capital firm • Care must be taken not the forget the objective of supporting the social enterprise sector while the method may become flexible as going gets tougher

6. Roles • Investors Those who will contribute will be the owners of the incubator and will be entitled to upside in the valuation of their investment in the investee companies. Investors will also give free mentoring to the start ups and perform other roles at no cost • IRMAns IRMAns who chose not to invest in the IIC can also register for the mentorship program. They will be paid an honorarium by the investee companies for the time invested by them in mentoring the companies. If they so desire, they may directly invest in such companies or lend to them. They can take periodic breaks from their regular career for these social enterprises and can contribute towards their success. However they will always be paid an honorarium for all their support so that contribution is properly measured • IRMA IRMA gets an opportunity to conduct research in these organizations and can provide them initial logistical support at nominal charges. Since these social enterprises fit perfectly in IRMA’s objectives, IRMA can accord them high priority. IRMA can play the role of knowledge center for these units. Most such units would actually come up because IRMA would have listed the priority areas. Students would not only get to do projects, but they may also chose to join or start these start ups. All the three sides can work in cohesion and through this collaborative approach create tremendous value for all stake holders and help in achieving Millennium Development Goals through some help from social enterprises

7. Conclusion • IRMA Incubation Center would help IRMA students and Alumni to start new companies and yet have diverse experience by bringing partners from outside IRMA • Over time such an impact investment would create big companies focusing on the social sector • The end objective of improving the quality of life of people would be achieved through such an initiative • IIC would go beyond the boundaries of India and would also support the needy in other continents like Africa • Such an incubation center would become a reservoir of knowledge of practicing what IRMA teaches • Leaders grown through this process would have a great affinity towards each other and would provide the required cooperation to each other • Such an incubation center would prepare IRMA to step into this newer sector which would provide support to IRMA in return • It will facilitate interaction between IRMA, Alumni and Student on an ongoing basis • It will let the outside world appreciate the value of IRMA and IRMA Alumni by allowing them to work alongside • A network of such companies would have a big impact on policy makers to support such initiatives elsewhere and thus would bring a revolution in social, rural and agribusiness sector

8. While the future is impossible to predict, you can count on one thing: social enterprises will always thrive

9. Thank You ! Sanjay Sethi sethi100@gmail.com Cell: +971563124677; +919004777119; +254732040000