The people and process behind Nepal’s largest accelerator programme
Rockstart Impact was introduced to Nepali entrepreneurs back in 2014 by One to Watch, an invest management company and has successfully completed two editions till date and are currently running the third iteration. Rockstart Impact bridges the gap between entrepreneurs and impact investors. They select 10 companies each year from over 200 applicants and strengthen their vision and capabilities along with helping them project their growth realistically for the next five years. As a result, Rockstart Impact can connect local entrepreneurs to international growth capital. In 100 days they receive support from international and local mentors. Together they validate innovative business models and set up basic governance systems, making the companies much more lucrative to impact investors. In the last two years with 20 alumni, 16 have secured investment pledges, raising about 2.5 million Euros in investments.
With Willem Grimminck, founder of One to Watch and Rockstart Impact, along with Simon Mathijssen, Programme Director for Rockstart Impact, we delve into the basics of successfully raising an investment and they share their experiences of working with Nepali entrepreneurs. Mathijssen shares, “In the past two years, we have worked with the most capable and ambitious local entrepreneurs who make serious impact and generate serious profit.” According to him, these entrepreneurs create jobs and innovate markets for basic needs – agri-food, renewable energy, and healthcare. The companies grow in the programme through inputs from the Dutch mentors thus gaining an international perspective and the context of doing a business in Nepal through local mentors. He says, “And with this, we have been successful in the past two editions and are sure about at least seven out of 10 companies raising an investment in the current batch by the end of 2017.”
Grimminck says, “From the experience of being in Nepal, the companies that are over three years old all look like good cases for investment. But once you are halfway through the 100-day programme, you find a patch work of short-term decisions that have been made in the past for it to survive in the first phase. And you need to restructure it to make that one solid foundation for growth.” He further says, “That’s what you face halfway through the programme, you dig really deep into it and you discover all the weaknesses that need to be fixed in the next 50 days to be investment-ready.”
According to him, during the period of a company’s evolution, it goes through all different kinds of direction before it finds its way forward. He shares, “And all the decisions that have been made need to be adjusted to the new line and then we talk about finance, registration, skills of a team, partnership, value proposition, focus on business model and everything else.”
Mathijssen adds, “I feel that very often entrepreneurs think that when they raise investment, they can grow 100 to 200 per cent. But for that, you also need to change your organisational structure, you need to bring in a layer of middle management, and that is difficult in Nepal.” According to him, companies understanding the need for that makes it a lot more professional which allows them to grow over time. He says, “Also, I strongly believe that structure never beats culture. The companies need to think about the company structure and culture that revolves around customers, employees, and partners. Understanding the need for that shows that they are ready to grow.”
On the key factors that one would consider as an investor, Grimminck opines, “Frequently, the companies try to hide their flaws and I feel that is not necessary. As an investor, you would want to be informed about all the risks. There are various hurdles that often knock at an entrepreneurs’ door while they are planning on their growth.” He elaborates, “The ones I feel are successful are the ones with the strongest focus and commitment. It’s not about the school you have been to or the skills you have. All entrepreneurs that have built successful businesses have been committed and focussed. The investors see how they are coping with the risks and challenges and how they survive in a sinking ship and if that ambition is worth investing it in terms of returns and profit, why not?”
First published in The Himalayan Times, 12.02.2017