The world is facing a multi-crisis environment that could persist for the foreseeable future. But instead of being overwhelmed by pessimism, entrepreneurs seek creative methods to resolve the environmental, social and economic issues posing obstacles to society at large.
Impact entrepreneurship, as it is known, is one of the “most meaningful” ways through which scalable solutions can be attained to solve some of these challenges, says EQT Foundation CEO Cilia Indahl.
“At the Foundation, we believe that entrepreneurship can be a key driving force in helping to solve some of the pressing challenges our world is facing today,” she says in an interview with The Edge Singapore.
The EQT Foundation was established in 2019 to act as a long-term shareholder of global investment firm EQT and to house its global philanthropic activities. EQT Foundation provides “patient risk capital” to entrepreneurs building a cleaner and more inclusive future while supporting research projects accelerating the shift to impact economies.
Indahl adds: “Entrepreneurship is a central part of our DNA as private equity investors. To us, entrepreneurship means constantly looking for what’s behind the curve and breaking new ground. But it’s also about accountability and standing up for your own ideas. As entrepreneurs, we take risks, persevere through challenges and learn from our mistakes to succeed in the long run.”
Given EQT’s emphasis on the values of entrepreneurial spirit and its thematic investment expertise, its recently unveiled EQT Impact Challenge for the Southeast Asian region hopes to further the notion that being a profitable business and having a positive impact on the future is not a zero-sum game.
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“We believe doing good is good business; it’s not an either-or proposition. We are confident that companies driven by an ambition to make a positive impact while embracing sustainability at its core will be more valuable over time,” says Indahl.
Accessing patient capital
Considering the physical implementation often required for impact entrepreneurship, she notes that one of its key challenges is gaining access to patient, catalytic capital from investors. “As we know, it takes longer to scale ideas and build infrastructure in the physical world. We need investors willing to get in early and take a massive risk to support these entrepreneurs long-term.”
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While these start-ups may still be in their nascent stages and not yet possess a proven track record, it is critical that they can present compelling cases to investors by enabling recognition of both the potential value creation for society and the promising equity narrative in the long run.
Indahl adds: “That’s exactly where we are placed in the market as a foundation. We want to help start-ups attract mainstream capital because we believe that’s how these companies will grow in impacting society positively and show financial returns.”
Entrepreneurs' impact potential is a key aspect evaluated by investors in the impact investing space. Aside from the aspirational objective of making a social impact, investors are understandably focused on whether a start-up can scale its business model and achieve financial returns and growth. “A sound business growth plan directly correlates with the benefits it can deliver to society,” she says.
While Indahl acknowledges that there is certainly a “hype” around impact entrepreneurship, the type of entrepreneur EQT seeks to support goes beyond current trends by being deeply committed to its mission. “When new areas of growth emerge, we need to be sure of their integrity,” she explains. “While many of these ideas are new, disruptive and theoretically possible, we need to use our experts to understand if they are feasible at scale.”
Leveraging expertise
With all of the new technology and “promises” within the space, impact entrepreneurship is an area that the EQT Foundation is excited to get behind. For Indahl, the EQT Impact Challenge offers a fantastic opportunity for entrepreneurs and start-ups to showcase their breakthrough innovations and impact potential. “We want these start-ups to succeed and want to give the chance for the start-ups to pitch their solutions and make lasting connections,” she says.
The EQT Impact Challenge, organised in partnership with business publication The Edge Singapore and Asia’s largest tech media platform E27, will be a platform for early-stage start-ups to showcase their business acumen and stand a chance to win an investment from the EQT Foundation and the opportunity to tap into EQT’s extensive expertise and network.
The challenge goes beyond a traditional pitch competition by bringing as much value to the start-ups that participate as possible. The top five start-ups selected will receive additional expert pitch training to help tailor their pitches for the grand finale to create lasting skills critical throughout their fundraising journeys.
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Leading up to the final pitch, Indahl adds that EQT will train the entrepreneurs on investor readiness. “Part of the programme after the challenges will identify the key areas in which start–ups can benefit most from investor support. It’s about coming together with management and deciding how your full potential looks and how EQT can help you reach that full potential through a concrete, tangible plan.”
EQT will also conduct a “gap analysis” to ensure that it injects the right expertise to assist with the realisation of the start-ups’ objectives. The competition’s eventual winner will gain access to EQT’s expert support from its 1,800 employees to back their growth through the investment firm’s extensive network and in-depth expertise. EQT’s large portfolio of around 300 companies at various stages in their growth and development journeys will also undoubtedly provide the winner with a wealth of resources to build from.
With EQT’s expertise in emerging fields, including climate technologies, inclusion of access to healthcare, education and career opportunities, start-ups and entrepreneurs with breakthrough solutions or innovations in these areas would be well-placed to apply for the EQT Impact Challenge.
The competition is focusing its search for start-ups and entrepreneurs operating in the Planet — climate and nature — and Humanity — health and equity — spaces who have the potential to create a significant positive impact in the future by leveraging EQT’s portfolio and scaling upwards successfully.
Says Indahl: “I believe that a successful application should highlight the importance and uniqueness of your solution, explain what thematic trends we need to believe in for your solution to scale, and how your solution will have a positive impact on either the planet or humanity."
For more information on the EQT Impact Challenge, visit https://e27.co/eqt-impact-challenge/
Application period: Sept 12 to Oct 15
