Some more BACO-bits of investing knowledge from Acumen

Previously, ThinkChange India posted on the Acumen Fund’s investing strategy. In that post, we pointed out how a major factor in the Fund’s decision-making process is the BACO, or best alternative charitable option.

Due to a comment posted in response to this article,

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Acumen’s Investing Acumen

The Acumen Fund’s blog posted an article going through how this fund is trying to establish criteria for the valuation of social ventures. The article highlights many of the difficulties that the fund faces when trying to create an entirely new investing model yet still remain sustainable financially.

Venture investing, as our investment committee (comprising several members of our board) likes to remind us, is more art than science. Social venture investing takes that art to a whole new level.

Acumen’s starting point appears to be traditional enough as they start at the bottom and build up.

Our analysis always starts at the unit level: what is the product or service? Who are the customers? What are the costs to serve? How do you make money? How do you beat the competition? Any good analysis is clear on the assumptions at the unit level and builds up from there.

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