Valuation of a MicroHydroponic Franchise in South Africa: What is in it for Impact Investors?

Paula Lilli Jane Giese

Studenteropgave: Kandidatafhandlinger

Abstrakt

Pervasive world challenges such as the millions of people living below the poverty threshold were demanding a new type of investment that has been grown over recent years. Impact Investments are made with the intention to solve severe societal issues in a financially sustainable manner. Foodpods aims to become one of such investments projects that is capable of improving the life of such less fortunate people. This is why this paper concentrates on proving that with their unique business concept of Micro-Hydroponic Franchises, impressive financial returns and profound impacts will potentially be realized in the future. Working with people from the bottom of the pyramid, certainly entails considerable risk. With high risk the act of finding investors becomes extra challenging, whereas the social projects behind usually are dependent on their funding resources to cover the capital expenses as well as the operational expenses which are crucial in order to guarantee sufficient business development and advisory support. As challenging as the fundraising process might be, as important it is to devote effort to the performance evaluation of such investment projects. Only with thorough analysis and reporting of the performance, Impact Investors can be convinced to get on board. Financial return is usually not to be expected in the social space and makes Foodpods therefore a unique investment opportunity. With a balanced blend of common metrics of the Impact Reporting and Investment Standards (IRIS) as well as with the calculation of a Social Return on Investment (SROI), it will be demonstrated that this investment opportunity actually is mutually beneficial and lucrative. The result of the SROI analysis will demonstrate that the invested money will double in social value terms. In fact, it has been found out that every R1 is creating R2 in benefit for society of disadvantaged communities or promoting Social Franchise throughout South Africa. Future ideas suggest another ground-breaking way of financing the project that promotes scale and replicability. Foodpods plans on granting Impact Investors the novel opportunity to hold and trade an equity based investment. These so called Franchise Licenses give the investor a contractual right to receive a share of the revenue that has been generated by the Franchisee. The results of this thesis prospect that if Foodpods is successfully combining the value-creating capacity of entrepreneurship with the humanitarian mind-set of philanthropy it will certainly drive significant social change in financially sustainable ways and hopefully achieve its goal in becoming South Africa’s largest agricultural incubator.

UddannelserCand.soc.oie Organisational Innovation and Entrepreneurship , (Kandidatuddannelse) Afsluttende afhandling
SprogEngelsk
Udgivelsesdato2016
Antal sider145