Part 1: The Beginnings
In 2020, three students came together with a unique goal – setting up an impact fund to give INSEAD MBA students real life impact investing experience. All three MBA’20Ds, Chris Holcroft, Borja Menendez, and Charles Cochin de Billy, were members of INDEVOR, a long-standing INSEAD student organization focused on driving positive social and environmental change. They saw there was a gap in the club, a gap in applying their social impact learnings to startups and venture capital. Chris, like many MBA students, had been exploring different career path options for when he graduated INSEAD. He couldn’t see himself at a philanthropic foundation nor NGO, but he had interned for a social impact VC fund in Mexico before INSEAD and enjoyed it. Investing for good was the at perfect intersection of his skills and interests. Chris knew that many of his peers would also be interested in this space, so the journey began to set up a student impact fund.
The three students surveyed over 300 of their classmates and found that 98% were very interested in joining a student impact fund. The trio then initiated discussions with over 70 key stakeholders across INSEAD’s Europe and Asia campuses as well as reaching out to MBA students at Stanford, Wharton, LBS, and more who had set up their own student impact funds. They needed to figure out the best way to structure the fund financially and operationally with the high turnover of students in a one-year program. With their research collected, the students put together a detailed and convincing pitch deck in true INSEAD MBA fashion. Their mission statement was to “provide a real-life learning opportunity for INSEAD students to invest for good in early-stage social and environmental enterprises.” Students would learn how to source deals, conduct due diligence, measure impact, and manage and support portfolio companies.
The final step in getting the club off the ground was finding the right fund to partner with, and in came Loyal VC. Through the incredible strength and openness of the INSEAD network, Chris, Borja, and Charles were introduced to Loyal, a global venture fund founded by two INSEAD alumni, Kamal Hassan MBA’93D and Michael Kosic MBA’99D. The fund is headquartered in Toronto, Canada with a global team. Their investment philosophy is focused on reducing investment bias and unlocking greater returns across all startup sectors. Loyal has a strong emphasis on entrepreneurial endeavours and jumped at the opportunity to work with INSEAD students to focus on impact startups.
Today, Loyal has 150+ INSEAD alumni investors, 600+ INSEAD alumni advisors, and 200+ INSEAD alumni founded companies in their portfolio. Loyal’s impact theory of change is twofold: the impact-focused startups they fund will add positive impact to the world, but also the education and exposure provided to INSEAD students has the potential to inspire career paths in impact investing. With over a thousand MiMs, MBAs, and GEMBAs attending INSEAD each year, working with Loyal on real investments creates a huge ripple affect across the world. Today, 90% of Loyal’s portfolio companies address one or more of the UN Sustainable Development Goals, including INSEAD alumni founded companies like The Leaf Protein Co., Avant Meats, Boost Capital, and FBB Biomed.
With approval from INSEAD and excitement from Loyal, INSEAD Student Impact Fund (ISIF) was born. The pilot partnership with Loyal kicked off in September 2020, and this September, we are celebrating the fourth anniversary of the student organisation. Chris was clear to share with us that it was just the right place and right time to start this student organisation, but we are still very grateful to Chris, Borja, and Charles for creating a successful and long-lasting student organization that many subsequent classes have benefitted from.
For the future of ISIF, Chris hopes to see the alumni network grow and support each other in this impactful, innovative sector. He emphasised the urgency of the issues at hand, from combating environmental disasters to promoting social equity worldwide – challenges that demand collective effort, particularly from the leaders of tomorrow. Kamal Hassan from Loyal VC also shared that “Loyal is delighted to work with ISIF and we really work with ISIF to support and give back to students. We provide a learning opportunity for students to get real experience in making venture capital decisions during their time at INSEAD.” Through Loyal’s partnership with ISIF, countless students have had the chance to explore an impact-focused sector and make a real impact on the startups that Loyal invests in, and in their future career.
Part 2: The Inner Workings
The primary mission of the INSEAD Student Impact Fund (ISIF) is to foster and support startups that are focused on generating positive social and environmental impact. ISIF closely collaborate with Loyal VC, a global venture capital fund, to evaluate and measure the impact of new investment opportunities. Our partnership with Loyal VC is integral to our operations, allowing us to leverage their expertise and global network. Below we outline the lifecycle of an ISIF deal, detailing our processes for deal sourcing, due diligence, impact assessment, and portfolio management.
ISIF Deal Lifecycle
Deal Sourcing
At ISIF, our deal sourcing process involves inbound interest from startups founded by INSEAD alumni. We aim to evaluate approximately three deals per month who are then considered for initial seed investments of $10,000 from Loyal VC. We present the companies on monthly investment committee calls where we discuss potential investments and make decisions based on the startups' alignment with our impact goals and their financial viability.
Due Diligence
Due Diligence at ISIF is a comprehensive process, particularly for larger follow-on investments ranging from $200,000 to $1 million. This process involves:
Market Dynamics: We thoroughly understand the market in which the startup operates, identifying the problem it addresses, the total market size and growth drivers, and the value chain it operates in. This includes analysing market stability, cyclicality, and key players at each stage of the value chain.
Competitive Analysis: We map the competitive landscape, evaluating direct competitors, substitutes, new entrants, and larger existing corporations. Key competitors and the startup are assessed across various criteria to determine competitive positioning and potential addressable market share.
Business Plans: We scrutinise the startup's business plan, evaluating assumptions related to costs, forecasted revenues, and market share projections. We assess the aggressiveness and feasibility of these assumptions to ensure they align with market realities.
Valuation: Using the business plan figures and insights from our market and competitive analyses, we support in performing the valuations employing multiple approaches (incl. DCF, multiples) leveraging our INSEAD learnings.
We present our findings and recommendations to a panel of seasoned investors during Investment Committee (IC) meetings. These investors typically question, challenge, and ultimately make decisions on the investment.
Impact Assessment
Our Impact Assessment framework is continuously refined to reflect current market trends and best practices. This involves evaluating carbon emissions, air and water pollution, resource use, waste generation, energy consumption, biodiversity impact, and social factors, such as job creation.
We adapt our framework to each startup, assessing key metrics relevant to their sector and operations. Additionally, we identify the positive and negative impacts of our investments in line with the UN Sustainable Development Goals (SDGs). This involves a detailed analysis of how each startup contributes to specific SDGs, ensuring our investments generate meaningful and measurable social and environmental benefits.
Portfolio Management
Effective Portfolio Management is crucial to our and the startup’s success. We support companies in Loyal’s portfolio with strategic projects aligned with the expertise of our team members. In this role, students put on a strategy consulting hat on to challenge assumptions, offer expertise, and ensure that decisions align with our impact objectives.
Strategic problem-solving and opportunity identification are key aspects of portfolio management. For instance, we might tackle challenges related to market entry strategies or operational inefficiencies, leveraging our network and expertise to provide solutions.
Fund Careers and Growth
Careers & Communications
ISIF is committed to fostering career opportunities within the impact investment sector. We develop partnerships with impact investment funds and connect INSEAD students with relevant career opportunities. Working with Loyal VC and other impact-focused venture capital firms will bolster students’ chances of internships and job placements at portfolio companies. It helps students gain practical experience and contribute to impactful ventures.
Events
To increase awareness of ISIF activities and the importance of impact investment, we organize workshops and speaker events across INSEAD’s Asia and Europe campuses. These efforts aim to educate the INSEAD community about the benefits and opportunities in impact investing. We also support club growth initiatives, enhancing recognition both within INSEAD and externally, and promoting the integration of impact investment principles into broader business practices.
The work we do at ISIF in collaboration with Loyal VC exemplifies a comprehensive and strategic approach to impact investing. From deal sourcing and due diligence to impact assessment and portfolio management, our processes are designed to identify and support startups that generate significant social and environmental benefits. Additionally, our commitment to career development and learning opportunities ensures that the next generation of leaders is well-equipped to drive the impact investment sector forward.
Part 3: The Case Studies
After learning about the journey of the INSEAD Social Impact Fund (ISIF), it’s time to feature two INSEAD alumni founded companies that ISIF evaluated and Loyal VC invested in.
Tremau is a technology company that provides Trust & Safety solutions for online platforms. Our mission is to make the internet a safer place for everyone.
Location: Paris, France
Founding Year: 2021
Solution: Tremau offers a range of innovative tools and services that help online platforms improve the effectiveness of their content moderation processes, while mitigating regulatory and operational risks. Our solutions include AI-powered content moderation, user risk assessment, and compliance monitoring.
Founding Story: Tremau is founded by Louis-Victor de Franssu (MBA’18D), Pál Boza (GEMBA’14), and Theos Evgeniou (Professor of Technology and Business). Louis-Victor has a background in digital diplomacy working against illegal content and hate speech. At his one-year INSEAD reunion, he was connected with Professor Theos Evgeniou, Decision Sciences and Technology Management, and Tremau was born. They started out by building a tool that enables transparency and fights against harm towards under-protected groups.
INSEAD Community Support: INSEAD provides a large community of potential partners, clients, and new hires or board members from around the globe with strong background across business. Additionally, Tremau has found support in fundraising via their investment from Loyal VC.
INSEAD Experience: In an interview with Louis-Victor, Co-Founder of Tremau, he shared that he had one goal in coming to INSEAD – to become an investment banker. His roommate convinced him to take an entrepreneurship elective, and now Louis-Victor is an entrepreneur, and his roommate is an investment banker.
Circular Rubber Technologies is enabling infinite reuse of rubber through a sustainable, chemical-free devulcanization process. Circular Rubber’s mission is to positively impact the world by repurposing rubber waste into high-performance products, driving sustainability and reducing environmental harm.
Location: North Vancouver, British Columbia, Canada
Founding Year: 2023
Solution: The company provides a breakthrough solution for the sustainable reuse of rubber materials. Using a proprietary, chemical-free devulcanization process, we transform discarded tires and rubber waste into high-quality raw materials that can be repurposed for new products. Our innovative approach not only reduces landfill waste but also supports a circular economy by enabling infinite reuse of rubber, contributing to a greener, more sustainable future.
Founding Story: While working in Shell’s Projects department, Maartje van der Sande had a turning point when she realised, she wanted to leave a positive, lasting impact on the planet. During a project in Canada, she met Bram van den Berg (MAP'08May) at the Dutch Embassy, where they discovered a shared vision: transforming the vast number of tires in landfills into valuable, reusable materials to promote a greener future. Driven by this goal, they dove deep into the world of tires and rubber products. Together, they identified key pathways to create value through circular economy within the tire and rubber materials.
INSEAD Community Support: Circular Rubber Technologies used the Loyal network and INSEAD network to connect with suppliers, customers, and even in consideration for recruitment. Bram has been in touch with a wide array of people from his time at INSEAD along with more recent graduates and students.
INSEAD Experience: “It has been great experience working with Loyal and ISIF, a very professional investment process and in-depth due diligence asking target questions. Post investment support has also really been super helpful to brainstorm and think about new problematics from different lenses. Maartin really supports the ISIF initiatives where she thinks that all university should create this awareness and practical experience blended in the academic education you get during the MBA. This experience also exposes stude
