1）Project name: Yu Venture Philanthropy
2）Investment target
There will be 1 winning SE receiving an investment of RMB one million in total.
3）Investment principles
Philanthropic fund can be leveraged to produce a bigger social impact.
Venture philanthropy helps Chinese high-potential social enterprises to scale up with both angle funding and hands-on consultancy. All returns from investment will be reinvested on SEs.
The scale of Yu's investment is RMB one million, mainly in the form of equity and loan.
Loan: The rate will be below market interest rate
Equity: Yu normally holds share below 30%, at the same time, Yu will get involved in management through taking a seat on the board and consultancy.
4）Investment process
The investment will be made upon completion of business negotiation and agreement of objective and key issues.
5）Exit option
The investment period is 5-7 years, expected to exit by SE management buy-back or equity transfer to other funds.
6) Focus area
No specific focus areas
7) Selection criteria
a) Clear social mission
b) Measurable social impact
c) Sustainable business model
d) Reasonable capital exit mechanism
8) In-depth communication and resources matching
The list of applicants entering the phase of in-depth communication and resources matching will be announced in December 2015 and investors will provide in-depth communication with different duration and consulting services to their applicants from January to February 2015.
The mentoring team of Yu Venture Philanthropy will provide the consulting service of 48 hours in total to its applicants selected from the Fair for Social Investment within two months.
9) Advantage and successful investment cases
Yu has Mr. Xu Yongguang heading the Strategy Committee, and a professional team experienced in evaluation and consulting led by ex-BCG consultants.
A systematic intervention with capital, operation and management consulting, and resource input to help SE improve management effectiveness and scale up
Investment case (I): Golden Wings
Golden Wings uses art therapy to improve the life quality of special children, helping them to pursue aspirations of art and realize their values to society. Golden Wings also sells the paintings created by these kids, in the form of calendars, post-cards and other printings. After a year of incubation, Yu invested RMB 500,000 yuan in the form of equity in September, 2012.
Post-investment progress
Social impact
Beneficiary: 75 children received training in 2013, a huge increase from 30 in 2011
Children receiving cash benefit: Among the 75 students in 2013, 43% had their work turned into commercial products; they received an average cash benefit of RMB 3,800 yuan, which was 2.5 times than the amount that students received in 2011
Financial impact
Revenue: Total revenue in 2013 was RMB1.7 million, a 160% increase from 2011
Investment case (II): Xixiang Women’s Development Association
Xixiang provides trainings and microfinance to underprivileged women in Xixiang County, Shaanxi Province. Their mission is to empower local women and help them live an independent and respectful life. After a year of incubation, Yu invested RMB 2 million yuan in the form of convertible in 2012 (expected to convert to equity upon establishment of the microfinance company in December, 2014).
Post-investment progress
Social impact
The accumulated number of direct beneficiaries reached 11,280 in 2013, a 40% increase from 2011
Year-end outstanding loan was RMB 13 million, a 106% increase from 2011
Financial impact
Revenue: Total revenue in 2013 was nearly RMB 2 million, a 139% increase from 2011
