Educational Objectives

As impact investing has emerged as a new, fast-growing category of private investing, so too has the awareness of the stark disparity between access to capital among small business owners. The educational objective of the field course is to understand why certain business founders lack access to capital and work to understand whether and how small investments of $25,000 to $50,000 (made from an intermediary partner) might help these businesses grow. Specifically, the field course will seek to focus on three things:

• To provide hands-on experiential learning in thinking about the financial, commercial, impact and operational diligence of small businesses, as well as to provide hands-on experience with the investment process, from working with founders, negotiating with co-investors, engaging advisors to presenting to an investment committee and moving into the mechanics closing an investment.
• To understand the barriers in access to capital (financial, social and human) that have historically hindered growth small businesses led by under-represented founders in the Boston region, and nationally
• To increase familiarity with and collaboration among HBS students and businesses in communities in and around Boston that they might not otherwise be familiar with.

Course Content and Organization

The course primarily involves teams of 4-5 students conducting investment diligence on small businesses who are looking for flexible capital to scale their businesses. In partnership with a number of Boston-area intermediaries (e.g. Boston Impact Initiative, Foundation for Business Equity, LEAF, Mill City Community Investments, and Visible Hands), teams will work to understand and make the investment case for the business to be made to an alumni investment committee and/or to an intermediary partner’s fund. Students may also provide advisory support for companies that have been supported with investments in prior years.

Course Requirements and Grading

The final deliverables will be a due diligence plan to assess the business from a commercial, operational and impact perspective; a final investment memo that summarizes the diligence and recommends an investment (or not); a financial model that is the basis for informing the investment decision; and an impact plan that outlines how the business will deliver impact. The course grade will have the following components:

• Interim Diligence Deliverables: 20%
• Investment Memo (with financial model and impact plan): 40% + Investment Committee Presentation: 10%
• Class Participation: 30%

Pre-Requisites

None

Cross-Registrants/Auditors

The course is open to MBAs and Kennedy School of Government students enrolled in a joint MBA program.

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