The Impact Hub-IEF Partnership

Impact Hub is a rapidly expanding global network of more than 16,000 social innovators. Our 90+ locations on five continents host a diverse community of entrepreneurs, practitioners, investors, and organizations; offer collaborative working and meeting space; and provide a variety of incubation and acceleration programs to drive entrepreneurial action for a more just and sustainable world. All Impact Hubs are initiated, developed, and run by local teams. They are both deeply rooted in their local markets and communities as well as globally connected through platforms like Impact Hub Passport and enabled to scale solutions worldwide.

Impact Hub has been present in developing and emerging economies since the opening of Impact Hub Sao Paulo in 2008. In the past nine years, we have run several successful seed programs and have been steadily growing our membership throughout Central and South America, Asia, and Africa. As an example, Impact Hub Yangon in Myanmar joined the network in November 2016 and is already planning their programmatic activities as well as attending regional gatherings to strengthen their impact. At the same time, Impact Hub Accra in Ghana is about to celebrate its two-year anniversary and has organized incredible incubation programs for a constantly growing community after expanding their space and team.

Equipped with knowledge on how to establish thriving startup ecosystems in challenging contexts, Impact Hub is now looking forward to fostering entrepreneurship across India with IEF and finding passionate entrepreneurs to join our network.

IEF works to empower and energize the countless small-scale entrepreneurs conducting business in India. It is one of the leading Indian organizations in providing learning and development tools, hard- and soft-skill development programs, and networking and showcase platforms for local entrepreneurs and small and mid-size businesses.

“Enterprise creation is not a solitary activity. It needs a community that supports the growth and success of the enterprise and the entrepreneurs who dream it,” said Bhairavi Jani, Chairperson, IEF Entrepreneurship Foundation. “We see our collaboration with Impact Hub as an opportunity to build a local support system for entrepreneurs in India’s small towns and large metros alike. Our hope is to facilitate and mentor a community across India that is connected to a network of knowledge and enterprises across the globe, led by the entrepreneurs themselves.”

IEF Entrepreneurship Foundation and Impact Hub have partnered to support the development of sustainable Impact Hubs in India. Initially the focus will be developing two hubs, one in a large metro and another is a small tier 2 city. They will be the first locations in the country since Impact Hub’s major rebranding effort in 2013, welcoming a key market into our global network and a valuable contribution to local entrepreneurial ecosystems and individual entrepreneurs.

IEF and Impact Hub are currently working to identify teams of local entrepreneurs interested in bringing Impact Hubs to large metro cities in India, such as New Delhi, Gurugram, and Pune, as well as smaller tier 2 towns such as Gangtok, Rajkot and Guntur. Selected teams will begin an Impact Hub onboarding process, throughout which they will receive dedicated support from seasoned co-founders and various other experts within the network. In the initial phase of the onboarding process, so called Pre-Candidate phase, IEF will have initial conversation with interested teams, assess the team’s ability to open an Impact Hub in the respective city and provide feedback to the teams. However, the formal application process and the final whether a team starts the onboarding process will remain in the hands of Impact Hub.

Upon approval as Impact Hub Candidates, IEF will facilitate connections with mentors, angel investors, and potential partners to help each founding team establish relevant learning and acceleration programs, attract member entrepreneurs, improve management, and ensure sustainable development. Once both teams have successfully completed the onboarding process and become official Impact Hubs, several opportunities for collaboration between IEF and Impact Hub have been identified for further development and exploration.

The onboarding process is a step-by-step approach to integrating new teams in the Impact Hub global network. This practice was designed to bring Impact Hub founders up to date with the basics of successfully running their business before becoming operational. Founders receive experienced support from within the community, can access resources and feel more confident about making their business model work. Besides this, the onboarding process serves as a guarantee that only teams capable of genuinely recreating the Impact Hub experience are integrated into the network.

Our onboarding process is overseen by our Network Growth specialists, and counts on the active participation of selected representatives of our Network, who enthusiastically devote their time and experience to collaborate with the new teams’ development and engagement. After applying in our website to become an Impact Hub Pre-Candidate, the new teams have to go through the following milestones of the onboarding process:

• Pre-Candidate Stage: lasting between 3-6 months, this is the first step for a new team to truly realize its vision. In this stage, the team will have to show that it’s up for the long journey ahead.
• Candidate: lasting over a six-month period, the team will prove that its vision is feasible and that it really has what it takes to bring an Impact Hub to its city.
• Initiative: Lasting up to 18 months, the team in the Initiative stage needs to find a space, raise money, build a community, and, finally, open.
• Up & Running: The team has made it! It’s time for some serious impact.

The Pre-Candidate stage has an intense focus on team structuring, local market knowledge, community sensing, and, above all, on the contribution of our specialists to the onboarding process. Both our Growth Team and our Onboarding Coaches, due to their broad expertise, take an active part of this early stage, contributing to the Pre-Candidates development and being responsible for endorsing the ones who are a proper fit to our network.

After a Pre-Candidate team has submitted its community event report, initial market research, video pitch and Candidate application form, the team will be invited to join a call with our Global Growth Lead. Only after having received the endorsement from her, the team will be invited to proceed further. As a next step, the team needs to submit a EUR 845 Candidate payment which will cover the 1-day training with an Onboarding Coach as well as 15 hours of virtual coaching throughout the Candidate stage. After the deposit of the Candidate payment, we offer an on-site 1-day Onboarding Coaching session at the Impact Hub of the Onboarding Coach, in which at least two members from the Pre-Candidate team deep-dive into our network’s values, lessons learned, and our culture. The Onboarding Coach needs to endorse the Candidate’s application and only after that the application will be placed online for the entire network for review and questions. In case no objections are raised, the team is officially approved as an Impact Hub Candidate.

During the Candidate stage, the team will be receiving support from the Onboarding Coach who will provide guidance through the process and assist in the creation of a feasibility study – one of the main elements of the Initiative application. The overall Initiative application still consists of the team’s feasibility study, the financial planning, a filled out Initiative form and letters of recommendation from two Referring Impact Hubs that should support the Candidate’s vision and truly believe in it.

In this stage, the team will continue having access to several resources: best practices and the network’s learnings, including case studies and webinars, as well as Hubnet (our internal communication platform). They will receive a branded blog linked to the main website, their personal Impact Hub Candidate logo, a business plan toolkit, a presence on the main global map, an @Candidate.impacthub.net email addresses, and will receive our weekly newsletter.

After submitting the application and paying the first instalment of the joining payment, the Initiative application will be placed online for the entire network for review and questions. If no objections are raised, then an elected Initiative Committee will have interview calls with the team’s Onboarding Coach and the entire team itself. The Committee will then vote and if the team receives ¾ majority vote, it will advance to the next stage and will be welcomed as an Impact Hub Initiative of our Network.

Once the Initiative Committee has made its final decision, the team can officially call itself an Impact Hub [City Name] and will be welcomed into our network. The team will receive a EUR 3000 development budget, which is part of our overall joining payment and, together with the Onboarding Coach, the team will define its development plan. It will need to find a space, raise money and build a thriving community. It is time to think about what really helps to open and run a thriving and sustainable Impact Hub. Is it an Art of Hosting training, an on-site visit from their Onboarding Coach? All of that and many more actions can be taken as part of the development plan.

The team will still have access to all of the services from the Candidate stage, plus full access to the Makers website (internal) to help along the way. The team will also receive full integration into the network (personalized Impact Hub logo, a branded website, full access to Hubnet, and access to all learning and support resources), and access to Impact Hub Marketplace via the Makers Website, including programs and partnerships from around the network. And, to be fully inducted, the team will be invited to three individual calls: a Governance Induction Call, a Board Welcoming Call, and Capacity Building Induction Call.

The Joining Payment is the fee each new Impact Hub pays to join our Network and contribute to cover for costs of onboarding and of key services and assets of the Network, like information systems, the work of our global team, among others. As long as the onboarding process exists, we had a Joining Payment. The Joining Payment varies from EUR 6,000 to EUR 24,750, and the specific value each team will pay is estimated based on two components: the projected revenue of the local Impact Hub in the third year of operation, and the purchasing power of the city based on GDP per capita. When the GDP per capita of the city is not available, we use the GDP per capita of the country.

Now, let’s go into more details:

1. Payment Framework

The base for our Joining Payment is the annual cost of onboarding 20 teams into our Network. This cost is at EUR 14.600 per team for the activities and services each team is receiving throughout joining the Network, such as information systems, the work of our Onboarding Coaches, the global team, and much more. The Joining Payment is divided into two elements:

• City GDP per Capita Payment = Average Cost of Onboarding x City GDP per Capita Factor
• Impact Hub Revenue Generation Capacity Payment = Average Cost of Onboarding x IH Revenue Capacity Factor

Based on the experience to date, which indicates that an Impact Hub’s financial development and sustainability is a function of context and team ability, each of the two Joining Payment formula categories is assigned a weight of 50%. Thus the overall Joining Payment is estimated like this:

Joining Payment = (14.600 x City GDP per Capita Factor) x 50% + (14.600 x IH Revenue Capacity Factor) x 50%

• City GDP per Capita Payment is based on the city GDP per capita value. The rules for the estimation of the City GDP per Capita Payment are the following:
  • The basis for the estimation of this element of the overall payment component is the City’s GDP per Capita stated in the Global Metro Monitor Database from Brookings Institute
  • If the City’s GDP per Capita is not available, it will be taken into account the country’s GNI per Capita, Atlas Method (current USD) from World Bank – World Development Indicators
  • Currently all estimations are based on year 2014 – latest year for which world databases are available. When figures are updated by the referred sources, information based on the latest year available should be used.

 

GDP per Capita USD
Quintile	GDP per capita start	GDP per capita finish	Cost Factor	Payment
5	40.000	more	1,695	24.750
4	20.000	39.000	1,473	21.500
3	10.000	19.000	1,027	15.000
2	5.000	9.000	0,753	11.000
1	less	4.999	0,411	6.000

 

• Impact Hub Revenue Generation Capacity Payment is based on the local Impact Hub’s gross revenue projected for its third year of operations. Rules for Impact Hub Revenue Capacity Payment are as follows:

The basis for estimating this payment component is the local Impact Hub’s gross revenue projected for third year of operations, as stated in the team’s feasibility study submitted as part of the team’s Initiative application.

Gross Revenue 3rd Year EUR
Quintile	Gross Revenue in 3rd Year Start	Gross Revenue in 3rd Year Finish	Cost Factor	Payment
5	400.000	more	1,695	24.750
4	300.000	399.999	1,473	21.500
3	200.000	299.999	1,027	15.000
2	100.000	199.999	0,753	11.000
1	less	99.999	0,411	6.000

 

1.  Example of Joining Payment: Delhi [India]

City GDP per Capita Payment: The city‘s GDP per Capita according to 2014 Global Metro Monitor Map is 12,747. This makes it fall in the third quintile ranging between USD 10,000 and 19,999 which is related to a cost factor of 1.027. Thus: City GDP per Capita Payment = 14,600 x 1.027 = 14,994.

Impact Hub Revenue Capacity Payment: Let’s imagine in the team’s financial feasibility study submitted as part of their Initiative application, the team projected a gross revenue for the third year of operation of EUR 150,500. This makes it fall in the second quintile ranging between EUR 100,000 and 199,999, which makes applicable a cost factor of 0.753. Thus, the related payment will be: Impact Hub Revenue Capacity Payment = 14,600 x 0.753 = 10,994.

Finally, to estimate the team’s overall Joining Payment is the following:

• Delhi’s Joining Payment = (City GDP per Capita Payment) x 50% + (IH Revenue Capacity Payment) x 50%
• Delhi’s Joining Payment = (14,994 x 50%) + (10,994 x 50 %)
• Delhi’s Joining Payment = 7,497 + 5,497 = EUR 12,994

1. Payment Plan

The total Joining Payment is split into 2 equal instalments:

1. The first instalment is due when the team applies to become an Impact Hub Initiative and prior to their application being processed by the Initiative Committee. This instalment is amounting to 50% of the team’s overall Joining Payment.
2. The second instalment is due 180 days after the first day of starting the Impact Hub business. This instalment is amounting to 50% of the team’s overall Joining Payment.

Within the first instalment of the Joining Payment, there is a non-refundable amount of 1000€ in order to cover the costs of the Initiative Committee. This means if the Initiative Committee rejects the team’s application, the team will be refunded the first instalment that the team made when applying for Impact Hub Initiative status, minus 1000€.