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Case Studies

Design of the Entrepeneur Support Organization’s (ESOs) RBF pilot to enhance financial sustainability

Advisory Case Studies

Design of the Entrepeneur Support Organization’s (ESOs) RBF pilot to enhance financial sustainability

Client

The Dutch Good Growth Fund (Triple Jump)

Partners

Shona & Open Startup International.

Type of project

Design of a Results-Based Financing Pilot to incentive financial sustainability and program quality for ESOs, Implement the pilot and run it for a year to assess the effectiveness of the program.

Sector

SME and startups (sector agnostic, although the organizations that we are working with work primarily in the agriculture sector and with startups focussing on deep-tech solutions).

Project description

iGravity, together with the Dutch Good Growth Fund designed a state-of-the-art RBF program, whereby the goal is to incentivize ESOs in enhancing their financial sustainability (i.e., by enhancing their cost control, or diversifying their revenue streams away from grants, among others), as well as strengthening the quality of the program the ESOs offering. Leveraging the power of incentives, by tying a portion of the funding to pre-agreed results with the two ESOs, this pilot aims to provide an alternative angle to the often grant-dependent ESO space.

ESOs struggle with dependence on grants for their existence. This is problematic, as it often requires the ESO to structurally focus on fund-raising, where an absence of long-terms partnerships exists.
Struggling with finding pre-proven pathways to financial sustainability, ESO face resource constraints, limiting them in their ability to experiment with different pathways/channels to find a more sustainable business model.
In addition, the short-term existential pressure on raising funding coincides with the ESOs ability to offer quality programs for the startups and entrepreneurs that they support. This problem is doubled, where ESOs have the ambition of scaling the program, at times on the international level
It would be good to collect here some statistics from reports (ideally coming from DGGF, Argidius, or other actors in the space for who this can be beneficial).

The degree of iGravity’s support consisted of the following tasks

Preparation phase and ESO selection: Understanding ESOs challenges based on DGGF’s past and current support for ESOs, gathered key data, and scoped the ESO ecosystem through interviews with ESOs and funders. Created archetypes of the ESOs to make an assessment of challenges based on the two key parameters the program aimed to address: financial sustainability and program quality.
Design and test the RBF program. Based on the scoping phase, selected pilot accelerators, designed and structured the RBF instrument, built an operating model, trained partners, and executed the pilot with ongoing monitoring and reporting.
Learning and dissemination. Consolidated insights from the pilot phase, engaged an alliance of stakeholders, and collaboratively devised a comprehensive scale-up plan for the refined RBF instrument, aimed at facilitating its effective and sustainable deployment at scale.

Why it Matters

ESOs struggle with dependence on grants for their existence. This is problematic, as it often requires the ESO to structurally focus on fund-raising, where an absence of long-terms partnerships exists.
Struggling with finding pre-proven pathways to financial sustainability, ESO face resource constraints, limiting them in their ability to experiment with different pathways/channels to find a more sustainable business model.
In addition, the short-term existential pressure on raising funding coincides with the ESOs ability to offer quality programs for the startups and entrepreneurs that they support. This problem is doubled, where ESOs have the ambition of scaling the program, at times on the international level
It would be good to collect here some statistics from reports (ideally coming from DGGF, Argidius, or other actors in the space for who this can be beneficial).

The degree of iGravity’s support consisted of the following tasks

Preparation phase and ESO selection: Understanding ESOs challenges based on DGGF’s past and current support for ESOs, gathered key data, and scoped the ESO ecosystem through interviews with ESOs and funders. Created archetypes of the ESOs to make an assessment of challenges based on the two key parameters the program aimed to address: financial sustainability and program quality.
Design and test the RBF program. Based on the scoping phase, selected pilot accelerators, designed and structured the RBF instrument, built an operating model, trained partners, and executed the pilot with ongoing monitoring and reporting.
Learning and dissemination. Consolidated insights from the pilot phase, engaged an alliance of stakeholders, and collaboratively devised a comprehensive scale-up plan for the refined RBF instrument, aimed at facilitating its effective and sustainable deployment at scale.

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