At Acumen Fund's [1] 2007 Investor Gathering, the focus was squarely on three pillars: capital, knowledge and talent. Six-plus years after its creation, Acumen has staked its mission - funding entrepreneurial approaches to poverty alleviation - on these as the centerpieces of a three-pronged strategy.

So, how are they doing? On the capital front, Acumen has raised $48 million towards a $100 million goal. To build knowledge within the field, they are writing case studies, piloting assessment methodologies and launching a new web site. And as far as talent is concerned, Acumen is building and retaining a top-notch worldwide team [2] while investing in the next generation of leaders through its Fellows program [2].

I was privileged to attend the Investor Gathering, and took 5 pages of notes, which I will attempt to summarize here. If you have any questions or comments, fire away.

Overview

Katherine Fulton [3] kicked off the event discussing "Acumen's Moment" - since I blogged about that [3] the other day, I won't repeat myself. Fulton was followed by Acumen CEO Jacqueline Novogratz [4], who delivered what amounted to a state of the company address. Her talk was compact and impassioned (if you have ever heard Jacqueline speak [5], you'll know that's the norm) and gave attendees a sneak peek into the day's details.

I particularly enjoyed her story about Medicine Shoppe [5], an Acumen Fund investee [6] that runs franchised health clinics in low-income parts of India. Jacqueline was visiting some of Medicine Shoppe's new clinics in slum areas, and a local customer told her, "We're willing to pay, but we want trust and we want someone to be there for us." That single sentence pretty much wraps the entire BOP concept up: willingness to pay, with a need for trust and long-term relationships. If only 50 to 100 CEOs could get that same message...

Capital

After a short break, Acumen Fund CIO Brian Trelstad [7] delivered a summary of the Fund's investment portfolio. There are 29 approved investments in local enterprises, 15 of which are on the books. $36 million $27 million is under management - a startling number when you consider Acumen pretty much blazed the trail in BOP investments 6 years ago. I particularly enjoyed the technical aspects of Brian's talk: term sheets [8] and documentation.

Brian admitted that Acumen has had to revise its term sheets and other documentation to be more locally appropriate. This is important as others move into the BOP investment space - they should learn from Acumen in terms of what works and what doesn't when structuring an investment. On the one hand, investors have a fiduciary responsibility to their backers to create legal relationships protecting shareholders. But on the other, success in this space depends in large part on having an empathetic relationship with your investees. How do you create a balance between fiduciary responsibility and empathy? It's an ongoing challenge, but keep Acumen is facing it head on.

Knowledge

Yasmina Zaidman [9], Acumen's Director of Portfolio Strategies, talked about the importance of extending their impact beyond the portfolio. Even if Acumen meets its goals: $100 million under management with 60-80 enterprises that work with 50 million people, there will still be 950 million (or more) poor people that remain underserved. Realizing that, Acumen has set out to advance knowledge in the field of enterprise-based approaches to poverty alleviation.

Their approach is three-pronged: build deep knowledge, communicate effectively, and partner. In terms of knowledge building, Acumen is working with academics and other researchers on case studies and impact assessments. (Side note: I read a version of a to-be-released William Davidson Institute [10] case study on Acumen, and was blown away - I will post it here when it's out.) Their Portfolio Data Management System [11] (password protected), which they built in partnership with Google.org [12], is now being shared with a range of enterprise development organizations, including WRI's New Ventures [13], as a beta version. Finally, Acumen is partnering with industry leaders like IDEO [14] to put human-centered design on the map for its investments and the entire community at large.

Also on the knowledge front - keep an eye out for Acumen's re-designed web site, which will go live next week. Kudos to Mariko Tada [15] for her tireless work on it - the version I saw looks fantastic and works great.

Talent

Finally, Acumen is scaling up its talent - from in-country staff to New York staff to its Fellows program, Acumen is investing in world-changing people to effect change. Yes, Acumen is now a $48 million fund, with $36 million $27 million under management in 5 countries - but they have only 35 employees. When Acumen hires, they do it well. And they retain their people, despite paying NGO salaries in a competitive New York talent market. Why? Frankly, Acumen is an opportunity for hundreds of motivated people, including the 2008 Fellows [16], with whom I met last week.

Beyond capital, knowledge and talent, the Investor Gathering featured a great panel entitled "Can These Investments Scale?" Moderated by Acumen's Raman Nanda, the panel featured Satyan Mishra [17], Jordan Kassalow [18] and Varun Sahni [19]. Mishra is the founder and CEO of Acumen investee Drishtee [20], a franchised Internet kiosk company in India. Kassalow is best known as the co-founder of Scojo [21], the low-cost eyeglasses enterprise operating in 10 countries worldwide. And Sahni is Acumen's India country director.

As far as "scaling up" is concerned, these three guys know their stuff. When I attend international development events, the words "scaling up" are my cue to tune out or leave. Development experts know little or nothing about what scale truly means - I'm convinced that if they did, we wouldn't be facing such endemic development problems around the world. But this is not about why development doesn't work; it's about why these three panelists understand the issues at hand.

For Sahni, the India director, scale is all about impact and sustainability: do you work with a significant portion of the target market, and can you continue to do so and grow in the foreseeable future? To Kassalow, scale is not just about distribution - can we get more glasses to more people who need them - but also about creating the markets for glasses. This is music to my BOP ears - market creation is exactly what we need to be talking about, rather than "number of clients served."

Interestingly, Mishra suggests that human resources - not money - is the primary impediment to Drishtee's growth: he needs to find more good entrepreneurs to own kiosks. He even offers the audience the opportunity to come and run a kiosk; after all, he already has "4 white Americans" working for him!

At this point, Nanda asks the panelists how their enterprises might grow without them, the founder/entrepreneur. To Mishra and Kassalow, it's about redundancy: if you can replace personal dynamism with systems and process, then the business can run without the entrepreneur. Such an entrepreneur-to-manager transition is familiar to academics and business school students, but it's an important insight for investors.

There were other excellent presentations, including the various portfolio managers and another panel, but this post is already too long. In sum, the 2007 Acumen Fund Investor Gathering was a great learning experience. It was also a bit of a who's-who in the BOP community; I ran into Jocelyn Wyatt [21] from IDEO (she was a 2007 Acumen Fund Fellow), David Kirkpatrick [22] from Fortune, and others. Kudos to the team for all their success in 2006 and 2007; I look forward to attending next year's Gathering.