1. 7 February 2012 NIABI 2112, New Delhi, India
Ralph von Kaufmann
UniBRAIN Facility Coordinator
Forum for Agricultural Research in
Africa
AgBIT - Zambia CAF - Mali CURAD - Uganda CCLEARr - Ghana IDPA - Uganda SVCDC - Kenya

2. FUNDING AND
SUSTAINABILITY OF
AGRIBUSINESS
INCUBATORS

3. Funding and Sustainability of Agribusiness
Incubators
Content
• Background to UniBRAIN
• UniBRAIN’s purpose, objectives, outputs
• UniBRAIN Agribusiness Incubators
• The functions of the incubators
• Aspects of funding and sustainability of the
incubators
• Conclusions

4. Funding and Sustainability of agribusiness
incubators
Background to UniBRAIN
• Wide scale investment in agribusiness and
agro-industry in Africa is presently
constrained by: Human and institutional
capacity deficits
• African universities are not sufficiently
geared to meet the needs of industry
• Graduates often cannot find employment
while many small businesses lack staff with
the education and skills needed to drive
innovation
• Essentially the relationship between the
demands of the private sector and what
universities teach is too weak
• Nowhere are the these deficiencies more
critical than in agriculture, Africa‟s dominant
industry
• However, studies show that when university
graduates do business they create more jobs
than those without university education

5. Funding and Sustainability of agribusiness
incubators
Purpose of UniBRAIN
UniBRAIN will break the barriers and foster
collaboration between universities, business and
research to create cultures and environments
that will:
• value, encourage and enable innovation
• produce graduates who are problem
solvers
• who are potential entrepreneurs
• especially women and youths
UniBRAIN will establish aagribusiness
incubators as organizations for accelerating the
creation of successful enterprises by providing
them with a comprehensive and integrated
range of support, including incubator
space, business support services and
clustering and networking opportunities

6. Funding and Sustainability of agribusiness
incubators
UniBRAIN Agribusiness Incubator
objectives
UniBRAIN’s development objective is:
• to contribute to enabling African countries to
create jobs and raise incomes through
sustainable agribusiness development.
UniBRAIN’s Immediate Objective, which is also its
value proposition, is:
• to enable universities, business and agricultural
research institutions to commercialise
agricultural technologies and produce
graduates with entrepreneurial and business
skills through agribusiness incubator
partnerships.
UniBRAIN’s objectives will be realised by:
Output #1: Commercialisation of agribusiness
innovations supported and promoted.
Output #2: Agribusiness graduates with the
potential to become efficient
entrepreneurs produced by tertiary educational

7. Funding and Sustainability of agribusiness
incubators
UniBRAIN Agribusiness Incubator Consortia
 The Consortium for enhancing University Responsiveness to
Agribusiness Development (UniBRAIN-CURAD) focusing on
plantation cash crops Specific value chain: Coffee
 The Incubation and Diversification of Banana Products for
Agribusiness (UniBRAIN-ABP or Afri Banana) focusing on staple
food and cash crops Specific value chain: Banana
 The Sorghum Value Chain Development Consortium (UniBRAIN-
SVCDC) focusing on smallholder dry land food grains
Specific value chain: Sorghum
 The Creating Competitive Livestock-bias Entrepreneurs in
Agribusiness (UniBRAIN-CCLEAr) focusing on Smallholder
livestock Specific value chain: Livestock
 The Innovative Centre for Agro-forestry (UniBRAIN-CAF) focusing
on agro-forestry products
Specific value chains: non-timber forestry products, cereals and
fruits
 The Agri-Business Incubation Trust (UniBRAIN-AgBIT) focusing
on tropical fruit Specific value chain: Mango

8. Funding and Sustainability of agribusiness
incubators
UniBRAIN CAF
UniBRAIN CCLEAr
UniBRAIN ABP
UniBRAIN CURAD UniBRAIN SVCDC
UniBRAIN AgBIT
UniBRAIN
Agribusiness
incubators

9. Funding and Sustainability of Agribusiness
Incubators
Why and how will African universities
Functions of the Agribusiness Innovation Incubators
link with agribusiness
UniBRAIN will support universities, businesses and research
institutions to establish agribusiness incubators, which will
provide:
• facilitation for creating competitive agribusinesses through
technology development and commercialization
• handholding services starting from business conceptualization
to implementation and scaling up
• support for realising business concepts from university faculty
and graduates, researchers and agribusinesses
• consultancy services to agribusiness
• help in accessing financing for SMEs and start-ups approaching
impact investors and social capitalists

10. UniBRAIN’s unique synergies of
the interactions between the partners
Activity Line A: Fostering agricultural
innovation
Access to high
Opportunities to
level human and
acquire and share More efficient & institutional
experience in effective capacity
promoting innovation innovation in
African
Activity Line C: Exchanging agriculture Activity Line B:Improving
experience, resources and agribusiness teaching
knowledge learning and research
Access to hands-on learning
and stakeholder guidance in
changing curricular and
improving teaching and
learning

11. Funding and Sustainability of Agribusiness
Incubators
Example Incubator Client Categories and Services
Start Up Growth Expansion Mature
Networking
(domestic and
International)
Assistance and linkages to funding and
market Technologically capable,
Productivity driven and
Handholding through business coaching, mentoring, consultancy and Globally competitive
training on mindsetting, Business plan, Accounting, marketing,
communication skills etc
Biotech; Assistance in Brand
Agribusiness; Development
Production
assistance
Incubation services •Technology commercialization
and shared facilities •Product and process improvement
•Technology Transfer Office
Selection/ •IP Management
Assessment
Pre-incubation/
Preseed
Diagramme by ANAFE

12. Funding and Sustainability of agribusiness
incubators
Functions of the Agribusiness Innovation Incubators
 The mission of the incubator is to facilitate the creation of
competitive agribusiness enterprises through technology
development and commercialization
 The incubator, helps new entrepreneurs and enterprise clients with
handholding services starting from business conceptualization to
implementation and scaling up
 It is up to the clients to choose the kind of services they want from
the incubator
The agribusiness incubators will provide institutional frameworks for:
 the realisation of business concepts from university faculty and
graduates, agricultural research and agribusinesses of all sizes
 consultancy services to agribusiness
 help in accessing financing for SMEs and start-ups by approaching
banks, impact investors and social capitalists

13. Funding and Sustainability of Agribusiness
Incubators
The nature of the incubator determines its
prospects for local and international
funding:
Type 1: provide a physical location in which
a new business can access facilities,
support services and business advice
Type 2: provide high-tech facilities and high-
level skills that the firms need from time to
time but cannot justify tying up so much
of their own capital
Type 3: provide in situ institutional support
to enable firms, entrepreneurs and
inventors to access resources, which
they do not have in house
 This is the UniBRAIN model

14. Funding and Sustainability of Agribusiness
Incubators
Type 1: Will appeal to local investors and lenders
 They serve local needs
 They are not easily up-scaled
Type 2: should appeal to international public & private
investors if they:
 offer services that are undersupplied in
developing countries
 offer scope for collaboration in training,
equipping and usage
 can serve clients nationally and regionally
 promise high impact breakthroughs
Type 3: should attract international public and private
donors if they:
 are public – private partnerships
 leverage existing human and physical
resources
 offer international collaboration in business and
training
 will be financially self sustained in a relatively

15. Funding and Sustainability of Agribusiness
Incubators
Current businesses New businesses
Existing
Business Enhancement Development of new
–Functions enterprises
Nature Activities
–Qualtity - Training
of - Problem solving
Business
Activitie New Expansion Agro-sector enlargement
Business –New products
s
Activities –New processes - New business lines
–New markets
Source: John Kuada Centre for International Business, Department of Business Studies, Aalborg University

16. Funding and Sustainability of Agribusiness
Incubators
Necessity-based Growth-based
Imitation- “Entrepreneur among “Giants in the crowd”
oriented others” Good positions in social
businesses Crowded low-end and political networks
business segments Dependent on social
Degree of
Low profitability capital to leverage resources
Creativity
Limited organic growth
&
Innovation Innovation- “Orphans” “Eye – catchers”
oriented ”lonely entrepreneurs” Persons with unusual
businesses May go unnoticed talent
High entry barriers Seeking venture capitalist
Success difficult to support
achieve Want to attract
Require support & public/journalistic attention
mentoring
Source: John Kuada Centre for International Business, Department of Busines
Studies, Aalborg University

17. Funding and Sustainability of Agribusiness
Incubators
Funding Prospects
 There are few international donors and investors who are specifically dedicated
to supporting agribusiness incubators
 But if the incubators are themselves businesses there is a huge number and
variety of potential donors and investors amongst which to search for
compatible mandates, interests and cultures
 Whether agribusiness incubators can attract business investment is still to be
tested and will depend on the merit of their business plans and how well they
can mesh with not just the official policy of the potential investor but also with
the personal convictions of the investors‟ staff and decision takers

18. Funding and Sustainability of Agribusiness
Incubators
Sources Governments
of funding
• Most governments are keen to support start-ups and SMEs but research is
required to find the schemes criteria and what kind of proposals are most likely
to succeed
Development Partners
• Promoting public private partnerships is apopular development objective but it
is almost a requirement for success to find a champion in the development
agency who is not only interested but can actually help
Banks
• Bank interest can be high but the incubators can reduce there transaction costs
and risks and they should respond favourably. Islamic banking may be more
appropriate for start-ups
Impact investors
• Impact investors seek to enhance social structure or environmental health as
well as achieve financial returns. They ay take an active role mentoring or
leading the growth of the company similar to a venture capital firm assists in the
growth of an early-stage company.
Social capitalists
• Social capitalists believe that a strong social support network for the poor
enhances capital output and that by decreasing poverty, capital market
participation is enlarged. Social capitalism accept that government regulation,
and even sponsorship of markets, can lead to superior economic outcomes.
Venture capitalists
• Venture capitalists invest in early-stage, high-potential, high risk, high growth
startup companies. They make money by owning equity in the companies it
invests in, which and usually have a novel technology or business model in high
technology industries

19. Funding and Sustainability of Agribusiness
Incubators
Incubator Financing
At different stages of start-up, operations and expansion, different amounts and types of financing may be
needed
There are 3 revenue models for business incubation environments:
1. Income from incubated enterprises – payments for facilities and services
2. Returns to equity - sharing in client success by rising value of equity or royalty agreements on gross
sales
this can be a very good way to receive payment for business incubation services once the company
succeeds, rather than up front when the company has little income
It only applies to high growth companies which have clear exit strategies otherwise royalties may be a
better approach.
it takes up to 10 years to realize returns and a portfolio of at least 20 companies is required to spread
the risk, not to mention the high level of management expertise that is required.
3. Donors
Most business incubation environments will combine elements of each, and this article highlights the pros
and cons of each and provides guidance in choosing the right mix
• It is often best to combine elements of all three of the models
• Another strategy is to generate revenue from non-business incubation activities such as consulting

20. Funding and Sustainability of Agribusiness
Incubators
Raising Funds
• The incubators should have well developed business models for itself and for its clients that are
summarised and combined in its Business Plan
• These identify the main funding requirements in ways that can attract the interest of financiers
• They have to be supported by surveys to find potential partners, sponsors and financiers, outlining
their objectives and form of operation, contact persons etc.
• Detailed Survey: on projects already supported, with the aim of identifying priorities and opportunities for
raising funds by the incubator.
• Analysis of the survey information and decisions on the presentation of a proposal for funding.
Responsible party: Director(s) of the Incubator and Technical Team
• Preparation of a summary proposal for funding the project, aimed at clearly establishing the project
concept, principal benefits and requirements.
• Establish first contact and define the negotiation process. This approach should be made by those
responsible for the allocated project area, using potential strategic partners of the incubator to establish an
appropriate channel of communication.
• Preparation and analysis of the Proposal: In the event of a successful first contact, with confirmation of
potential support, proceed to the preparation stage of a detailed proposal, in accordance with the
procedures established by the supporting entity.
• Contract Phase: Clear definitions of responsibilities, timetables, issues relating to industrial property,
financial disbursements, etc. are required for the project contract.
• Execution: Following the contract phase is the execution phase, which encompasses monitoring, follow-up
and evaluation on the part of the supporting entity.

21. Funding and Sustainability of Agribusiness
Incubators
Financial Management
Incubators need to 'walk the talk' and demonstrate high levels of financial
management capability to incubated enterprises.
The main attributes of quality incubator financial management are:
• planning, overseeing and controlling the incubator funds, whether they are
brought in through services or provided by partners and investors
• Having mechanisms need that enable the incubator manager to know
accurately the amounts available, the needs and the investment capacity
• Financial management also involves bringing in new sources of funds for the
incubator
• Preparation of Investment Spreadsheet
• Preparation of Costs and Expenditures Spreadsheet
• Preparation of Revenues Spreadsheet

22. Funding and Sustainability of Agribusiness
Incubators
Cash Flow
• The Cash Flow is an ancillary document that is crucial to the successful
financial administration of the enterprise. This document should be linked to
the budget plan in order to monitor the financial performance of the enterprise.
• Despite the simplicity of the cash flow concept, its application to a business
may result in some difficulties, arising from the following aspects:
• In a new business, it is hard to forecast the income and expenditures
resulting from some activities
• It is hard to foresee future cash income and expenditure amounts, due to
the uncertainties of the projected scenario
• It is hard to quantify the impact on the cash income and expenditures due
to the business risks

23. Funding and Sustainability of Agribusiness
Incubators
Take Home Messages
Agribusiness incubators are
businesses worthy of commercial,
donor and social capital investment
The funding is there but you have to
find an appropriate source and justify
why it should invest in your
incubator
Good business models and plans, a
sound funding strategy, and flawless
Thank you financial management are essential
for both funding and sustainability

24. Funding and Sustainability of agribusiness incubators
Sources of funding: Development Partners
Several Development Partners have schemes for supporting start-ups and SME‟s such as:
 Danish Small Business grants
 Norwegian Investment Fund for Developing Countries (NORFUND) is supporting Uganda's
Small enterprises with Shs20 billion fund channeled through Dfcu Bank
It will boost SME programmes including agro processing and market research among other
ventures
 A recent study commissioned by Sida concluded that:
“Existing knowledge suggests that public sector development support should be
integrated with other types of support, address clusters of factors and take linkages
between them into account.”
This seems to fit with the mandates of agribusiness incubators

25. Funding and Sustainability of Agribusiness
Incubators
Sources of funding: Development Partners
The incubators should seek donors and investors with mandates, interests & cultures that are
consistent with their business models (not vice versa)
UniBRAIN incubators‟ business models will be consistent with the Africa Commission‟s criteria
including:
 Gender balance in beneficiaries
 Fostering innovation and competitiveness along whole agricultural value chains to create
sustainable growth, jobs for youths and reduce poverty
 The depth, quality and contextual appropriateness of proposed changes in curricula and in
teaching and learning methods
 Fostering collaboration between African institutions and with institutions in other countries
and regions
 Having sound governance of the institutions and programmes

26. Funding and Sustainability of Agribusiness Incubators
Sources of funding: Impact investors
The Global Impact Investing Network (GIIN)
 GIIN Investors' Council is a diverse group of leading impact investors
committed to building a coherent industry that effectively channels
investment capital to address social and environmental challenges at
scale
 Impact investment which is intended to create positive social or
environmental impact beyond financial returns
 This should apply to:
- agribusiness incubators dedicated to addressing social (poverty
alleviation) and
- environmental challenges (adaptation for climate change)
- amongst entrepreneurs not reached by „normal‟ business support
systems and
- at scales beyond that of individual firms

27. Funding and Sustainability of agribusiness incubators
Sources of funding: Impact investors
GIIN members include:
• ACCION, Acumen Fund, The Annie E. Casey
Foundation, Armonia, The Bill and Melinda Gates
Foundation, Calvert Foundation, Capricorn Investment
Group, Citigroup, Deutsche Bank, The DOEN
Foundation, Equilibrium Capital, The Gatsby
Charitable Foundation, Generation Investment
Management, Gray Ghost Ventures, IGNIA, J.P.
Morgan, Leapfrog Investments, Lundin for Africa,
Morgan Stanley, National Community Investment Fund
(NCIF), Omidyar Network, Packard Foundation,
Prudential, The Rockefeller Foundation, Root Capital,
Sarona, Shorebank International, Skoll Foundation,
SNS Asset Management, TIAA-CREF, Trans-Century,
Triodos Investment Management, W.K. Kellogg
Foundation, and Wolfensohn & Company.

28. Funding and Sustainability of agribusiness incubators
Sources of funding: Impact investors
Example:
• Kilimo Trust Investors: Gatsby Charitable Foundation and the
Rockefeller Foundation (and the Government of Uganda)
• The Kilimo Trust has a Vision of Broad-based Wealth Creation
in East Africa through agriculture and agribusiness
• It removes constraints that limit the exploitation of business
opportunities and increases the success rate of investments in
agricultural enterprises
• It provides grants directly to private businesses and
disseminates the commercial experiences gained from this to
support other interested parties

29. Funding and Sustainability of agribusiness incubators
Sources of funding: Social capitalists
• Social venture capital is a form of venture capital investing that
provides capital to businesses deemed socially and
environmentally responsible
• These investments are intended to both provide attractive
returns to investors and to provide market-based solutions to
social and environmental issues
• Social venture capital can refer to debt or equity investments in
socially-oriented enterprises, which includes BoP (Base of the
Pyramid)-targeted efforts to stimulate economic development
in the poorest regions of the world
• Commercial banks also need to demonstrate “good corporate
citizenship” and may support start-ups and artisan enterprises
if the incubators prepare business plans and support them

30. Funding and Sustainability of agribusiness incubators
Sources of funding: Social capitalists
• Among the firms that deploy "social venture capital"
are: Acumen Fund, Grassroots Business Fund, Tandem
Fund, Bridges Ventures, Citizen Capital, Triodos Bank,
Calvert Group, Gray Ghost Ventures, The New
Economics Foundation , Social Venture Capital Fund,
Ventursome Fund, Social Venture Partners, VenturEast
BYST Growth Fund, ennovent, Aavishkaar and Good
Capita (Some of these are GIIN members)
• Research will be needed to determine which GIIN
members, Social Capitalists and commercial banks may
be interested in supporting agribusiness incubators
that pursue social objectives in developing countries

31. Funding and Sustainability of agribusiness incubators
Sources of funding: Social capitalists
Example:Endeavor Global, endeavor.org
• Endeavor breaks down barriers that prevent emerging-
market entrepreneurs from reaching their high-impact
potential
• Endeavor has supported over 320 entrepreneurs from
over 190 companies
• Endeavor Entrepreneurs have created more than 80,000
new jobs, paying on average ten times the national
minimum wage, and generated approximately $2 billion
in new revenue
• 95% of Endeavor Entrepreneurs' companies are still
operating in countries where ventures typically close in
42 months

32. Funding incubators: International
perspective
Example: Venture Capital for Africa (VCAfrica)
VC4Africa.biz - Africa's largest venture capital community,
investors and entrepreneurs, dedicated to building business on
the continent
• The VC4Africa Daily has + 1186 follower on Twitter - Next
update in about 10 hours
• VC4Africa organises Meetups at which aspiring entrepreneurs
can meet venture capitalists wherever there is interest
• e.g., University of California Los Angeles (UCLA) & Santa
Monica
• These are simply a place for members to meet share ideas
• No speeches, no agenda, nothing planned
• The loose structure allows for lots of networking
• Just remember participants pay for their own drinks

33. Funding and Sustainability of Agribusiness
Incubators
The prospects for local and international funding:
 There are few international donors and investors who
are specifically dedicated to supporting agribusiness
incubators
 But if the incubators are themselves businesses and
there is a huge number and variety of potential donors
and investors amongst which to search for
compatible mandates, interests and cultures
 Whether agribusiness incubators can attract business
investment is still to be tested and will depend on the
merit of their business plans and how well they can
mesh with not just the official policy of the potential
investor but also with the personal convictions of the
investors‟ staff and decision takers

34. End