Approaching impact, from the perspective of a non-impact fund: how Brighteye is the first investor to partner with WiKIT to support founders to improve the way they think about and measure their impact.
It’s not just impact-focused funds that care about impact. In some sectors with inherent social purposes, impact tends to align with commercial success.
At Brighteye Ventures, an Edtech-focused fund operating at pre-seed, seed and series A stages, we take impact seriously; often analyzing the extent to which a prospective investment enables learning when evaluating companies. While we are not an impact fund – ultimately a company’s financial prospects are the key determinant of our investment decisions - we are an increasingly impact-conscious fund, and will be dedicating more resources henceforth to helping those companies in our portfolio with an impact focus to document their effectiveness. There are several interconnected reasons for this initiative.
Firstly, documenting impact is good business practice. Learning products that find their way into pre-schools, schools, universities, businesses, homes and elsewhere need to be ‘effective’ and achieve impact that improves peoples’ experiences to be able to acquire and retain customers. Specific evidence of impact we (all!) might like to see include dollars saved for schools, hours saved for teachers, job placement rates for students, and improved assessment scores for school kids. Such evidence creates a virtuous cycle in both the marketing and impact of these products, bringing more customers in and extending social benefit further.
Secondly, it’s important to some of our investors. As the Edtech sector evolves, there are increasing calls for all actors along the chain to consider impact. Working back through the chain from entrepreneurs you find VCs. Go further still and you find limited partners (LPs), the people and organisations that fund the VCs. Many LPs that operate in education do so because of the positive impacts their capital can create. We have certainly noticed a trend of foundations being keener invest in edtech funds. Taking a more sophisticated approach towards impact allows us to give impact-oriented LPs more insight into how Brighteye aligns with their priorities.
Thirdly, we recognise that many Edtech companies are started because of their own desire to make a positive change in the world. We want to help those founders with this process, providing pathways and expert ears, to make sure that they can reach their impact goals.
While recognizing that documenting impact can be immensely valuable, we also know that considerable uncertainty remains for companies looking to formalise their approaches to impact. There is currently no systematic approach for companies and funders to interrogate and intentionally improve a company’s approach to evidence. Nor is there an established method to understand whether a company’s approach effectively delivers educational outcomes for target customers and end learners. Specifically, the sector has lacked tools to demonstrate and evidence how much a product can harness or change complex learner/teacher behaviour to optimise outcomes.
With these challenges in mind, we are building a partnership with WiKIT. WiKIT has been formed by Professor Natalia Kucirkova, with the aspiration to become one of the go-to impact and evaluation partner for Edtech startups and latterly, scaleups. Unlike other public offers, WiKIT intends to cover all areas of Edtech evidence.
The WiKIT model begins with getting companies “evidence-ready” by co-developing, or independently verifying, the companies’ Logic Model, Theory of Change and Theory of Action. Relevant literature is assembled for the company’s individualized research library, with guidance on how to extrapolate from current knowledge base to the company’s intended impact.
This is then used to inform an evidence plan tailored to each company with support on what to measure and how to measure it. Updates would be made annually, with consultancy in the intervening months. This process would become increasingly sophisticated in time as the bank of impact data and measurement details crystallise.
Brighteye and WiKIT’s researchers led by Natalia Kucirkova and Olav Schewe are working in partnership to test the offer in the VC context in the hope of arriving at something promising that can be rolled out to relevant members of Brighteye’s portfolio, individual Edtech companies and other representative organisations across the sector.
We hope that this will lead to positive outcomes throughout the Edtech community. Students of all ages will be able to access high quality products that meet their needs and help them achieve the outcomes they want; Edtech companies will be able to realise their impact aspirations; and investors will be able to make fantastic returns from companies achieving great impact and penetrating a range of sectors via impactful portfolio companies.
Watch this space. We hope this will create a model for Edtech evidence. If we manage, we should all win: investors, Edtech companies and most importantly, learners.