As part of its support to Partnerships, NFP occasionally employs the mechanism of Seed Money Facilities (SMFs). These SMFs serve to accelerate efforts to reach that Partnership's objectives. Such as stimulating innovations, advancing research or improving regulatory frameworks. To ensure that NFP can keep supporting Partnerships to employ these SMFs in the most effective and efficient way, we have asked Wageningen Center for Development Innovation (WCDI) to conduct a review. A review that not only NFP, but also our partners can benefit from.
Seed money, also known as 'seed capital' or 'seed funding', originating from the entrepreneurial field, is a common financing method for supporting early-stage startup activities. In the context beyond start-ups, it is a mechanism used by governments, universities, and NGO’s to catalyse knowledge and innovation on a specific theme in various sectors. This type of funding is non-dilutive, where funding is provided without the expectation of an equity return and “often comes in the form of loans, grants, prizes, or donations.
The Netherlands Food Partnership (NFP) enables collective impact coalitions between relevant Dutch organizations and international partners. As part of its partnership and coalitions support, NFP has facilitated the implementation of several SMFs within various supported Partnerships. While abundant information is available for seed money seekers, there is a scarcity of resources outlining how to set up a SMF from the grant-makers perspective. NFP has requested WCDI, Wageningen University & Research to review the SMF approach.
This document aims to provide good practices, insights and guidelines on the process and design of an SMF. 5 key phases have been identified: (1) establishing the seed money facility (2) the application (3) selecting submissions, (4) monitoring, and (5) follow-up. Each section elaborates on key considerations for each phase and includes tips, tricks and pitfalls to avoid.
The findings of this review are primarily drawn from practical experiences. Seven interviews were conducted to explore various objectives, processes, and design considerations. Evaluations of previous SMF experiences were reviewed and a desk study was conducted. The findings reflect that there is no on size fits all approach to the design and process of a SMF. As a result, considerations for each phase are typically based on the specific objectives of the fund and the size, capacity and preferences of the organization. Therefore it is important to acknowledge that additional and alternative design and process considerations and experiences exist beyond those mentioned in this review.
Credits
This study was conducted by Rani Temmink of Wageningen Centre for Development Innovation. The summary presentation is available upon request.
Author
Ibrahim Palaz
Coalition Builder
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