FAQ
Impact Assessment
• What is meant by an impact assessment?
An impact assessment assesses how an enterprise affects those living at the bottom of the pyramid, the four billion people living on less than 2$ a day. An enterprise can be assessed either for alleviating the poverty faced by these people or for meeting their unmet needs. The broad spectrum and local focus of potential impacts means that a social impact has to be assessed within the context of multiple external factors. Lack of a universal measurement along with the added complications of subjectivity means there is yet to be a formal consensus on how a social impact should be assessed. Many organizations are working on how to rate social impact by developing sets of comparable metrics. IDG has decided not to rate but to assess an enterprise’s positive impact, be it social or environmental. Each assessment looks at the extent to which an entrepreneur understands the issues involved in achieving their impact, how they plan to achieve it and how they will measure their progress.
• How is the impact assessment calculated?
The impact assessment is calculated from evaluating qualitative information. The score reflects the entrepreneur’s intentions and strategy to achieve a social impact rather than the impact in itself. The entrepreneur is provided with certain tools during the upload process through which to demonstrate why, how and when they will achieve their impact. IDG’s in-house raters assess these descriptive responses against the impact assessment criteria scoring each section accordingly. The final score is then incorporated into the enterprises' overall score.
• Why does IDG not focus on metrics?
IDG chose not focus on metrics for two reasons:
- Although social metrics can sometimes be the clearest way to measure an impact they have the disadvantage of providing little context to a problem. To be successful, metrics need to be a comparable quantitative entity. Metrics therefore work best when looking at comparable enterprises for instance assessing only microfinance institutions. One of IDG’s merits is that its services can be used by a broad range of different enterprises. Using metrics might then run the risk of overlooking the real value within individual enterprises.
- With limited direct interaction, IDG as an online platform needs to be particularly sensitive to providing the needed context and understanding surrounding a social issue. Investors are able to conjure up a much clearer picture of the issues, strengthening their knowledge.
• Why does IDG include a social assessment?
All enterprises uploaded onto IDG are multiple bottom line enterprises. Their bottom line includes not only profit but a social revenue too. IDG’s investors want to invest in companies where they get a financial and social return on their money. The social assessment is therefore an integral part of IDG’s rating system. Through the social assessment, investors are able to visualize the impact their money is making and compare individual enterprises.
• Does IDG’s impact assessment look at both social and environmental issues?
The impact assessment looks at both social and environmental issues. The only criteria are that they have a multiple-bottom line.
• Who looks at the social rating?
Only subscribed investors and the individual entrepreneur are able to see how the overall rating is broken down into business and social rating. The rating circle displays a graph outlining the rating breakdown when rolled over. Clicking on the social impact column of this graph leads to a page displaying the relevant questions. Depending on the entrepreneur’s privacy settings this page could also display the rater’s comments. Subscribed investors can use the social assessment rating as part of their search function and can change the default weighting according to their own preference.

All other site browsers will only be aware that 30% of the rating displayed relates to a social impact. This is the default weighting. They will however also be able to access first hand accounts of how an enterprise impacts its constituents. Although these publicly available constituency feedback forms do not add to the numerical rating, they provide both insight and context into the actual impact. For the entrepreneur they also add invaluable learning.
•How can an entrepreneur improve their impact assessment?
The impact assessment looks at how well a social problem has been understood and how strategically their goal is planned. To score well, the entrepreneur needs to understand the social need behind their business idea, understand those impacted by it (identify all stakeholders), demonstrate a clear step-by step action plan of how to achieve their goal and indicate how they intend to measure progress throughout.
•Does IDG help strengthen an entrepreneur’s social impact?
IDG’s social rating was designed to assist the entrepreneurs’ understanding of what he could achieve and the strategy he would need to adhere to, to achieve this. Entrepreneurs are helped to think strategically about what they are trying to do and how to achieve that. Through the upload process they are given the opportunity to think about why their business model helps those at the bottom of the pyramid, a structure through which to work out a step by step plan and help in calculating ways to monitor progress along the way. IDG provides a set of tools list as ‘pop-ups’ to aid the entrepreneur in this thinking.

Entrepreneurs also learn directly from those affected by what they are doing through the constituency feedback forms. One of the questions in the form asks explicitly how a constituent would improve the enterprise.
•Is the impact assessment compulsory?
The impact assessment is compulsory in that it makes up part of the overall rating. The whole rating process consists of twenty questions, five of which relate directly to an enterprise’s social impact. If an entrepreneur decides not to enter the required information that will score a 0 as their rating.
•Who carries out the impact assessments?
The social rating is assessed internally by the IDG team. Having developed the unique rating system themselves, the IDG team are well versed in how the rating is measured.
 
IDG’s Rating
•What part of the business plan is rated?
The executive summary as seen in the business plan preview is rated. The elements evaluated relate to financials, potential to scale, sustainability and social impact strategy.
•Who rates the business plan?
Plans are rated internally by the IDG team.
•How long does the rating process take?
Once reviewed, plans will be displayed online and a rating produced within only two working days.
•How is the rating displayed to investors?
It is displayed in a coloured circle with the numerical score out of 10

A green circle indicates any rating higher than 7 out of 10.
An orange circle indicates any rating between 4 and 7.
A red circle indicates any rating below 4 out of 10.
•Can investors see more than the overall rating?
Yes, by clicking on the rating circle a graph appears detailing how the entreprener scored in different areas. Investors are able to change the weighting given to each rating section. The default IDG weighting is 70% business rating and 30% social rating.
•Are raters monitored to ensure the ratings are fair?
All raters are continuously monitored. Statistics of the ratings they award, frequency and speed of rating and number of times re-ratings have requested alternative raters are tracked. Raters are trained in and have to abide to strict rating guidelines designed to ensure fairness throughout the process.
•What are the benefits of IDG’s rating process?
There are two main benefits. The first is that investors have an immediate insight into the enterprise's strengths. They can use the ratings as part of their preference search. The second is that the raters help entrepreneurs strengthen their plan as raters are able to leave constructive comments. Comments are directed either at a particular section of the plan or in relation to one of the twenty rating questions
•How can an entrepreneur improve their rating?
Plans can be rated multiple times but after the initial rating, further ratings will require a small fee.
•What documents have to be uploaded for the credibility rating?
There are five compulsory documents to upload, plus an additional one for registered companies. These are needed to assure the entrepreneur's credibility and prove their identity
Compulsory documents:

Character:

Upload all 3, and either tick or don’t tick box		 Co-signed character reference
Photo upload
Biographical details
Management team criminal
record tick box
 

Identity:

Upload at least 1		 Passport
Birth registrations
Driving licence
Voter’s identity card issued by election commission
Social security book
Income tax PAN card
Ration card
Known Employer’s ID card
NREGA- job card
Health records/ medical card
 

Address:

Upload at least 1		 Cell phone contract
Utilities bill (gas, electricity, water)
Mail order statement
Insurance certificate
Land record
 

Registered company:

Upload at least 1		 Any legal documents pertaining to registration:
Copy of Registration Certificate/ Trust deed/ Incorporation certificate
Memorandum of Association / Rules and Regulation/ By Laws
Audited Financial Statement Report
 
Optional documents: Academic certificates
Relevant qualifications
Further references
•Why are these documents compulsory?
Although not included directly in the overall rating, these documents have to be uploaded to verify the entrepreneur's credibility rating. IDG has to have proof of their identity and address, in the same way a bank does when you open an account. A rater will not proceed with a rating before all compulsory documents have been received. If the entrepreneur uploads three or more additional documents they receive a starred rating.
Cannot proceed with rating Not all compulsory documents uploaded  
Proceed with rating All 5 compulsory documents uploaded Includes proof of registration if registered
Starred rating All compulsory documents and three additional documents uploaded This includes: extra verification documents, extra registration documents or a non-compulsory document
•How do I achieve a starred rating?
By uploading three or more additional documents for your credibility rating
 
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