WHAT IS THE ROLE OF A "BUILDER"?

Building an enterprise (e.g. investing capital in the creation of an organization that provides after school tutoring) requires growth capital and careful stewardship. It necessitates a patient process of trial and error. It is highly technical and has a high risk of failure. It must allow for major shifts in strategic direction, and significant changes in personnel. Finally, it is an episodic thing – once an enterprise is built, the builders can go on to other projects. Indeed, it is precisely by dismantling their growth capital "scaffolding" that builders prove that they have built an enterprise capable of standing on its own.

WHAT IS THE ROLE OF A "BUYER"?

Buying from an enterprise (e.g. exchanging revenue for tutoring sessions) is not about trial and error. It's about delivering on a predefined set of services in exchange for money. It isn't about changing what the enterprise does; it's about asking the enterprise to do more of what it already knows how to do. So it's not about risk, or about shifts in strategy. It's about "show me what you do, and how you stack up so I can decide whether I should buy here or go elsewhere." Finally, unlike building, buying is an ongoing thing – if a buyer purchases something and likes it, the hope is that they will come back for more.

NFF CAPITAL PARTNERS SEGUE

The Sustainable Enhancement Grant (SEGUE) methodology makes a clear distinction between the Builder and Buyer roles. SEGUE investments are for Builders. The SEGUE methodology enables multiple philanthropic funders to leverage each other by pooling their resources into a single, strategically-aligned investment of growth capital. And it ensures that investors will be provided with a clear and auditable record of the organization's progress towards self-sustaining operations, along with a clear record of how much growth capital is consumed along the way.