Wharton Social Impact Vice Dean Katherine Klein interviews Thilan Tudor — a Penn Med student — about why he joined an impact investing program and what he learned from researching a promising electric vehicle startup. This transcript has been edited for brevity and clarity.
You’ve been working with our program WIVA (Wharton Impact Venture Associates), but you’re a medical student. How did you connect with Wharton Social Impact and why?
Thilan Tudor: Prior to med school, I worked in equity research at an investment bank and also in biotechnology, corporate development, and healthcare consulting. Penn was a natural fit for me because the medical school provides great clinical training and a great academic medicine experience and, at the same time, I can participate in programs like Wharton Social Impact.
When I learned about WIVA, I knew this was something that really spoke to me. I wanted to learn how to weave elements of social entrepreneurship or innovation into my career as a clinician. I thought WIVA was such a great impact investing program not just for business students, but also for students who want to integrate social impact into their future careers.
You’ve gotten excited about a company called Borrow. Can you describe Borrow and what they do?
Tudor: Borrow is an electric vehicle subscription service where users can subscribe to a vehicle for three, six, or nine-month periods. Borrow sits in the sweet spot between a rental vehicle agency (like Hertz or Avis) and a long-term two-year lease that you get from a traditional auto manufacturer. You pay a monthly fee, but you’re not tied down with all the burdens that come with car ownership, like very expensive maintenance. I think the two things that stuck out to me were the electric vehicle only fleet and the user-friendly experience.
Describe the social and/or environmental impact of this company. Why is this an impact investing opportunity?
Tudor: We were wondering, how does an electric vehicle subscription service help combat climate change or sustainable transit in large urban areas? And so we did an impact model where we saw that, on average, vehicles in Borrow’s fleet are reducing CO2 emissions by 180 kilograms per thousand miles driven. That’s a tangible number, and that was important to us. At WIVA, we want to make sure that we’re able to quantify the positive environmental change that a company may or may not have.
When you go to a rental car agency, you rarely see an electric vehicle in the options that are offered. And when you go to an auto manufacturer, you find that very few traditional companies here in the U.S. offer electric vehicles. What I loved about Borrow is that they offer that sweet spot — the option to try out an electric vehicle from three to nine months.
I think having the option to try out an EV for an extended period of time can actually convert to a long-term electric vehicle purchase, which is something we priced in as long-term impact: the behavior change.
WIVA gives students hands-on experience in impact investing. What’s an example of the kind of hands-on experience you get in WIVA?
Tudor: It’s the experience of just having to cold call founders. You really have to do your initial [financial and impact analysis and research] on a space that you find interesting. I’ve always been fascinated by electric vehicles and ways that we can drive ownership in that space. And I thought that Borrow’s two co-founders had such an elegant model in addressing this problem. There are obviously challenges that come with electric vehicle ownership and Borrow isn’t immune to those. But when I spoke with them on our initial call, they had such deep industry knowledge that I think is really important to be able to execute a growth plan or a long-term development plan in a venture.
What were your experiences with Borrow following that initial call?
Tudor: After the initial phone call with Borrow’s co-founders, I was really excited. Over the next few months, we scheduled multiple in-depth, hour-long phone conversations. We dug into the business model, the financial statements, the long-term impact vision, and the growth plan to understand not only where Borrow was in the present, but also where it was going in the future.
We talked about it during WIVA investment team meetings where we have our entire committee of 15 students. We kind of have a debate on a company and ask, “Is this something that we really believe in? What are the strengths and weaknesses of this company? How does it fit with what we’re trying to do as Wharton Impact Venture Associates?” After a few months, we decided to put them forward to partnering with Republic.
What is Republic and how has WIVA worked with the platform?
Tudor: Republic is a crowdsourcing platform that allows the general public to invest in startups. It’s a really exciting space where, through safe notes, you can invest in a fractional share of a company and have equity in really innovative and disruptive companies. There are a lot of crowdsourcing platforms out there. But what’s unique about Republic is that you actually have a stake in the game as an individual, which has usually been limited to larger institutional investors. We’ve worked with Republic in the past on other deals and it’s been a strong partnership for WIVA.
So WIVA students are finding the companies, doing the financial and impact analysis, and then connecting them to Republic as an investment opportunity.
Tudor: Exactly. We thought it was a great fit because not only do we want to help Borrow in their quest to raise capital, but also help drive the growth of their user base. We couldn’t imagine a better fit in terms of having a crowdsourcing platform where potential users can actually have a stake in the company that has a product they want to use.
Borrow just wrapped up their campaign on Republic and they raised over $179,000.
What have you enjoyed most about WIVA? What do you say when people ask, “You’re doing what at Wharton?”
Tudor: The one thing that really has stood out to me is just the collegiality of all the students. We really do come from diverse backgrounds. I know it’s a buzzword these days to talk about the diversity of a team — but I really think WIVA meets that goal and purpose and also stands by it.
I’ve learned so much from the students that don’t come from medical school backgrounds. I’ve also learned how to think about companies in ways I hadn’t imagined.
Finally, I’ve learned a ton from Rajith Sebastian (our director at WSII), who has a lot of institutional expertise, and from other WSII staff about thinking of impact in not only an academic sense but also through a real-world perspective. Learning from this team has changed the way I view the world.
— Nisa Nejadi
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Posted: November 19, 2020