NextBillion.net - Development Through Enterprise - Micro Venture Capital: Nicaragua's Agora - Comments

RE: Yes!

Ethan Arpi — Mon, 14 Aug 2006 15:47:11 -0400

That's a good point, but a company could create jobs, cultivate maagerial know-how, and contribute to the overall investment climate while also dumping toxic sludging into rivers, etc. That is, other factors besides the ones you listed must also be part of what is considered "socially responsible."

yes!

Anonymous — Mon, 14 Aug 2006 14:10:26 -0400

Rob, your parting question begs another question - what do we mean by "socially responsible"? Ironically, the debate about corporate social responsibility too often overlooks companies' biggest contributions to society, and those they are uniquely positioned to make. A BOP venture that creates jobs, cultivates managerial know-how, contributes to the overall investment climate, and strengthens the tax base in its particular locality seems like a "socially responsible" investment to me.

Micro Venture Capital: Nicaragua's Agora

Rob Katz — Mon, 14 Aug 2006 10:20:20 -0400

We’ve already profiled Aavishkaar, the Indian micro venture capital fund that works with entrepreneurs whose capital needs are between $50,000 and $500,000 – too much for traditional microfinance but too small for commercial VCs. Now Aavishkaar has a counterpart in Nicaragua – Agora Partnerships, an initiative of Columbia University MBA students. BusinessWeek mentioned the group in a good article on the group last year; the MicroCapital blog reminded me of them again last month.

At the risk of repeating myself, I want to emphasize why I think Aavishkaar and Agora are great projects. First, they address a key bottleneck – entrepreneurs need more than the few thousand dollars that microfinance offers in order to effectively scale up, but often don’t have the collateral to secure a commercial loan (mesofinance). Second, both models are firmly rooted in profitable business practices – Aavishkaar is run by experienced VCs, while Agora’s consultants are graduates of a top-25 MBA program. Finally, these models aren’t charity – they generate profits for investors.