NextBillion.net - Development Through Enterprise - Guest Post: President Bush Visits A to Z in Tanzania - Comments

Brian, I enjoyed reading

Christine — Wed, 12 Mar 2008 18:42:46 -0400

Brian, I enjoyed reading your post. I think your fourth suggestion for a policy change in the President's Malaria Initiative is the most interesting. The issue of recycling the insecticide nets is a real issue. Is recycling even an option? Was this considered during the development process? Obviously, Africans need the bednets, but they also need an environmentally friendly way to dispose of them. I agree that this private supply chain should be reversible, but is anyone even considering this yet? I think most people are primarily concerned with distribution of nets, not the collection and redistribution. I see collection and redistribution as an opportunity for cost savings. Perhaps recycling the nets is less expensive than manufacturing them from scratch. I think investing in plastic recycling capacity in Africa would be a significant advantage since it will reduce costs and eliminate this challenge for the initiative.

Thanks for the post

Tal Dehtiar — Wed, 20 Feb 2008 12:38:28 -0500

Hi Brian, Great Post. Tal Dehtiar Co-Founder & President MBAs Without Borders

Reply about exits

Brian Trelstad — Wed, 20 Feb 2008 10:32:47 -0500

Thanks for this opportunity to provide some clarity on our model. We do in fact expect to exit our investments, and have already done so in the case of some of our debt investments, including A to Z. Most of our equity investments were made under three years ago, though we do expect to exit these investments with a positive return on invested capital. Though we have worked with philanthropic capital to date as our source of funding, we invest debt and equity, aiming to move the companies we work with towards increasingly commercial financing as they grow. Because we invest in companies that serve difficult-to-reach markets with unproven business models, and because we structure deals in a way that is flexible and not necessarily designed to maximize profits, we often provide capital before commercial investors are interested in coming to the table. However, we do expect returns, and over time, we seek to help a variety of investors identify opportunities that appeal to different levels of risk tolerance and different social criteria.

Additional details are available at http://www.acumenfund.org/investments/investment-discipline.html

Exits

Anonymous — Tue, 19 Feb 2008 13:31:08 -0500

While I have immense respect for the work Acumen performs around the world, I find their use of the term venture capital to describe their work to be a bit confusing. Are they looking to exit their investments? If not, how are they not simply grants using business-minded concepts and efforts. There is nothing necessarily wrong with their model but I think there language muddies the waters for provision of equity capital (social or not) that does expect to get financial returns. Does anyone know about their structure and expectations?

Guest Post: President Bush Visits A to Z in Tanzania

Rob Katz — Tue, 19 Feb 2008 11:17:57 -0500

Guest blogger Brian Trelstad is the Chief Investment Officer of Acumen Fund, a non-profit global venture fund serving the 4 billion people living on less than $4 a day. Before joining Acumen Fund, Brian Trelstad spent four years at McKinsey & Company as a consultant in the healthcare and non-profit practices and as an editor of the McKinsey Quarterly. Prior to McKinsey, he worked as a case writer at Stanford University's Center for Entrepreneurial Studies and advised a number of early-stage technology companies.

By Brian Trelstad

(This article first appeared on the Acumen Fund blog.)

Yesterday's visit by President Bush to the A to Z Textile Mills factory in Arusha, Tanzania, was a tremendous boost for Africa's fight against malaria and for African economic development. A to Z is now the only manufacturer of long-lasting insecticide nets in Africa, supplying nearly 8% of the continent’s demand for these life-saving products and employing over 5,000 people.

ABE, another local company that we have supported, has a long-term supply agreement to produce Artemisia, and by the end of the year should be producing about 15% of the world's supply. ABE also employs thousands of farmers in cultivating a valuable cash crop.

As we reflect on our experience with these two malaria ventures, we think that the President’s Malaria Initiative could go further in spurring economic development in Africa with a few policy changes in the allocation of funding for malaria prevention and treatment commodities.

(This post continues past the break; click "Read More" to continue)