BOP Deal flow

Munya — Tue, 06 May 2008 13:05:11 -0500

It certainly seems there's a tangible increase in public and private capital targeting the BOP. I look forward to reading more on your approach to scaling BOP strategies. When it comes to scaling BOP strategies in Africa, I think the main challenge is still the entrepreneur. They are undoubtedly the missing key in this region unlike India for example. Very few are able to develop their ideas into a bankable business proposal and tend to over value their sweat capital input, which seems to be a fairly common challenge in structuring seed stage investments. The progress might be slow but it's worth the effort, these are the pioneering years!

Taking Base of the Pyramid Strategies To Scale Pt.1: An Introduction to Transformative Sector Strategies

Al Hammond — Tue, 06 May 2008 08:03:26 -0500

This post is the first of a five part series on a radical new approach to scaling BoP business models, what we call a transformative sector strategy. In this segment, I introduce the conceptual framework for this innovative poverty-alleviation model.

"It doesn't exactly keep me up at night, but I do think about it a lot." Jacqueline Novogratz, head of Acumen Fund, and I were talking about getting to scale - about expanding private sector business development and investment aimed at empowering and providing basic services to the poor to the point of making a real impact.

I felt exactly the same, and I've had similar conversations with colleagues at Santa Clara University, at Ashoka, at private investment funds, and elsewhere. Ever since we finished our report on The Next 4 Billion, the numbers haunt me. How do you meet the unmet needs of four billion people?

Convincing a dozen multinational companies to take this market seriously isn't enough. Doubling or quadrupling the capacity of the organizations that mentor social enterprises and BoP-serving small and medium businesses won't do it either. Even investing hundreds of millions of dollars in individual enterprises in this sector doesn't guarantee success. I think the goal has to be to transform whole sectors in ways that catalyze mainstream investment in BoP economic activity and unleash market forces. To get there, I think we need a more systematic approach.

A Next-Generation BoP Approach: Transformative Sector Models

In this and subsequent posts, I'm going to suggest one such approach that I and my colleagues at WRI and elsewhere have been developing for several years, and that we are now starting to take into the field. I'm proposing this scaling model tentatively, and asking for feedback and for comparisons to other scaling models.

The approach builds on the perception that there is a growing amount of public and private capital available to fund BoP strategies - almost every month now I hear about a new BoP private equity fund - and the conviction that the bottleneck is a shortage of solutions in the form of investable enterprises. In venture capital jargon, what's missing is the "deal flow." And I'm suggesting that the way to create that deal flow and unleash a rising tide of investment is to focus not on individual entrepreneurs, not on individual companies, but on economic sectors.

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

NextBillion.net - Development Through Enterprise - Taking Base of the Pyramid Strategies To Scale Pt.1: An Introduction to Transformative Sector Strategies - Comments

BOP Deal flow

Taking Base of the Pyramid Strategies To Scale Pt.1: An Introduction to Transformative Sector Strategies