Entrepreneurship has the potential to transform society and spur dramatic social change. Yet in emerging markets across the world, entrepreneurs solving global problems struggle to get the early funding they need to get an idea off the ground. This is the “Pioneer Gap”.
Village Capital recently launched VilCap Communities, a new initiative to bridge this gap. We gathered the top investors, foundations, and institutions who are investing in the “rest of the world”, for a conversation in Amsterdam.This is Part One in a three-part series on what we learned. (Read Part Two here and Part Three here)
Entrepreneurs across the world have great ideas. But many entrepreneurs are at a significant disadvantage when it comes to building their business — just because of where they live.
In Kenya, Malele Ngalu dreamed up a mobile, text message-based platformdesigned to provide timely health information to new and expectant mothers.
In Pakistan, Madeeha Hassan is developing a carpooling service tailored to meet the safety needs of women (tagline: “Never Ride Alone”).
In India, Rama Siva is creating jobs and access to solar energy by training entrepreneurs and engineers to install solar power in her country, playing her part to spark an energy revolution in one of the world’s most populous countries.
Each of these entrepreneurs is succeeding despite great odds, because of a simple fact: the vast majority of mainstream venture capital flows to a small number of entrepreneurs, solving first-world problems, in a few cities around the world. Fifty percent of the world’s venture capital dollars are invested in just 6 US states. What’s more, a 2012 study that surveyed more than 300 impact investors — the type that would invest in entrepreneurs like Malele, Madeeha and Rama — found that the vast majority of investors focus only on larger-dollar investments; less than 10 out of the 300 investors regularly made investments of $250,000 or less.
VilCap Communities Global is an effort to solve this problem by enabling great leaders around the world to build the critical infrastructure — business assistance programs, incubators, accelerators, seed funds, and more — that every thriving ecosystem has in droves. After announcing the initiative in December, Village Capital reviewed applications from 60 entrepreneur support organizations around the world, and selected eleven to participate in VilCap Communities’ Pioneer class.
Each of the Pioneer leaders has committed to “Three C’s:
· Community: Operate a formal program for entrepreneurs in their target community over the next 12 months
· Capital: Through this program, invest at least $50,000 in local entrepreneurs, using Village Capital’s peer-selected investment model
· Commentary: Gather data on entrepreneurs coming into each program and share best practices with other Pioneer leaders.
The first class of Pioneer leaders is below. These communities are working to support entrepreneurs like Malele, Madeeha, Rama by providing them with access to the training, networks, and initial investment capital necessary to succeed — and sharing lessons among themselves. We’re excited to work with them and help them grow.
VilCap Communities’ Global Program: Pioneer Leaders
Sangam in India, which supports entrepreneurs enabling renewable energy to the 300 million Indians who live off the electricity grid;
Pomona Impact in Guatemala, which supports innovators building better food systems in central America, where one in three children are malnourished;
Invest2Innovate in Pakistan, which is improving health outcomes in Pakistan, only one of three countries, for example, with endemic polio;
Emerging Markets Entrepreneurs in Myanmar, which is building affordable goods and services for the two-thirds of Myanmar that lives on less than $2/day;
Chanzo Capital, which is helping fuel the mobile/ICT revolution, increasing financial inclusion, education, and health outcomes for the poor in the KINGS region (Kenya, Ivory Coast, Nigeria, Ghana, and Senegal);
Spark International, which provides young innovators with their first investment in Kenya, Bangladesh, India, and South Africa, and democratizing the way people invest in entrepreneurs;
She Leads Africa, in Nigeria, which is helping change the way the world invests in women entrepreneurs across Africa;
Wennovation Hub, also in Nigeria, which is sparking entrepreneurs leading fintech and agriculture revolutions across the country;
ImpactAmplifier, in South Africa, which provides end-to-end ecosystem and investment support to entrepreneurs solving health challenges in South Africa, from idea until commercial financing;
Kinara Capital, in Indonesia, which enables financial inclusion for the 150 million Indonesians who live without regular access to formal financial services; and
Kiwa, in Ecuador, which provides more sustainable solutions in agriculture and energy to a region that is losing 3% of its forest cover every year.
Check back tomorrow for lessons learned from the VilCap Communities launch in Amsterdam!