Village Capital uses the power of peer support to shape world-changing enterprises and the way investment in them is made.
The Problem
Despite the promise of impact investing, the world is starved for investable enterprises. While an estimated $50 billion worldwide is under the management of over 300 funds dedicated to impact investing worldwide, funds cite lack of investable enterprises as their biggest barrier to success. Current models for supporting and investing in seed-stage entrepreneurs are rare and expensive.
The Village Capital solution: What if entrepreneurs could invest in each other?
Inspired by the concept of the “village bank” in microfinance, Village Capital programs enable entrepreneurs to educate and accelerate one another’s ventures through an accelerator program that puts capital in the hands of the participants themselves. Entrepreneurs can leverage help from individuals rooted in practical experience and gain a network of like-minded leaders to reach scale.
Program update: In the past 12 months, Village Capital has achieved the following milestones:
- Launched the model: five new programs (Mumbai-Dasra, Bay Area-Hub, Orleans-Idea Village, London-Merism Capital; São Paolo-Artemisia)
- Companies gaining traction: 137 participants have raised $9 million in investment post-program (despite an average time of 9 months post-close) creating 300 jobs and serving 4,000 customers
- Program expansion underway worldwide, with a proactive focus on emerging markets:
- In partnership with the Monterey Institute for International Studies, Village Capital has managed six MBA students through 6-month placements in target emerging market sites (Chennai, Mumbai, São Paolo, Beirut, Cairo, Ecuador) and will manage ten more in the spring.
- In October 2011, Village Capital will launch a contest sponsored by the Aspen Network for Development Entrepreneurs and Potencia Ventures to select two sites in emerging markets for programs in Spring 2012.
- Enabling women entrepreneurs: by percentage, women are three times as likely to receive investment as men; one entrepreneur testified that the program’s emphasis on substance over style disproportionately benefits women in business
- Industry recognition: Winner of the NextBillion Case Study Competition; featured in New York Times, Wall Street Journal, Inc. Magazine, and as the #1 Trend to Watch on change.org; highlighted two of the five most-attended panels as well as the keynote address at the 2011 SoCap Conference.
- Developed a repeatable model. Organizationally, Village Capital has developed a standard “franchise template”, including repeatable, tested curriculum, for rapid organizational expansion.
Village Capital enterprise success:
- Drop the Chalk, founded by a techie-turned-teacher, uses performance assessment to accelerate education reform. Clients include KIPP and Teach for America; the company has raised $750,000 in follow-on capital from Investors Circle and Calvert.
- TerViva Bioenergy has developed a biofuel 10% the cost of ethanol. They have raised over $3 million in follow-on funding.
- Jack and Jake’s is building a sustainable agriculture wholesale model through a 200+ farmer supply chain. They have raised $300K from Keller Enterprises, an agriculture fund.
- India-based SABRAS has increased the income of salt workers making less than $1/day by 300%.
- Kopo Kopo enables enterprises accept payments from multiple mobile money providers in Africa. Their pilot facilitated the first mobile microfinance payment in Sierra Leone.
- Milaap is a crowdfunding platform that allows individuals to finance innovative projects and products through small-scale loans. To date, Milaap has facilitated over $10,000 in microloans.
- MobileWorks enables people living at the base-of-the-pyramid in India to perform small-scale outsourcing tasks on their mobile phone for Western businesses. They have raised $1.3 million in investment and have also graduated from Y-Combinator.
Impact and Growth Metrics
- “Without Village Capital, we would not have been investable.” Jen Medbery, CEO, Drop the Chalk
- “I found pitching my peers a dose of reality: they are a tougher, and more helpful, audience than any investor.” Anoj Viswanathan, co-founder, MILAAP
- “At the start of this program, I wouldn’t have invested in any of them. Now, I’d invest in 10-12.” Sean Foote, Partner, Labrador Ventures; director, West Coast Village Capital
| Metrics | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 |
| # of programs (aggregate) | 4 | 10 | 24 | 52 | 94 | 144 | 210 |
| Enterprises vetted (annually) | 500 | 600 | 1,300 | 3,400 | 6,900 | 10,100 | 16,700 |
| Enterprises served | 81 | 90 | 184 | 368 | 568 | 680 | 768 |
| Enterprises funded | 12 | 14 | 30 | 60 | 90 | 110 | 120 |
| Partner investors (aggregate) | 0 | 3 | 21 | 63 | 126 | 201 | 300 |
*Projections based on the Village Capital pilots and the Gray Matters Capital and GGV-DOEN portfolios.
Direct capital invested: $2.1 million to date; $22.6 million by 2016
Jobs created: over 300 to date; over 5,500 by 2016
Additional capital leveraged: $9 million to date; $136 million by 2016; $2.2 billion by 2020
