InVenture Fund invests, businesses reinvest, community grows
While surveying microfinance clients in India , Shivani Siroya realized that these micro-business owners were not happy with the services they were receiving. Interest rates were high; paying back loans was causing a lot of stress and limiting their potential. With a background in investment banking, health economics and policy, and microfinance, Shivani set out to create a new opportunity for entrepreneurs in developing countries: a chance to grow their own businesses loan-free, reinvest profits, and make real change in their own communities. Through InVenture Fund, which provides capital and business training to these underserved entrepreneurs, Shivani hopes to unleash the real power of small and growing businesses by removing the obstacles faced by entrepreneurs. An investment portal on InVenture’s website allows anyone to contribute capital—in any amount—to InVenture’s businesses. Shivani stresses the importance of providing capital, and not loans, to allow these businesses to flourish. Partnered with local NGOs and MFIs, InVenture then works with the businesses to improve their model and increase impact. Eventually, the investors receive a share of the profits along with the principal amount. Even more significantly, 3-5% of the business’ profits go right back into the community through the concept of reinvestment, allowing the entrepreneur and business to address social issues in the community around them.
InVenture kicked off in October 2009, but already is working in four countries (India, Mali, Ghana, and soon Mexico). The online portal opened in April 2010, and already has many InVestors opening accounts. In India, InVenture partners with ASSCOD/Green Microfinance. When working with local partners, InVenture takes a look at their current client list, identifies people with at least a 96% repayment rate, studies the industry in which the entrepreneur works, checks of the consistency of cash flows, and also considers the personal background of the entrepreneur. Through this due diligence, InVenture provides assurance to investors that they are placing their money in sound businesses.
InVenture hopes to fund 100 businesses by the end of 2010, and are also launching a fellowship program in June 2010 to further strengthen their businesses and continuously track their progress on the ground. Through the cycle of investment and reinvestment, InVenture Fund hopes to empower businesses to address poverty at a grassroots level.