33needs: A new platform to invest in social entrepreneurs is launched - YourStory talks to the founder Josh Tetrick
Is there a way to turn the traditional funding model on its head and connect social entrepreneurs to hundreds of thousands of micro-investors? 33needs, a first-of-its-kind crowdfunding platform for social entrepreneurs, is doing it. Imagine a social entrepreneur in Kenya or America who says: "I have an idea for a social enterprise focused on selling a low-cost, but technologically advanced water pump to farmers in developing countries: it'll be called the Oasis Water Pump." "How do I get started? How do I get this idea off the ground?" 33needs gives them a place to raise money from thousands of investors. In return for investing in the social entrepreneur, the investor gets a percent of the social enterprises revenue for a period of time and the social enterprise gets funding to make their idea happen. Josh talks to YourStory about the platform and the idea behind it.
Tell us more about 33 needs
33needs enables everyone to invest in social enterprises. The internet shifts power from institutions to the people. We're pioneering the idea of "people-powered investing" and flipping the standard funding model on its head.
We believe people will see 33needs as a portal to an entirely new impact-based asset class. Here's how it works:
In short: A 37-year-old man in Los Angeles, CA could invest as little as $10 in Husk Power Systems, a social enterprise providing low-cost energy services to rural India. A 19-year-old woman in LA could invest $20 in Voxiva, a social enterprise using cell phone technology to improve health-care delivery in developing countries.
The investor receives a percentage return based on company revenue. The company receives seed capital -- and the world gets just a little stronger. Here's a video that takes you through the process: http://blog.33needs.com/33needs-how-it-works
Overview of the 6 "Big Need" challenges, which social enterprises on 33needs are solving:
The Planet - How can we help promote a cleaner and more sustainable global ecosystem?
Education - How can we help more people get more access to better education?
Community - How can we help connect people, build communities and protect unique cultures?
Heath - How can we help individuals lead longer, healthier lives?
Opportunity - How can we help people better provide for themselves and their families?
Sustainable food - How can we provide for a growing population in a sustainable way?
To date, we have 114 ventures signed-up for receiving funding and over 21,500 people have registered for investing in them.
Aren't there platforms like this already?
Nope. We’re the only place where social enterprises can raise investment funding from everyone. 33needs enables people to invest (as opposed to donate) in social enterprises solving global challenges (as opposed to smaller, but very important, income-generating enterprises on Kiva).
Importantly, most of the social enterprises are raising between $15,000 - $20,000. The average size of a microfinance loan is $522.8 globally, according to MIX Market, a research group specializing in microfinance. Secondly, microfinance just isn't widely available in developed economies.
What functionality/features do you plan to have on the platform?
- Users can invest directly in social enterprises through their profile page
- Each profile page has tools to share, an entrepreneur pitch video, comment / advice integration, google maps and a social enterprise "watch" feature
- Each user on 33needs has their own portfolio to track investment progress
- Users can join investment communities of like-minded investors and invest collectively, as opposed to individually
What inspired you to build this?
"Why the light bulb?" a student once asked Thomas Edison. "I find out what the world needs, then I proceed to invent." Edison's answer guides how I approached the founding of 33needs:
I spent a lot of time working in the nexus of investment and development in Kenya, Ethiopia, Liberia, Nigeria, and South Africa during the past 5-6 years. During my time in Africa, I met hundreds of entrepreneurs with ideas for social enterprises, but little capital to take those ideas to scale. When I came back to the US, I spent a year traveling around the country speaking with college and graduate students about social entrepreneurship. I noticed the same problem: many ideas for social enterprises, but little capital to make them happen.
33needs is my answer to their problem.
How do you screen/list the social entrepreneurs that are going to benefit?
To date, 33needs has received 699 applications from social entrepreneurs around the world. We have a 4-person investment committee comprised of attorneys and investment professionals that review, interview, and select social enterprises.
We've received approximately 50% of the applications from social entrepreneurs excited to start their own ventures at 33needs, events on social entrepreneurship; most recently here: http://bit.ly/bqbaD0.
The other 50% come from a combination of directly reaching out to social enterprises and interest from articles and tweets (and retweets).
Regarding due diligence, each social enterprise is required to submit quarterly statements to 33needs that, at minimum, pass through a compilation stage of accounting review. Investor returns are calculated and debited monthly via ACH and pushed into each investor's 33needs portfolio. Every year at tax time, businesses will upload their tax return to the site to show their actual reported annual revenues to your investors.
Are the social entrepreneurs only from the developing world?
We support fundraising for social entrepreneurs in developed and developing countries. We just want to fund more social enterprises, whether in Mumbai, India or Michigan, US. Partnerships with organizations on the ground (morethanme.org in Liberia, for example) help us connect with social entrepreneurs that typically would not have access to online tools or knowledge of our platform.
We have entrepreneurs from Senegal, Liberia, US, Canada. India, South Africa, China, Peru, and Sudan as we launch.
Visit 33 needs here : http://www.33needs.com/