What barriers might hinder the success of your project and how do you plan to overcome them?
Our target market, early-stage entrepreneurs are inherently risky.
We are specifically targeting an asset class - early stage entrepreneurs with revenue of under $1 million operating in Central America - that is inherently risky and that has a particularly hard time accessing any kind of capital, whether it be social, human, or financial. We are convinced however, that this class of entrepreneurs has perhaps the largest development impact per dollar invested. Our entire model is designed to lower the risk for investors to invest in great companies by eliminating information asymmetries, providing leadership development, building social capital (which we did during our Entrepreneur Retreat), and implementing a rigorous investment readiness training.
After launching the first early stage impact investment fund in Latin America (Agora Venture Fund Nicaragua) and making 11 investments, we believe we have a good understanding of investor needs and the risks inherent in early stage investing in the region. We've used the lessons learned from our nearly six years of experience working in Central America to work to overcome the barriers that prevent impact capital from flowing to talented entrepreneurs.
In order to help ensure Agora companies are investment ready, we have hired two full-time Fellows - one with banking (UBS) and the other with management consulting (Accenture) experience to help coach and prepare the companies for our upcoming Impact Investor Conference. This preparation includes creating an Investor Packet that documents a thorough due diligence for each company, a preliminary "light" accounting audit by KPMG and a legal audit by Arias y Munoz to identity any potential issues for investors. It also includes training on social media, best practices in governance and business operations, and how to pitch their business effectively to investors.
Another key challenge for us is finding the best talent. We accomplish this through our brand in the region, a network of dozens of sourcing partners who help us find the best companies, and, increasingly, from current and former participants in the program.
Lastly, like most growth stage entrepreneurial non profits, we have a limited amount of capital to invest in our own human capital. Currently, we are leveraging the equivalent of $250,000 in pro-bono resources. This includes the hiring of a full-time Senior Advisor, a Social Media expert of the Central American region, and 6 MBA-level employees. We have been able to attract incredible talent to work for us, but to retain them longer term and to grow we will need additional capital.
Tell us about your partnerships
Agora has partnered with some of the world’s most innovative and respected organizations committed to a more just and sustainable global society.
Partners have strong relationships with local businesses, organizations, and individuals close to the market. We offer our partners an opportunity to deeply integrate and engage through the whole process-from entrepreneur selection to business evaluation and projections. This strengthens our partners’ commitment and the quality of our program.
The Accelerator has three kinds of partners, each providing critical elements to the program:
Sourcing partners help find and identify outstanding talent for the Accelerator. Sourcing partners know exactly what the Accelerator is looking for. The chief responsibility of sourcing partners is to nominate candidates for the Accelerator and disseminate information about the Accelerator and impact entrepreneurship/investing throughout their networks. Examples: Ashoka, AVINA, FUSADES, and Vital Voices.
Operating partners provide direct training, services, or human capital to participants currently in the Accelerator program. They fill a variety of roles, from helping companies measure their social and environmental impact, to delivering training, providing mentors, and helping the Accelerator operate effectively in the local environment. Operating partners benefit from exposure to new tools and concepts within the impact investment community.
Examples include B Corporation, GIIRS, KPMG, Ashoka, Arias y Munoz (law firm)
Investing partners (including angel investors) help drive local and global investment into Accelerator companies. Investing partners are impact investors interested in obtaining deal flow for companies that have been vetted for their ability to create significant financial, social, and environmental impact and whose management shares their values for using business as a force for good. Examples include ANDE, Investor’s Circle, PMYE Capital and Toniic.
Explain your selections
Agora Partnerships is a 501 (c) 3 non-profit. Approximately 65% of our organization is supported by foundations and NGOs. These organizations include: The Rockefeller Foundation, AVINA Foundation, Draper Richards Foundation and Ashoka. Individuals provide a substantial support to the organization - approximately 15% of our current budget comes from hundreds of individual contributions.
How do you plan to strengthen your project in the next three years?
Agora is constantly striving to improve program quality and has identified two focus areas for the next three years. First, because Agora is completing its inaugural Accelerator class cycle this summer there are many lessons learned to be implemented for the second class. These lessons were identified by regularly seeking feedback from our entrepreneurs, investors, and other stakeholders on how to make Agora services and events more valuable. We are also revising our Accelerator application process, both by talking to the Agora entrepreneur community and by looking at the application processes of developed world accelerators including TechStars, Y Combinator, and Startup Bootcamp.
The other major focus area is the financial sustainability of the program. Currently, Agora charges each entrepreneur $2000 USD to participate in the program and takes a 2.5% fee from any investment deal that results from participation in the Accelerator program. Looking forward, Agora expects to be able to increase the fee it charges entrepreneurs as the program gains visibility and recognition within the region as a high value activity that leads to dramatic growth. Additionally, Agora is exploring ways to enable less professional investors to connect to impact entrepreneurs, and expects that it will be able to capture 10-13% of capital invested by individuals. As the program scales, Agora expects greater financial sustainability through economies of scale.