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Overview: Agora Partnerships

At Agora Partnerships, we envision a future that harnesses the latent power of the world?s best early stage entrepreneurs to grow businesses that can fight humanity?s most intractable problems: Poverty, inequality and degradation to our ecosystem.

Our mission is to create a dynamic, global community of impact investors, volunteers, supporters, and exceptional small business entrepreneurs united around one goal ? to accelerate the growth of small businesses in poor countries that have the most potential to create positive change for their communities and the world.

We believe in human potential for good. We believe the world needs more innovation and more companies focused on people, profit, and planet. We believe that people with optimism and purpose are the world?s most important resource.

We identify and support these people ? regardless of background or connections ? who represent society?s greatest chance of converting opportunity into economic and social progress. We help them at the most critical time when they need it most ? at the early stages of their careers when they are poised for growth.

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Our approach to development is different from traditional project-based, centrally planned approaches. We use technology, social and professional networks, and market signaling to connect entrepreneurs with the social, human, and financial capital they need to create a more sustainable world.

?Human Potential + Capital = Impact? is the equation that guides our work.

We look at impact in terms of social value generation (jobs, products or services that make lives better, economic growth, power of role models) and environmental impact (low carbon footprint, taking into account future generations in business decisions.)

Human potential means focusing our efforts on people with the vision, leadership and execution ability to make a positive difference in their communities. Capital is the fuel that unleashes potential.

There are three important kinds of capital all entrepreneurs? need. First, growth capital from private investment ? this is key and there is very little of it in the developing world for early-stage businesses. Second, social capital ?the relationships that support an individual or community, including the cultural norms and values that inform these relationships. Third, human capital ? the knowledge, skills and understanding leaders and teams use to make the day-to-day decisions that lead to success. When capital is brought to entrepreneurs who can use it to attack social problems it creates tremendous impact at very little cost to the public.

At our core (and in our name) we recognize the most effective and efficient way to create long-term, scalable impact is through ?partnerships?. In our history, Agora has incorporated hundreds of partners in the field of entrepreneurship development, social entrepreneurship promotion, impact investing, and social and economic development. Agora is a proud founding member of the Aspen Network of Development Entrepreneurs (ANDE), whose 120+ membership body has been instrumental in shaping an agenda for Impact Investors and technical assistance providers of Small and Growing Businesses (Sibs). We have consulted and worked with other organizations at the cutting edge of thinking about entrepreneurship and development, including the Clinton Global Initiative; the Draper Richards Kaplan Network; Ashoka; the Aspen Global Leaders Network; the Yale World Fellows Program; the BMW Young Leaders network; the Latin American Angel Association network; and the Young Global Leaders network of the World Economic Forum. Literally thousands of organizations, entrepreneurs, students, investors, and policy makers have contributed to building Agora Partnerships? thinking, culture, and scope of work.

For Rio we propose the Agora Accelerator Program.

Agora Accelerator Program

The Agora Accelerator is an intensive, 6-month program designed to give outstanding small businesses poised for expansion access to the social, human, and financial capital needed to accelerate their growth. It includes workshops, seminars, consulting, and mentoring in a variety of areas ranging from leadership development, to marketing, to investor pitch development, and culminates in an Impact Investor Conference giving participating entrepreneurs the opportunity to pitch to impact investors.

Agora?s Accelerator program builds on our work in ecosystem development and impact investment. The program?s mission is to help small companies in extremely poor, risky, not particularly entrepreneurial environments ? the kinds of places that scare away traditional investors or would-be entrepreneurs ? but that desperately need more innovative businesses.

We find the best, early stage impact entrepreneurs in Central America and Mexico and work to help them grow their business, attract growth capital, and maximize their positive impact on the world.

The Accelerator Program is designed to execute with these specific strategies:

1) Enhance impact entrepreneurs? opportunities for growth success by

a. Serving as a sustainable business leadership platform through coaching them on measuring social impact

b. Customizing the program to meet their development needs

c. Rigorously preparing them to meet investor expectations for due diligence

2) Build a self-sustaining community of impact entrepreneurs, mentors, partners, and impact investors by

a. Actively recruiting and engaging community members in mentoring, knowledge-sharing, coaching, and networking

b. Facilitating the development of long-term relationships between community members

3) Create a strong bridge between impact entrepreneurs and impact investors by

a. Serving as a capital-raising platform for entrepreneurs and as a pipeline for investors

b. Effectively matching entrepreneurs with investors

c. Remaining engaged post-investment through monitoring social impact and the investment relationship

4) Through the Agora Venture Fund (AVF), the first early-stage impact investment fund in Latin America and through our partnership with Thriive Capital, provide direct access to financing to the best Impact Entrepreneurs. Through these Capital initiatives, we are committed to growing the field of early stage impact investing and using our investor network to constantly improve the Accelerator Program.

Agora Accelerator Companies and Impact Entrepreneur Examples

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Agora Entrepreneurs have the vision, leadership, and execution skills to lead fast-growing, competitive companies in some of the poorest regions of the Western Hemisphere. What makes them different from mom and pop businesses, or even regular high growth companies, is their commitment to impact. Agora Entrepreneurs run companies that solve social problems. Their hope is to create something much bigger than themselves ? something that can materially make people?s lives better. They are bringing light to those without electricity and sustainable housing to those whose homes have been destroyed, or developing organic pesticide solutions that hold the promise of revolutionizing the region?s agricultural sector and supply chains that preserve and enhance the region?s resources. They do these things because they?re the right things to do and because it?s also good business. We support them because they represent a more efficient method to combat the scourges of poverty, inequality, and climate change than any other method we have seen.

Agora Entrepreneurs participate in the Accelerator program, measure IRIS-based social and/or environmental metrics, publicly report on them, and will be among the first entrepreneurs to be rated by the Global Impact Investing Reporting Standards (GIIRS).

Companies in the Agora Accelerator generate social impact with a productivity and efficiency rarely seen in traditional development programs. That?s because Accelerator companies use the power of business to align market forces in ways that deliver impact ? helping customers buy products that help local communities, creating jobs and opportunities for people struggling to feed their families, delivering products and services ? like housing or solar power ? that dramatically improve people?s lives.

One such company is CO2 Bambu. For marginalized populations living in Nicaragua?s most remote areas, living conditions are poor and stable housing is difficult to come by. To fill this void of adequate shelter, CO2 Bambu constructs sustainable housing using bamboo as the primary raw material. Maintaining bamboo farms as a means of capturing carbon is an integral part of their operations. In doing so, the organization creates a triple-bottom line model, creating economic, social and environmental good. In addition to addressing a greater portion of the base-of-thepyramid housing market in Latin America, CO2 Bambu are also demonstrating themselves to be a reliable partner in post-disaster reconstruction efforts, most specifically now by securing contracts in Haiti.

What keeps Agora, and the Accelerator program going, are the powerful missiondriven entrepreneurs, such as Ben Sandzer-Bell, founder of CO2Bambu, that bring business and social good together to create positive change. Another example of such entrepreneurs are Manuel and Juan, founders of Quetsol, who are motivated by the implication access to power has in terms of safety, business productivity and education, for those who, until now, have lacked it.

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Quetsol is providing renewable energy solutions (primarily solar-based) to the poorest, most remote regions of Guatemala ? communities that would otherwise lack access to electricity. Through innovative products and the latest technology, Quetsol satisfies energy needs in a sustainable manner at a lower economic, environmental, and social cost. Quetsol aims to bring light to the massive number of Guatemalan homes still without and then expand into other Latin American countries, where market and distribution dynamics are fairly similar.

At Agora Partnerships we believe that the single best way to fight poverty and inequality is to invest in such companies as the two introduced here ? companies with good business practices that are deliberately addressing social and environmental problems, and to support such entrepreneurs who have the vision, leadership, and execution skills to lead fast-growing, competitive companies in some of the poorest regions of the Western Hemisphere.

By providing holistic and integrated support, including using technology and social networking, Agora works to promote investment and education, and provide visibility and support to businesses that can drive sustainable development in their communities. Through programs such as the Accelerator, Agora is changing how people access opportunity in the world?s poorest countries and is accelerating the emergence of a strong community of successful impact entrepreneurs in Central America.

Areas where governments could help move the needle

There has been extensive research done around the world by such prestigious organizations such as the Kaufmann Foundation, ANDE, Technoserve, the Rockefeller Foundation, and others around the role governments can play to help promote a Culture of Entrepreneurship, and stimulate a dynamic entrepreneurial environment where financing and technical assistance are available. This is usually through a combination of public-private partnerships, business and industry group liaisons with public policy makers, and larger private sector groups, both foreign and domestic, that incorporate SGBs into their supply chains. Agora Partnerships has extensive networks of these organizations that have participated in this dialogue around the world and looks forward to making them an active part of this dialogue.

We are prepared to propose a group of people whose involvement can shape a dialogue focused on concrete actions to be suggested to a group of policy-makers and governments.

Some macro areas of support may include:

Promoting a Culture of Entrepreneurship

Small and growing businesses in developing countries are crucial for providing Employment, building supply chains, and spurring local consumption. However, a variety of factors, including closed business and social networks, and limited resources, often make it difficult to impossible to launch new ventures in the communities that most need them.

Problems of scale and risk have prevented the SGB sector from growing and created the ?missing middle? ? composed of small businesses that are too large for microfinance and too small for commercial bank loans. Agora Partnerships has worked tirelessly to understand the scale and risk problems, and has proposed concrete solutions like the Accelerator program, to attack these issues head-on. Much more work is needed, however, to scale these solutions to target markets across the SGB spectrum, as well as geographically. Governments need to understand that initiatives promoting the growth of start-up and early stage enterprises require more than just good policies at promoting exports, promoting macro-economic stability, or promoting foreign direct investment. One key issue to accept is the fact that some of these policies themselves are inherently risky, and do not always meet success themselves; creating a tolerance and positive feedback loop where failure happens is a systemic change that needs to occur. Israel, Colombia, Uruguay, and Chile are fantastic examples where government led initiatives have been key in stimulating early-stage business development.

In creating an environment where entrepreneurship can flourish, it is also important to celebrate entrepreneurial role models, particularly for women and under represented groups, and to create more support networks for entrepreneurs.¹ An example of such a form of celebration is The Sustainable Business Leadership Prize ? LIDERES ? that was launched in Nicaragua by Agora and various key partners to inspire a new generation of local impact entrepreneurs and investors. LiderEs celebrates impact entrepreneurs who, through their businesses, create social or environmental value for their community. Winners receive capital, media exposure, and free strategy consulting to increase their impact. Similar initiatives to celebrate entrepreneurship could be developed all over the world and could greatly benefit from government support and involvement.

Lastly, developing programs to teach children and adults of all ages about enterprise also plays a key role in fostering an entrepreneurial spirit.² In Latin America, where the majority of the students attend public universities, policy-makers need to ensure that state-run universities are committed to a strategy to foster entrepreneurship.³ Other institutions including technical training institutes, private foundations, business chambers, and civil society organizations must also become engaged in activities that nurture entrepreneurship.⁴

There are various ways in which governments could help support the advancement of small and growing businesses. Initiatives might be most effective in focusing on helping generate, and provide access to capital for growth both in terms of financial, as well as human and social capital.

Financial Capital

One approach to addressing the existing lack of access to financial capital is the development of new early-stage sources of capital, and more alternatives to the traditional commercial banks, offering both loan finance and support.⁵

A successful example of one such government initiative is the K (KreditanstaltfürWiederaufbau), a German development bank with a long experience in financing SMEs in Germany. 80 percent of its capital is owned by the German national and regional governments. It is one of the biggest providers of capital to MFIs and runs two key initiatives that indirectly help bring affordable capital to SMEs in the developing world.⁶

Another important component of this area is ensuring that the fiscal system is both stable and predictable, and that it does not disadvantage small companies, but aims

¹ ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009

² ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009

³ Kantis, Hugo., Masahiko Ishida, and Masahiko Komori. ?Entrepreneurship in Emerging Economies: The Creation and Development of New Firms in Latin America and East Asia?. Inter-American Development Bank. March 2002

⁴ Kantis, Hugo., Masahiko Ishida, and Masahiko Komori. ?Entrepreneurship in Emerging Economies: The Creation and Development of New Firms in Latin America and East Asia?. Inter-American Development Bank. March 2002

⁵ ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009

⁶ White, Jonathan M., Glenn Yago, and Daniela Roveda. ?Transatlantic Innovations in Affordable Capital for Small- and Medium-Sized Enterprises: Prospects for Market-Based Development Finance?. The German Marshall Fund of the United States. October 2007.

to use tax incentives to encourage them instead.⁷ New businesses can have easier access to working capital through deferrals or exemptions from tax payments during the early years of operations.⁸ Tax incentives can also effective in encouraging venture capital to invest in new firms and to encourage the creation of networks of informal private investors⁹.

The Inter-American Development Bank also identifies the following ?instruments that can be used to reduce the financing difficulties that entrepreneurs face when starting a new business:

? Reforms can be made in the capital markets to make it easier for venture capitalists to recover their investments.

? Systems to reduce the imbalances in the information available to investors are needed.

? The costs of bankruptcy can be reduced my means of guaranteed loans and restructuring opportunities for new businesses.?¹⁰

Human and Social Capital

While restricted access to financial capital has been widely acknowledged as one of the major barriers to growth for SGBs, there is still another major challenge, which may be less obvious but just as problematic: access to talent.

Finding great talent is an enormous challenge in poor countries where the workforce has not had the opportunity to get an advanced education. As an early-stage entrepreneur, assembling a team that will be able to help you accomplish your mission and drive your business can be a major constraint to growth. Even finding the right professional talent can be difficult ? lawyers, accountants, bankers, mentors, entrepreneur peers, (affordable) strategy consultants ? all of whom are key players in early stage entrepreneurship.

This area of developing, and enabling access to human and social capital covers a wide range of potential government action, including the formal education system¹¹, networks of advice centers designed to encourage the growth of small businesses¹²and the acquisition and development of talent to drive entrepreneurship.

One part of the solution could be creating talent funds where governments would subsidize a third party to bring talent to an organization as capital for growth, as

⁷ ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009

⁸ Kantis, Hugo., Masahiko Ishida, and Masahiko Komori. ?Entrepreneurship in Emerging Economies: The Creation and Development of New Firms in Latin America and East Asia?. Inter-American Development Bank. March 2002

⁹ Kantis, Hugo., Masahiko Ishida, and Masahiko Komori. ?Entrepreneurship in Emerging Economies: The Creation and Development of New Firms in Latin America and East Asia?. Inter-American Development Bank. March 2002

¹⁰ Kantis, Hugo., Masahiko Ishida, and Masahiko Komori. ?Entrepreneurship in Emerging Economies: The Creation and Development of New Firms in Latin America and East Asia?. Inter-American Development Bank. March 2002

¹¹ ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009

¹² ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009

opposed to investing financial capital. This third party actor takes on a risk by bringing top talent to a company that could not afford such talent on their own. However, in this proposed scenario, if the talent performs, the talent investor realizes a payback based on the achievement of previously agreed upon performance milestones. Meanwhile, the company has the benefit of working with top talent at an early stage of the business, and thereby has more of a chance to grow to a point where they are able to attract the right talent without a third party actor.

Labor laws also play a key role in the development of local talent and potential entrepreneurs. Laws should be designed to allow for efficient hiring and firing to enable optimization of talent acquisition, retention and development. They should also grant motivated individuals access to quality part-time Employment and even volunteering opportunities to start developing their skill set at an early age and despite time constraints such as simultaneously pursuing an education, raising a family, etc

Building the field of Impact Investing

Agora Partnerships has been committed from day one to building the field of Impact Entrepreneurship promotion and Impact Investing as key parts of an economic and social development strategy. With our support of over 4000 SGBs and millions of dollars of capital attracted to the sector, we have a wide range of experiences to contribute. More importantly, we are blessed to have built the global partnerships to propose action-oriented policies, and help local partners execute those policies.

Examples include the Agora Venture Fund (AVF); the Agora Accelerator Program; the founding of the Aspen Network of Development Entrepreneurs (ANDE); and the ecosystem development undertaken with USAID and Technoserve in Nicaragua to help launch and grow new and early stage ventures with social impact.

Programs such as AVF and Thriive have made significant contributions. AVF has made perhaps the smallest equity investments of any fund in Latin America ? as small as $25,000. Average annual sales for AVF companies at the time of investment are less than $200.000 with an average entrepreneur salary of about $12,000. The AVF has made a total of 11 investments in companies ranging from foot clinics to vegetable processing to shoe manufacturing.

Thriive is a unique and innovative program that makes interest-free loans to small businesses in the ?missing middle? ? too large for microfinance and too small for commercial bank loans. These loans are strictly allocated toward the purchase of machinery and equipment. Recipient businesses repay Thriive loans not in cash, but rather by donating in-kind products, services, and vocational training to the poor in their communities. The average loan disbursed is slightly less than $10,00, but the effect of the loan is enormous: on average, entrepreneurs hire 95% more employees after the loan is made.

The Thriive program is overseen and funded by the Arthur B. Schultz Foundation, who enlists field partners to disburse and monitor the loans. The partnership with Agora was formed in 2010, and in the last 12 months, Agora disbursed funds to five companies, and is anticipating extending funds to 10-12 new small businesses in the near future.

Recent Agora Accomplishments

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Accelerator Program Results

The first Accelerator in 2010 saw 9 companies as participants with total sales of over $2.5M in 2010 (averaging at $276,000). While in 2010, their companies were totaling 250 employees; the projected number of total employees for 2013 is 600 or more. The entrepreneurs were seeking a total investment of more than $4.2M. Within 48 hours of the first annual Accelerator Investor Conference, the Accelerator had helped catalyze over $3.5M in potential impact investments, and every investor who participated in the investor conference began performing due diligence on at least one of the companies presented.

The inaugural class of the Accelerator was composed of companies from four Central American countries, with the majority being located in Nicaragua. While their background and industry focuses varied, their intentions to grow their bottom lines while having a social impact in their communities are consistent.

Social metrics for the Accelerator 2010 captured salary increases, trees planted, KW/hrs produced with renewable energy, women and children impacted, low-income populations served, bank accounts opened, environmentally-friendly homes built, water saved and waste recycled.

Enterprise Development: Strategy, Networks, and Capital

? Business Consulting, Coaching, and Advice: Over 60 businesses received indepth, professional consulting, including 30 ventures matched to 213 volunteer business consultants, and over 300 entrepreneurs received coaching and advice. Over 30% of all entrepreneurs receiving support are female.

? Business Creation: 8 new businesses launched after consulting.

? Access to Growth Capital: 18 Agora-supported companies received financing, 8 directly from AVF and 10 from third party sources. Agora has attracted over $700,000 in growth capital to small businesses in Nicaragua.

? Sustainable Business Growth: 83% of start-ups resulting from Agora?s process were still functioning one year after launch and 91% of firms that received consulting from Agora increased sales in the last year. 64% of firms saw their sales increase by over 20%.

? Job Creation: An estimated 500 full-time jobs have been directly created or sustained by Agora-supported businesses (52% women, 48% men). Overall, over 1,000 indirect jobs have been created or sustained by suppliers and distributors of Agora- supported companies.

? Wealth creation: 51% average increase in profits in firms receiving consulting from Agora and a 36% increase in average wages in Agora portfolio firms.

Education: Creating a Culture of Entrepreneurship

? MBA Support: Over 200 MBA consultants have logged more than 10,000 consulting hours with Agora entrepreneurs. Additionally, Agora has hosted 18 summer associates and fellows in Nicaragua and 35 summer associates, interns, and volunteers in D.C.

? Seminars: Provided 53 entrepreneurship promotion and education events on topics such as corporate social responsibility, ?how to position your brand?, ?venture capital as an alternative source of finance?. Over 2,800 entrepreneurs have attended these events.

? Media Outreach: Developed Spanish language website and videos to educate entrepreneurs. Locally, Agora has promoted a culture of entrepreneurship through 70+ local, Spanish language media appearances and news articles. Internationally, Agora promoted entrepreneurship in Nicaragua through media coverage in publications such as Business Week and the Miami Herald.

? Business Competitions: Partnered with Citi Foundation, SNV, AVINA, TechnoServe and others to sponsor the LiderES business contest, the first prize for sustainable business leadership in Nicaragua. Agora has also been a key partner of Idea Tu Empresa, a TechnoServe-run business plan competition with over 400 participants in 5 years. Additionally, Agora staff members have served as judges and mentors in 8business plan competitions for small and growing businesses.

Building the Field

? Partnerships: Globally, Agora has played a central role in advancing the burgeoning community of organizations committed to development through entrepreneurship: Agora is represented on the Executive Committee of the Aspen Network for Development Entrepreneurs (ANDE); and with its colleagues, has participated in and presented a commitment to the Clinton Global Initiative. Agora is a proud partner of USAID, TechnoServe, the Rockefeller Foundation, and the Draper Richards Foundation, and has collaborated extensively with the Argidius Foundation.

? Network Building: Agora has also worked to develop networks and support systems among entrepreneurs within Central America. With support from ANDE?s Capacity Development Fund, Agora helped design and execute the first annual ANDE Latin America Conference to build the movement for small and growing businesses. Co-founder Ricardo Terán is a fellow in the Central America Leadership Initiative (CALI), giving Agora very strong connections to business and non-profit leaders in the region. Agora has also collaborated with Link Angel Investor Network in Costa Rica and ?First Tuesday?s?, an entrepreneur network in El Salvador. Agora recently founded the Women?s Entrepreneur Experience Exchange, which is working to create a strong network of female entrepreneurs. Agora is also an active leader in Nicaraguan Young Entrepreneurs Association and Emprende Nicaragua, a network of universities, non-profits and government institutions promoting entrepreneurship in Nicaragua. Agora participated on the planning committee of the Pathways to Prosperity Women?s Entrepreneurship Conference, hosted by the US State Department in Washington, DC, and organized and moderated the ?access to finance? panel. With City?s support, Agora will also be able to collaborate with Centro Empresarial Pellas on entrepreneur initiatives that promote business development in Nicaragua and strengthen entrepreneurship locally, particularly in the Tourism sector.

? B-Lab Sponsorship: Agora is a founding B Corporation. B Lab created a comprehensive assessment tool to evaluate a firm?s social and environmental impact on each of its stakeholders. Agora teamed up with the Rockefeller Foundation to adapt B-Lab?s method to small firms in developing countries.

Raising Awareness: Since its inception, Agora co-founder Ben Powell has been awarded the Dalberg I-Qube Award for innovation, impact, and inspiration in the development field; testified before the U.S. Congress on Poverty and Inequality in the Americas; and been profiled as an innovator in Milken Institute report ?Transatlantic Innovations in Affordable Capital for Small- and Medium-Sized Enterprises: Prospects for Market-Based Development Finance;? Co-founder Ricardo Teran has been selected as a finalist for the John P. McNulty Prize, which awards young leaders making lasting change in their communities.

Annex 1: Entrepreneur Spotlight:

Examples of Successful Impact Entrepreneurs ? Agora Accelerator Program

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Annex II Works Cited

Kantis, Hugo., Masahiko Ishida, and Masahiko Komori. ?Entrepreneurship in Emerging Economies: The Creation and Development of New Firms in Latin America and East Asia?. Inter-American Development Bank. March 2002

White, Jonathan M., Glenn Yago, and Daniela Roveda. ?Transatlantic Innovations in Affordable Capital for Small- and Medium-Sized Enterprises: Prospects for Market-Based Development Finance?. The German Marshall Fund of the United States. October 2007.

World Entrepreneurship Forum. ?Encouraging social and commercial entrepreneurship: What can governments do?. Proceedings of the second World Entrepreneurship Forum Lyon, November 2009