NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

What’s big, red and innovative all over?? No, it’s not Clifford’s supremely creative cousin–it’s Entrepreneurship@Cornell.? A university-wide initiative, Entrepreneurship@Cornell is unique in bringing together students, faculty, alumni and outside experts across a range of sectors (hospitality, biotech, real estate, venture capital, law and more were all represented at the event I attended last week).? Other universities could learn from Cornell’s approach–a truly multidisciplinary program is hard to find in academia, so kudos to the Big Red for getting this one right.

I went to Ithaca last Thursday and Friday to participate in Entrepreneurship@Cornell’s annual celebration.? The 2 day event featured a gala dinner, entrepreneur expo and–of course–panel sessions.? Thankfully, the panel session in which I participated was well organized and expertly moderated.? (No coincidence here: the organizers–Steve Wang and Sara Standish–are Johnson School students and the moderator was Mark Milstein, a heavy hitter in the BoP space.)I thought Sara and Steve did a particularly good job finding representatives from distinct stages of the BoP continuum.? First to speak was Fernando Lima, founder of Florestas and a New Ventures entrepreneur.? Fernando holds a Ph.D. in economics from the University of Barcelona and has worked for many years in finance–but his passion is personal care products.? Specifically, Fernando is all about certified-organic products whose ingredients are sourced from Brazilian cooperatives.? Florestas’ new line–Ikove–just attained nationwide distribution through Whole Foods, which is the holy grail for any start-up company in the organics sector.

It was interesting to hear Fernando talk about financing.? Quite simply, he told the audience, it’s incredibly difficult for small and growing companies to get growth financing.? Florestas, which currently employs 8 and sources from around 10 cooperatives, needs about $2 million in bridge financing to capitalize on its current momentum.? What would he do with $2 million?? Fernando told me it was simple: more marketing, more production, more work with cooperatives, more sophisticated systems–maybe even more free time.? (I took the bus back to New York with Fernando after our panel; I asked him about his weekend plans.? He just smiled and said, “Florestas!” with the infectious enthusiasm of a true entrepreneur.)

Next to speak was Michael Hokenson.? An entrepreneur in his own right, Michael’s role in the panel was to speak about the importance of maturity in our sector.? He is the co-founder and Managing Director of Minlam Asset Management.? Minlam provides microfinance institutions with “innovative, customized local currency products.”? In short, Michael and his team allow microfinance institutions to access funds in local currencies, protecting them from exchange rate risk.

It was interesting to hear Michael speak after Fernando.? Like Fernando, Michael is an entrepreneur at heart–he has started a number of businesses, most recently Minlam, which only recently closed on its first $54 million fund.? Unlike Fernando, however, Michael represents the growing maturity of certain aspects of the BoP space.? That there would be a commercial local currency funder for microfinance institutions would have been unthinkable 5 years ago.? Yet MFIs are growing more and more sophisticated, and the need for institutions like Minlam (and MicroVest–which provides equity funding to MFIs)–is growing along with them.

I spoke last, representing Acumen Fund.? I think Acumen sits between Fernando and Michael on the BoP continuum.? The idea of venture philanthropy, investing in the missing middle and BoP development is still quite young, and there are no ’mature’ institutions in our space.? (Note: I am considering microfinance a separate movement here.)? We’re also looking to fund entrepreneurs like Fernando (provided they work in one of our four target sectors and are located in one of the 5 countries in which we work–a tough filter at best.)

Despite the sector’s relative youth, it was clear from the Q&A after our short presentations that the audience knew its stuff.? We spoke at length about the need for better legal documentation, standardized reporting metrics and lower-cost ways to manage investment pipelines, among other things.

Thanks again to the Johnson School for hosting me.? In addition to the panel, I was able to sit down with Erik Simanis–Co-Director of the BoP Protocol project at Cornell–while in Ithaca for a 2-hour interview.? I’ll be writing that up in the coming days–so stay tuned.?