This is Part I of a two-part series with Shivani Siroya, Founder of InVenture Fund. In this interview, Shivani talks about the origins of her micro venture capital organization and explains how her work in investment banking and health economics influenced the development of this new model.

In addition, Shivani shares the story of a successful pilot program in Bamako, Mali, as well as some background on how InVenture Fund works and how partners are provided with incentives. By helping businesses to grow, InVenture Fund helps reduce poverty by supporting the growth of the what is often referred to in an economy as the “missing middle”.

For Part II of this interview, be sure to check out, “Part II: Interview with Shivani Siroya, Founder of InVenture Fund | Microfinance vs. Micro Venture Capital: How Do They Differ”.

Behind-The-Scenes: InVenture Fund

Katrina: So here I am with Shivani of InVentureFund. Thanks so much for joining, Shivani. What is InVentureFund, and how did you get started?

Shivani: InVenture Fund is an online platform that allows everyday investors to invest in developing businesses in developing countries or in the U.S.

Katrina: How do you differ from Kiva and other microfinance platforms?

Shivani: So we’re looking at people who have already gone through microfinance for the most part. We look at 1 – 3 cycles of microfinance as our client base. It’s not necessarily the poorest of the poor. This is that next graduation, that tier that goes after microfinance. It is that “missing middle” and group of individuals who now have that ability to expand and grow their business and then actually look beyond just themselves.

Katrina: Can you share some success stories from the field?

Shivani: I think a really great example is our program in Mali. We are partnering with Project Muso in Bamako, Mali. A story would be that the twelve women who are in our cooperative, the money that they’ve made through the profits of their textile business enabled them to fund another hundred people having access to the health care clinic in Bamako. Now they have this recognition from their community. It’s that they did this. It’s not that an outside service came in and provided the aid to grow the clinic. It’s actually the women themselves.

Katrina: How do you identify partners?

Shivani: We kind of have a very strict due diligence process. It’s very rigorous. We’re actually asking them now to track these investments for us, really track the growth of these businesses. Every player that’s involved is incentivized by how well this business owner does. So in picking our partners, we have to ensure that our partners agree with that mission. We make sure they have a lot of financial tracking systems on the ground. We also look to make sure this is not a very small microfinance or NGO, and that they have it running for at least five years – and there also not a huge microfinance institution or NGO because then they may not take the time to really work with our clients.

Katrina: How do you provide incentives to your partners? And can you provide some examples of ways in which you incentivize your partners? What does that look like?

Shivani: So when we initially start working with them we do give them a flat fee to begin working on our model per client. And then at the very end of each cycle, we actually give them a portion of the profits. So just as InVentureFund would get paid through the profit-sharing model, the MFIs are also getting a portion of those profits. They are a non-profit institution for the most part, so this is a new source of income for them too.

Katrina: (InVentureFund’s model requires loan recipients to invest in their local community.) The entrepreneur that is invested in has to invest in their own community: what percentage or portion of their proceeds goes toward those social services?

Shivani: We kind of leave it open to being between 3 – 5%, depending on the size of the business. But right now, everything has been 5% across the board.

Thank you, Shivani, for your time to meet for this interview.

Shivani Siroya | Founder, InventureFund

About: InVenture Fund is a micro venture capital fund that empowers businesses to lift their communities out of poverty. Website: www.In VentureFund.org

Human trafficking, according to the United Nations, involves an act of recruiting, transporting, transfering, harbouring or receiving a person through a use of force, coercion or other means, for the purpose of exploiting them. In essence, human trafficking is modern-day slavery, most often sex slavery, and to a lesser degree, forced labor and other forms of slavery. A recent report by the U.S. State Department indicates that approximately 12.3 million people (mostly women and children) worldwide are victims of sex slavery, and forced or bonded labor each year. The current recession is boosting global human trafficking, according to this report.

How does a company like Lulan Artisans prevent human trafficking? How can design and textiles help build communities, create jobs, provide health care, & provide education? In this interview with social entrepreneur Eve Blossom, founder of Lulan Artisans, Eve shares the story of how she started her social enterprise. Eve explains that by creating jobs for over 800 people in southeast Asia, Lulan provides critical economic opportunities that help prevent the desperation that often leads people to fall into human trafficking.

The Full Transcript:

Katrina: Here we are with Eve of Lulan Artisans. [What is the story of Lulan Artisans?]

Eve: I was lucky enough as an architect to be able to live and work and travel throughout Southeast Asia. And meet these weavers, artisans, and saw the quality of their work and the incredible techniques they used. And how sustainable they were because they use this process they’ve used for centuries. And I thought, what they’re lacking is actually the skill that I have – which is design and understanding other markets and distribution and understanding what would sell in the West, and also understanding the fresh, trendy color ways, and contemporary designs. So, I decided that we could actually partner, and create a really great economic opportunity for these artisans.

It took many years for me to start my company, because they were not ready, the market was not ready, and I was not ready. So I actually went to business school, and I would do my research, and I would get back to them and see where they were, do they understand duty, do they understand importing, do they understand exporting, do they understand dye lot issues, deliverables.

We started working together, and I decided I would launch my company. I really looked at the market, and decided around 2003-2004 that the market was ready. So I did a collection with these textile consultants and we started the business.

Katrina: Can you share a little bit about the artisans who you work with? How did you find the artisans?

Eve: What we did when we started the company we started working in four different countries: we are in Cambodia, Laos, Vietnam, Thailand, and then we added India, since we launched. And we’re working with now over 800 spinners, dyers, and finishers. This is hand-woven, high quality, low-impact dyes that we use.

The artisans – how I found them was over a long period of time because I was researching the market, how to work with them, and if the market was ready. And in doing so, I would collect these cooperatives names and I would go through other NGOs and nonprofits and I would find them. And over the years another village or town would say, “you should look at this group.” And, I’ve built a really great relationship over the years with them.

Katrina:

How has this business over the years impacted the lives of the artisans you work with?

Eve:

I witnessed first-hand human trafficking – the sale of a young, little girl. That was when I was living in Asia. And it was at that moment that I realized that these artisan groups that I wanted to work with are actually at-risk of falling into human trafficking. And when I did the research of human trafficking, I realized that economic option is the key.

And you actually have to be in the villages, towns and the cities. Because there’s urban migration that’s happening, and people do come to the cities. And there’s certain places where there are these influxion points as we call it – and people can fall into trouble, right.

So when one group is moving from a town to a city, or a village to a city, they can get themselves into trouble. But there are opportunities to keep people in villages and towns, and not everybody wants to go to the city. So we believe in our business model, we need to be in all three places. So the countries that I am in , Cambodia, Vietnam, Laos, Thailand, and India, are countries with some of the worst human trafficking issues. So we feel those are the right countries to be in. And so what we believe in is just creating jobs, it’s just about economic options. And when you do that, we do it for the whole community.

So we’re not just hiring women. We’re hiring women and men, because they then see the value in it. The men are actually the dyers and finishers. And then when you do that, safety comes from a community, so you really want to make a community strong.

So we’re doing education for the kids of the weavers. We pay for the books, uniforms, and monthly fees. We also do housing allowances. And in some places we’re doing women’s literacy classes, day care, health care. We don’t do everything for all groups. We let them choose what’s meaningful to them.

Katrina:

And all these [community services] are supported by the sale of the products?

Eve: Yes, so we’re a for-profit social venture. And the reason we believe strongly in this model is that it’s the right model to teach the weavers and the artisans. So, for example, when they work with us they learn about market forces. They learn what sells in a market, why a color doesn’t sell. If a color is off, they understand that it doesn’t sell because it’s off. And they’re learning so much, they’re becoming so savvy.

You know, human trafficking is a marketplace. And unfortunately, the commodity is a person. So I decided to create an alternative marketplace in order to prevent human trafficking. We believe in prevention. That’s where we do most of our work.

Katrina:

Do you find that there’s a backlash from the human traffickers themselves?

Eve:No. Because all we’re doing is, it makes it better for the government, it makes it better for the country, all we’re doing is creating jobs. As long as we stay on the economic side, we’re fine. It’s just about job creation and community strengthening.

Eve Blossom, Founder of Lulan Artisans:

About: Lulan creates sophisticated contemporary designs in order to enhance the economic development and quality of life of the weavers, spinners, dyers and finishers they work with in southeast Asia. Website: www.lulan.com