This is a letter that I sent out after receiving bad news concerning the denial of funding, for one of the groups we consult.  I felt that it could be timely for everyone in these terrible economic conditions.  Let me know what you think.

Everyone,

Sometimes our lives seem to have been written by someone who wants to measure how much adversity we can overcome.  To be sure, yesterday was a major setback and a low point in the history of the organization, but we should remember that, in the midst of our current situation, “adversity reveals genius [and] prosperity conceals it.”

The [organization name omitted] has prospered for a while without having to focus on sustainability, and this has caused the stability of the organization to ebb and flow like the tides.  It is now clear that we must remain steadfast amidst these turbulent waters. We can allow these obstacles to threaten and derail us from our course and our mission and leave us feeling aimless and apathetic.

“Real life isn’t always going to be perfect or go our way, but the recurring acknowledgment of what is working in our lives can help us not only to survive but surmount our difficulties.” Yesterday we voted. We chose a path that builds upon our strengths and acknowledges our weaknesses. This is the time to move forward; it is the time to focus our efforts, and while our supporters might see that we are down, they should also know that we are not out. These are the moments that define us and test our strength. If you see someone that is discouraged, a few kind words can go a long way.  Giving a hug, a high five, or a note can keep someone going, can lift them to meet the challenges ahead. We need to make the effort and set aside the time to focus and to keep our eyes on the prize during this difficult time of transition.  I feel privileged to know that I am not alone in these tumultuous times; instead, I am joined by such a wonderful group of people whose dedication and commitment are unshakable given the setbacks that we have faced. I am grateful to all of you. Remember that while these moments might be trying, it is important to recall—to borrow from our motto—that it is only through problems that opportunities can be uncovered, realized, and applied towards a brighter future.

In a 5 x 7 foot cubicle, I sat and contemplated doing laps around the office to stay awake.   I look around and wonder at what point I went from a Peace Corps volunteer, helping people at the “BoP” in Togo, to corporate paper shuffling.  Abruptly, a phone call brings me to attention:

“Brrrring…”

“Hello?”

“Bonjour mon frère! How is America?” says the voice, the last bit in choppy rural Ghanaian English, sprinkled with a heavy francophone inflection.  I know this voice: many a meal, calabashes of millet beer, and market days were passed with this former co-worker.

“Salut grand frère! I’m great how are you?” I respond, surprised at how quickly the French sprung to my lips.   We speak about his day and quickly get into the adventures of a microfinance loan agent in rural Togo.  Soon, the conversation begins to focus upon me and what I am doing.  I tell him I am bored out of my mind, and ask him if he gets bored in work.

“Oui, Oui” he responds “But only when I farm.  I work for the community at the microfinance, so I love that job.  When I work on the farm, I can only think about my work with the microfinance.  Because of this my attention is divided and I am not a very good farmer.   Whenever I’m farming, I just can’t wait to get back to helping the community.”

Afterwards, as I sat and thought about our conversation, questions surfaced in my mind.   Fundamentally, we all must make sacrifices in life, especially when what we would like to do does not pay the bills.  This bothers me. I’d like to know what type of world would we live in if we were free to pursue social goals just as easily as we pursue financial ones. What if we could develop a network of professionals, volunteers, philanthropists, VC’s, and the disadvantaged (socially, economically, physically), who were focused on supporting and sustaining an individuals’ social passion?  Having more questions than answers, I knew this was something that had to be shared.

From that phone call, SOLVE was born.  The concept was a system which would free employees to do what they are most passionate about.   A company where reciprocity, profit, and the creation of social value are not casually tossed together, but intrinsically linked.   While the idea appeared to be a good one, it wasn’t yet a business model.   Thinking of some of the basic systems I learned in Togo, I began putting 2 & 2 together.

The “tontine” is a system of savings or simple banking for a group of 10 – 30 individuals.  Each person must contribute a previously decided amount of money into a communal pot each week. Through the drawing of straws an order is created among all individuals in the group.  Each individual takes the total contributed from the group on their scheduled week of the entire cycle.  In this manner, every person benefits from the savings of their peers.  In a similar labor-based system, farmers rotate from farm to farm during the harvest season to help their neighbors work their land, knowing that they will receive equal treatment when their time to harvest arrives.

Based on this concept, the SOLVE Venture Fund model or “equal dream opportunity” (EDO) business model allows disadvantaged social entrepreneurs, or social businesses targeting them, to invest small amounts of time to help consult a social business within the SOLVE community.  These time investments are given at an agreed upon value of “sweat equity.” Once an individual has completed the time required, their passion will be entered into the pool to be vetted.  If the social business shows it can be profitable, socially and financially, the organization will be given access to venture and human capital on a predetermined schedule.  Since all the capital given is valued, an equity stake is generated within the new venture.  As the new social venture grows, it pays back the SOLVE Venture Fund a percentage of its profits or a determined SROI.  These payments will bolster the SOLVE Fund, which will also help it secure financing from foundations, thereby allowing it to launch additional social businesses increasing the SOLVE “social portfolio.”

When we harness time, creativity, and varied expertise to cultivate innovative ideas, what change can we bring about in our societies? Could we reinvision the value of incarcerated persons?  Could we challenge the youth to change their world? Could we finally break free from the paternalism of charity?  It is time for all people with social passions to unite, and leverage our collective knowledge towards our greater common goal: developing the infrastructure to improve the quality of life for everyone on the planet.

The next step in this series – “The Cooperative of the Minds” – looks at how systematic partnership will construct a working framework for the social enterprise sector. Throughout the series, we will also attempt to carefully analyze the obstacles to creating this project.  We strongly encourage your comments, questions, and criticisms as we develop this series: we need your insight to give this model wings

SOLVE (Solutions and Opportunities through Leadership, Vigor and Entrepreneurship) is a for profit “impact investing” venture fund which enables consumers, micro-venture capitalists, and foundations the opportunity to invest within social businesses in the start-up phase.  SOLVE only invests venture capital within social enterprises which have the potential to be replicated in other markets and come from disadvantaged social entrepreneurs, creating extended profits and exponential community change.

SOLVE is a registered Vermont  L3C and certified B Corporation

Mission

SOLVE  seeks to lower the barrier of entry for undeserved groups into the Social Enterprise field by offering venture capital to promising disadvantaged social entrepreneurs.

What are “Micro-Venture Capitalists”?

Crowd Financing is an approach to raising the capital required for a new project or enterprise by appealing to large numbers of ordinary people for small donations.  These ordinary people who provide the financing are micro-venture capitalists (MVC’s). Unlike traditional venture capitalists (VC’s), these MVC’s are typically not high net worth individuals, but through the crowd financing method can pool their financial resources together to have the same investment potential as traditional VC’s.

Who do you target for funding?

The SOLVE Venture Fund targets social entrepreneurs coming from the “base of the pyramid”( BoP ) like the urban poor, or individuals not even on the pyramid like the incarcerated.

OK, I want to invest.  How does it work?

The SOLVE Effect

Besides peer to business micro-investment, how does the SOLVE Venture Fund grow?

SEE-Store

Like most ideas, our big idea was simple.  We thought; why not use the wisdom of Timothy Ferriss and the automation business model to begin a social business?  Our on-line “SEE-Store” (Sustainable Enterprise Electronic Store) does just that.    We partner with organizations who are doing great things around our global community like; Sseko, Peace Oil, and Canned Water 4 Kids and lower their costs to reach new sales markets.  We then invest 50% of the profits into the venture fund. The other 50% is split amongst our employee cooperative.

Foundations

Foundations help SOLVE by giving directly to the SOLVE Venture Fund.  As a L3C, we are able to receive funds from foundations through the  PRI clause in the IRS Tax Code.  PRI or “program related investments,” are those that further a foundation’s tax-exempt activities. Foundations need only to request what type of  SROI goals  they would like to gain, and SOLVE directs those funds to a corresponding venture in our social portfolio.  Currently, in association with the Engaged University and other local partners, we are exploring investment opportunities directed at childhood hunger and obesity, urban farms, environmental justice,  and bio-diesel.

What’s next?!

  • We would love to hear from you!  Drop us a note if you’re interested in partnering, consulting, or interning at info@solvecoop.com .
  • Biodiesel in the inner-city blog post coming soon.
  • Video pod-cast “food deserts in Washington DC” coming in August
  • “Ghetto Vs Favela-Why  social entrepreneurs from the USA are choosing to launch international ventures over staying local” blog post (August)
  • Prison Social Business Plan Competition (TBA)
  • Website launch!  Sign up here for a sneak peek!
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