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However, Surowiecki pointed out that most people aren't actually entrepreneurs, but employees, and that in economies where most people are neither, it makes more sense to invest in creating more opportunities for the latter. "What poor countries need most, then, is not more microbusinesses,"
Surowiecki wrote. "They need more small to medium-sized enterprises,
the kind that are bigger than a fruit stand but smaller than a Fortune
1,000 corporation." To that end, Omidyar Network is leading a $20.6 million first close of an anticipated $50 million to $75 million Ignia Fund I, based in Monterey, Mexico. Other investors include institutions from the U.S. and Switzerland and private individuals from the U.S. and Latin America. The fund is co-headed by Alvaro Rodriguez Arregui, a former CEO of Mexico's largest drugstore chain Farmacias Benavides and current chairman of the international economic development network Accion International, and Kohlberg Kravis Roberts& Co. veteran and Harvard Business School professor Michael Chu. It bills itself as Latin America's first social venture fund for commercial enterprises serving the poorest populations. Ignia is aiming for traditional venture fund returns, but with a strict entrepreneurial focus in targeting traditional institutional investors for the balance of its ambitious fundraising plans. Rodriguez said the founders concentrated on organizations like Omidyar Network, with what he termed a "double bottom line" of social impact and investment return, to get the first close, but is confident the fund can reach its final close this year with limited partners including pension plans, endowments and other traditional institutional investors. The news is similar to the announcement in February that Omidyar Network, along with Google Inc.'s high-profile Google.org philanthropic arm and billionaire-trader George Soros' Soros Economic Development Fund, were setting up a firm in India to invest in small to medium-sized businesses, and now Omidyar Network is anchoring a similar Latin American fund. With the India initiative, which only recently was given the moniker Song Capital (for Soros, Omidyar Network and Google), it is a little harder to make a black and white distinction between philanthropy and investment, because each of the backers makes both outright grants as well as investments. But Ignia founders are quite clear that the goal of the fund is to do well by doing good. Rodriguez says Ignia will focus on industries with the highest potential to improve the lives of low-income people, including healthcare, education, housing, nutrition and basic utilities such as water, energy and sewage. But he said due diligence will focus on entrepreneurs' ability to create profitable models that through scale will produce greater social and investment return in those sectors, rather than judging the extent of the social good of each individual venture. "We see the social aspect as a gatekeeper, rather than a grid," Rodriguez said. Omidyar Network director of investments Jim Bunch said the
investment in Ignia was made on the same basis as its individual
company investments, targeting startup companies with the promise of
high growth. He said that while the fund is experimental, he expects
managers to find investments with returns commensurate with risks and
to work as a traditional venture fund in helping companies
succeed. - Clifford Carlsen
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"All
people are entrepreneurs," James Surowiecki quoted microfinance Pied
Piper and Nobel Laureate Muhammad Yunus saying in a recent New Yorker 
