the hundred dollar business

Thanks to reader HS for pointing this one out: an organization called the Village Enterprise Fund. They seed microbusinesses with $100 grants.

After the entrepreneurs have done well with the initial $50 or $100 grant, they’re eligible for additional funding & loan programs.

They have “successfully launched more than 9,000 small businesses in developing countries since 1987. A staggering 75 percent of the startups have lasted at least four years, while more than a third of the entrepreneurs later launched second businesses.”

And that’s from a CNN article on the VEF as of 2005. Now they’re up to 12,000 businesses funded.

I really like that idea.

The Same Amount Of Capital Can Purchase 1 Startup or 12,000 Startups

For the price of one failed, funded startup ($1M), you can open doors for 9,000-12,000 potential business owners in a struggling economy.

Here are additional stats from VEF’s website:

• Total businesses launched to date: more than 12,000
• Total business partners to date: more than 60,000
• Total lives improved to date: 180,000
• 61% of the business owners are women
• 88% of the businesses are still operating at the one-year mark
• 75% of the businesses are still thriving after four years

The Sum-Up

Projects like this make me less grumpy about the resources we spend and squander so freely in the business world, particularly in the States.

It’s not only the huge amounts of capital wasted regularly when companies fail, but the opportunity cost that irresponsible or inexperienced business owners take away from others.

(I know that not all businesses fail because of poor choices or lack of business education & responsibility by the entrepreneur/owner, but too many of them do. And there are a lot of hardworking entrepreneurs who could really do something to stabilize economies given some decent funding.)

It looks very much like I’ve found something to be thrilled about! I’ve been stumbling around wondering what core value the Hundred Dollar Business concept can provide, and projects like Kiva and VEF give me some excellent direction.