Tag: Micro-funds

Micro-funds: Peer-producing Venture Capital (UPDATE 1)

Here’s my first crack at the Micro-Funds concept.  It’s related to the Social Venture Commons and Social Capital work I’ve been developing. They are all based on the new mode of organizing I see emerging.

*** I’ve also added an illustration of 3 alternative models that have emerged in recent conversations. They are all interesting in their own right and it may be more about using them in according to specific situations. All comments/suggestions/alternatives welcome. ***
Micro-fund Model Alternatives

Ping me directly if you are interested in learning more – and if you have comments on the presentation below please add them to this post.

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Micro-funds and the Social Venture Commons

Working with the building blocks for a new kind of venture capital I’ve been shaping a couple of core components – micro funds, and the social venture commons.

Micro-funds: making small, flexible, intuitive, low-cost, high-leverage investments. Features:

  • Short life: fully invested within 3 years or less
  • Small, high-leverage investments: invest financial (e.g. $25-50k) and social capital in high-leverage ways – core capacity, incremental engagement, financial seeding
  • Low or no fee: offset with performance based incentives for financial and impact returns appropriate to the fund
  • Light-weight and dynamic operations: led by individuals or organizations that have a unique position or perspective on the ‘frontiers’ – run as a ‘side-car’ to existing occupation
  • Commons interdependent: fund and individual investments must spark and support a conversation and generally contribute to and engage community to mitigate risk, improve success, and demonstrate returns
To what extent do participants in joint activi...
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Social venture commons: convening and catalyzing capital, community, conversation. Features:

  • co-created infrastructre: enable self-service deal support, reporting, and portfolio tracking for micro-funds and their investees
  • nurture conversations: technical and financial support for stimulating micro-fund and investee conversations
  • harness social capital: help develop, weave, and harness social capital among funds and investees
  • strengthen community: seed and support unique, focused community gatherings and capacity supports including ‘forum’ style monthly entrepreneur groups

The key in this lies in the interdependence between the micro-funds and the commons. The commons nutures and convenes community. Funds add some fuel and spark by investing and catlyzing conversations. The ventures serve themselves through supporting each other and participating in the commons.

I’m continuing to refine this as I move toward a working example and will continue to think out loud as I go. And if you haven’t checked it out – take a look at the Entrepreneur Commons being led by Marc Dangeard. He’s farther along and is tackling similar issues as he goes. The similarities and even more so, the differences, are interesting and good fodder for conversation.

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