ENTREPRENEURSHIP DEVELOPMENT

Through improved entrepreneurial eco-system platforms/services, AVC has started to catalyze new and innovative business models/business tactics that SMEs can apply to increase the pace of their growth. Specifically, the three intervention areas include:

Peer to peer (P2P): AVC has launched three test cases each organizing three to four clusters of SMEs with 10 to 20 SMEs in each cluster for a total of about a 100 SMEs. These hundred SME are potentially connected to thousands and thousands of smallholder farmers. The firms leading each test are local experts in training and/or business management consulting. Even though these three efforts just started at the end of FY2016, new business models and connections are already taking place. The early success is a good indicator that such platforms have great potential to catalyze substantial shifts towards inclusive growth business strategies in participating SME clusters.

Accelerator: An accelerator is part mentoring service and part venture capital fund. AVC is supporting the emergence of an Agribusiness Booster (AbB) model that is applying a lean start up model. A lean start up model focuses on targeting profiles of entrepreneurs that demonstrate a commitment to growth. The methods are based on experience and iterative adaptations of products and business models to speed up the pace of learning within real world conditions. Using this type of accelerator model has proven effective around the world especially in more uncertain environments like the zone of influence as the model focuses on the capacity to adjust to real world conditions on the ground. The process will start with about 100 SMEs and eventually select five to ten firms that will receive higher levels investment and mentorship.

Venture capital/investment banking: In addition to the more traditional understanding of a venture capital firm investing in an SME, AVC is also catalyzing new forms of venture capital organized from market actor to market actor, syndicated investments, and through innovative organizational forms that offer shares to non-typical investors like farmers. Through a broader understanding of ownership and investment banking services AVC expects to create new opportunities to unleash underutilized capital in the southern delta, as well as to better align incentives in support of inclusive growth business strategies.

Emergence of specialized business services targeting agribusinesses: As AVC gains traction in facilitating improved and growing lead firm governed structures and clusters of SMEs that can influence and drive more transformative growth in the zone of influence, the need/demand for targeted business services will increase. Often the durability of initial successes by market actors is dependent on their ability to access new or more sophisticated services. At the same time, the formation of sufficiently specialized services takes time and in the early stages of market systems transformation the services are insufficient/not capable to reinforce early momentum/successes.