A letter by Ben Powell discussing Agora's past year and future.

1. December 21st, 2010
Dear friends of Agora,
2010 has been a great year for Agora Partnerships and I wanted to thank all of our
supporters, partners, investors, staff, volunteers, entrepreneurs, friends and family for
helping to make it so.
As we look forward to 2011, we will continue our focus on helping the most important,
forward-thinking, impact-focused small businesses in Central America reach their potential.
In this letter, I want to reflect on how Agora sees the world, and in particular to discuss
three global trends that will transform the international development industry in the
coming years. I’ll also present three key challenges we believe the impact investment
industry will need to confront. Finally, I’ll discuss Agora’s response to these challenges,
something that has been five years in the making.
Agora 2010: Year in Review
2010 was our busiest year to date. Here are just a few of the highlights.
• The year started with the good news that I had been elected an Ashoka Fellow. We
were very excited to receive this recognition and to contribute to building the
Ashoka community; in particular to share our perspective on how for-profit
business models can create social change.
• In February, we wound down our four-year contract with USAID, and I am happy to
announce that we exceeded nearly every goal. Given the global economic slowdown,
however, we ended up raising less and investing less from the Agora Venture Fund
than originally hoped. In the interest of transparency and with the hope of
contributing to the field of early-stage impact investing, we plan to produce a white
paper on every deal the Fund has made and make it available to the public next year.
• In April, co-founder Ricardo Teran was selected as a Yale World Fellow, spending
four months this fall at Yale and building a strong network of support and
awareness for Agora and the field of impact investing and entrepreneurship.
• In March, we co-hosted the first-ever Aspen Network of Development
Entrepreneurs Latin American Conference in Granada, Nicaragua in order to help
build the field among local practitioners. On an island in the middle of Lake
Nicaragua, close to a hundred people from over a dozen countries signed the
Granada Declaration, dedicating themselves to supporting sustainable small
business creation across the region.

2. • With Mercy Corps, we launched the first-of-its-kind micro-mentoring program in
Central America, which will connect over 100 entrepreneurs to Spanish-speaking
mentors in the United States.
• In July, for the second year, we ran the Responsible Business Leadership (LiderES)
prize to recognize small businesses in Nicaragua that contributed the most to their
community and the environment. The winners of the prize represent the very
essence of impact entrepreneurship.
• With innovative partners like the Arthur B. Schultz Foundation’s THRIIVE program,
we invested $50,000 in 7 small companies with the requirement that they give back
a similar amount of in-kind goods to the community. We hope to expand the
program next year.
• In September, we cemented a partnership with the AVINA Foundation, one of the
leading philanthropic foundations focused on sustainable development in Latin
America.
• In October, we celebrated our five-year anniversary in New York City. Thank you to
everyone who attended!
• In November, we brought on two outstanding new Board members, Melissa Cheong
and Holly Huffman – welcome!
• And in December, we began the launch of the Agora Accelerator, our most ambitious
initiative yet and the one that will define Agora in the coming years.
Global Trends
Three well-recognized trends are converging to change the way we engage in development
work and I wanted to discuss them briefly. These trends will inform Agora’s approach to
development in the coming years
First, there is an increasing realization that entrepreneurial business innovation is
critical to help solve our social and environmental problems. Businesses in poor
countries that take a multi-stakeholder view of their role in society and that generate
positive social, environmental, and financial impact represent the future of development.
Not only are they sustainable – relying on customers, not donors – but they are run by a
new generation of entrepreneurs deeply committed to using business as a force for good.
We are on the cusp of a historic shift from a donor mentality focused on relieving suffering
to a partner mentality focused on working with the very best local entrepreneurs to create
long-term change.
Second, social networks and technology are growing rapidly, enabling vast amounts of
information and resources to flow from a classroom or church group in one part of the
world to an entrepreneur in another. At some point – and hopefully soon – the power of
this media will allow for multiple connections between investors, philanthropists,
volunteers, customers, business school student – and impact entrepreneurs on the ground.
Today, too many incredible impact entrepreneurs face nearly insurmountable barriers to
growth, toiling along in relative obscurity, their potential too often squandered. Tomorrow,

3. the best impact entrepreneurs will discover they are not alone – they have allies across the
globe who want to celebrate, support, invest, and do business with them.
Third, the impact investing industry is experiencing incredible growth. Increasingly,
investors and philanthropists alike are realizing that the right kind of investments in the
right kind of companies can often do as much, if not more, for the world than a grant can.
The impact investment trend is rapidly accelerating, backed now by major investment
banks and governments. Whether it turns out to be a bubble, and whether it does in fact
create the social impact we hope for, is still to be determined. But impact investing as an
approach to investment and to development is very likely here to stay – in no small part due
to the fact that some of the best minds in our field are committed to making sure it truly
does fulfill its enormous potential. And that is a very good thing.
Key Challenges
First, can the impact investing community create financial structures that allow
relatively small amounts of capital to flow to the early stage businesses that need it
most? Right now, few impact investment funds being launched intend to do deals any
smaller than $1 million. The economics of funds make it difficult to invest between $50,000
and $1 million in impact-driven companies, since it costs about as much to close a $500,000
deal as it does a $5 million deal. This presents a challenge to the field precisely because the
vast majority of entrepreneurs need between $50,000 and $1 million – and it’s the most
difficult kind of capital to obtain. We need a new kind of development venture capital model
where large pools of money can be efficiently invested in hundreds of companies working
with dozens of partners, angel investor networks, and trusted business service providers.
Think of a $50 million impact focused fund co-investing in one hundred companies
alongside local angel investment groups, energizing an entire new generation of local
impact investors. Several attempts to create innovative models have sprung up; some are
very promising, but no model has yet emerged as a global standard.
Second, where will the pipeline of investment-ready impact entrepreneurs for the
new impact funds be generated? How will we find and nurture the next generation of
impact entrepreneurs so vital for the success of the industry? How will investors be able to
lower their search and transaction costs so that those that do want to do smaller, earlier
stage deals can do them efficiently? A market needs to be created, and a there are a number
of efforts afoot to create such a market.
Third, how can we help build and support the impact entrepreneur movement? With
the rise of the impact investing industry and new global standard like GIIRS, we have an
incredible opportunity to help catalyze a whole movement of socially responsible
businesses, to remake what business leadership – especially small business leadership –
means in the twenty-first century. This is incredibly important as we confront
unprecedented global threats like climate change. But culture change is one of the hardest
kinds of change to affect. Investing is companies will be an important way to encourage a
new way of doing business, but it won’t be enough. We also will need to work at the local
level to create a supportive community with shared values and interests.
At Agora we have been thinking about these trends and challenges for five years now. One
of the major decisions we made in 2010 was to delay trying to raise a second fund – at least
for a few years. This was a difficult decision given how far we had advanced on the fund
design and raising capital, but I am more convinced than ever it’s the right one.

4. Agora’s Response: The Accelerator
There is currently an imbalance in the attention being paid to launching impact investment
funds and the attention being paid to the impact entrepreneurs charged with putting that
capital to use. It takes two to tango and, in the end, we forget at our peril that it’s
entrepreneurs, not capital, who will determine whether the promise of impact investing can
reach its true potential. The growth of the impact investing movement is due to the
leadership of a few individuals, institutions, and investors groups. We hope to provide
leadership to the impact entrepreneurship movement in Central America, much like groups
like B Lab and the Social Venture Network are doing in the U.S.
More attention needs to be focused on helping high potential entrepreneurs attract
expertise and capital. Without this focus, the impact investment movement will encounter
difficulty reaching the vast majority of impact entrepreneurs, who run triple-bottom line
companies that employ between 10 and 100 people and that are generating revenues of
under $1 million.
This group of entrepreneurs – so key to creating the new and innovative companies that
poor countries need – will continue to be our focus at Agora. Helping them to access the
social, human, and financial capital that already exists, that wants to help them but can’t
find them is a key part of our strategy. It is precisely to help this group – and pioneering
investors who want to invest in them – that we are launching the Agora Accelerator, a new
initiative to find and support the most important companies in Central America, defined by
their potential to create social, environmental, and financial value, with revenues of under
$1 million. With this program we will build on our previous experience working with
entrepreneurs, but will focus our efforts on launching and growing a highly select
community of impact entrepreneurs with enormous potential to solve social problems
through their business.
An important strategy for making the accelerator work is bringing the right supporters into
it. I encourage you to get involved helping, mentoring, investing, or consulting to
Accelerator companies. To learn more, please contact Lissette Cuadra, the Accelerator
Portfolio Manager, at lcuadra@agorapartnerships.org, or contact me directly.
I hope this letter gives you a good idea of what we have achieved and where we hope to go
in 2011 and beyond. From the very beginning Agora has been an organization supported by
hundreds of individual donors and volunteers. The continuing support and engagement of
our community never ceases to amaze me. Thank you for being a part of our community.
Your support to Agora helps us to support the entrepreneurs who will be key to helping
make our planet more just, healthy, and prosperous.
Happy holidays,
Ben Powell
Founder & Managing Partner
P.S. If you would like to meet an Agora Accelerator entrepreneur, check out this video of Aida Mayorga (4 min.)