crowdsourcing

In the Community

We are so excited to announce that Click Workspace has recently become a Trustee organization of Kiva Zip.

Kiva Zip is a program of Kiva.org, an international lending organization for individuals and small businesses. Kiva Zip makes micro-finance loans for small businesses in the US and Kenya that contribute in a meaningful way to the social good. Borrowers can request 0% interest loans of up to $5000 to grow their businesses and funding comes from individuals near and far through an online giving platform. 

Kiva Zip is a great fit for Click Workspace. As a coworking organization hosting many small businesses in our space, and as a dynamic member of the Northampton community, we see building networks and opportunities to invest in each other’s success as a key role that we can fill. Reducing the cost of capital and expanding financial opportunities can help to bring short-term success while building lasting community connections can ensure growth and success in the long term

Many business owners recognize that a small amount of money will provide just the support they need (for example, for a new piece of equipment or up front costs of materials), but because they are in a high-risk category they might not qualify for a bank loan. This could be because they are new business owners, haven’t borrowed before, don’t have capital to draw upon, or are entrepreneurs who haven’t established a strong record of growth. Kiva Zip uses different metrics than the bank, relying on human capital as a measure of creditworthiness. In the first round of lending, borrowers are asked to invite family and friends to start their fundraising.  After the designated number of friends have signed on then, "the Kiva Zip community takes care of the rest.”

Kiva notes that lenders give for many reasons. Some appreciate helping others and empowering entrepreneurs.  Others want to invest in their neighborhoods.  Lenders are customers, neighbors, advisors, and ambassadors for the small businesses they support. Kiva Zip lenders can give as little as $25 and once the loan is paid back can reinvest the funds if they choose.

Click’s role as a Kiva Zip Trustee will be to endorse borrowers and boost their capacity for outreach to the community through our own networks of potential lenders.  Our Kiva advisory team will meet borrowers and review loans to determine if they are a good fit with our mission. Then we’ll help to promote an approved loan through our social media and colleague organizations. Ultimately, we hope to build a fund to help finance loans as well. Starting this summer we will take on two or three loans and as the program becomes successful, hope to endorse even more.

We are currently looking for our first endorsement opportunities and invite you to share this information with anyone who may be interested in learning more about borrowing through Kiva Zip and Click.

Idea: 3-day due diligence (#CriticalMassWeekend)

An alternative (or compliment?) to business plan competitions / accelerators.

Problem & Opportunity

Founders who have to spend a ton of time raising money are not  spending that time helping their ventures, which can hurt them pretty badly! But due diligence does take time and rushing it is a good way to make a lot of bad investments.  

Possible Solution

This blog post from Y-Combinator's Paul Graham and my experience helping run the Silvertip Awards for the Angel Capital Association got me to thinking... what if we could:

  • Offer entrepreneurs an angel-level investment process that goes from application to signed term sheet in less than a week.
  • Leverage the entrepreneurs and college students (primarily MBAs and students of entrepreneurship) to conduct filtering and accelerate due diligence.
  • Ask the angels to carve out a few days that they will dedicate  to the event. No other business, no distractions.
  • The organizers assemble all the due diligence resources the angels will need to help them move at warp speed.
  • Use highly standardized (and public) term sheets and due diligence templates. 

Sample Implementation

Day 0 (application & orientation): Teams apply using standardized application form.  Make sure the form gathers all the kind of info that tends to slow things down later such as references, any files people will need access to, etc.  Meanwhile, students recruited from area colleges gather in person for an orientation session.  

Day 1 (pre-screening): Students, gathered together in-person, go through a series of intensive, structured activities using a crowdsourcing technology to filter down the applicant pool to a manageable number.  Angels are invited to participate.

Day 2 (screening):  Angels review the presentation videos of the teams left standing and then head out to breakout sessions with the teams they find most interesting.  Students are allowed to spectate, conduct their own due diligence, and post their findings to the crowdsourcing platform.  Angels, using what they have learned in person and what they have learned from the student's research on the online platform, each pick one  venture to conduct due diligence on (done in concert with all other angels interested in that same team).  These teams are provided a detailed list of high-priority due diligence questions,

Day 3 (due diligence): Due diligence teams meet in-person with their ventures through a series of structured, focused meetings.  Students continue to spectate and participate online.  Angels might call on students who have proven themselves a savvy to actively participate in the live due diligence.  The day ends in an "awards ceremony" where investments are declared and awards to top-performing students are handed out.

Minimum Viable Product:

I believe strongly in the lean startup methodology , so here is a minimum viable product implementation that might get the ball rolling.

  • Get 3-5 angels to commit to making $2-5k grants each.
  • Focus on concept or seed-stage companies (like those that apply to UMass EI's competition or to VVM)
  • Get one MBA program (UMass? Baypath?) and/or one large entrepreneurship program to provide students (UMass EI? Baypath? Maybe the new Smith program?).
  • Don't run it as 3 consecutive days, instead split it over two consecutive weekends.  Heck, maybe the first weekend is the one right after the Grinspoon collegiate entrepreneurship conference where 500 college students gather! That way students don't miss any school :).

Love your thoughts!