Manvi’s Tale from MIT to Mexico City and Beyond
Q: Hi Manvi! So tell us about yourself ; Where are you from?
I grew up in the suburbs of Washington DC, but was actually born in India. I came to the States when I was five years old. The DC area is wonderful so my family never left. I just graduated from MIT in Cambridge, MA with a major in Economics.
Q: How did you and Sarina come up with this project?
Sarina and I have literally been working together since we were 15 years old. We went to the same high school and later to the same college, and even majored in the same subject. Our sophomore year at MIT, Sarina and I took a class together called “Development Economics” taught by Esther Duflo and Abhijeet Banerjee. Both of us had always been interested in issues involving international development and business, and in this class in particular, we were introduced formally to the concept of micro-credit. We studied micro-credit as a funding model to help households meet consumption needs but we always used to question where microcredit stood in promoting businesses. We learned from this class and other research we did together that microcredit was not going to be enough to help businesses.
I got involved with the Global Poverty Initiative at MIT and started researching more about microcredit and issues involving poverty alleviation. Our junior year, Sarina and I began thinking about a potential financial product to help businesses grow and we started brainstorming a micro VC model. We won several grants to conduct research on the practical viability of microequity in Mexico in Jan 2009.
Q: Why Mexico?
For some reason, we have a magnetic attraction to Mexico City – the people we meet and the places we go open new doors for us constantly! This country is amazing, really.
On more of the business front: There is actually a huge scope for microequity in Mexico because in the microcredit market here, interests rates are really high. Our microequity product has the potential to be an extremely attractive tool here primarily because we will be able to offer investments with payback rates much lower than those of the MFIs. Second, the government of Mexico is doing a lot to strengthen entrepreneurship and small business development in this country by making it easier to formalize a business and by improving incubator centers for entrepreneurs. Our flexible equity product could fit very well in this country because it is specifically geared towards small business growth. It will be well received by the government and NGOs in this sector.
In Mexico, we interviewed up to 15 different MFIs, angel investors, and some NGOs to get feedback on our model and learn about the Mexican microfinance climate. We came back to the US with tremendous knowledge of the application of microequity in Mexico and countless potential partnerships. We spoke about our research at a conference conducted by the MIT legatum center for entrepreneurship (which had helped to fund our trip).
Q: Why did you choose to work with InVenture?
In the coming months we continued to research our model and network with as many professionals and professors about our idea. Our networking paid off when we got connected to InVenture through a student at UPenn who was also speaking with us and researching microequity. We poured through InVenture’s website and their previous work and quickly learned that what they were doing was exactly what we had been envisioning! They even had the whole infrastructure set up – they had a website, a stellar marketing and communications team, lawyers, and board members. Also, the fact that InVenture was a young company was appealing to us because it meant that we could make a difference in the company and use our ideas and connections to shape InVenture’s direction. After speaking with Shivani, we were asked to join InVenture and start the first north American pilot in Mexico based on our past research and partnerships there! There was no way we could say no to the opportunity – this kind of opportunity was what we had been waiting for all along and it literally fell into our hands! Instead of reinventing the wheel, starting our own organization from scratch, we knew it would be better to join forces with an already established organization.
Q: So what’s the plan for while you’re in Mexico?
In Mexico we plan to set up the first micro-equity pilot of North America. We have already set up a partnership with a microfinance institution, APROS, to serve as a third party in identifying and monitoring entrepreneurs. APROS has isolated entrepreneurs for us to work with and include in the microequity pilot.
In Mexico our goal will be to 1) develop a business plan for the micro-entrerpeneurs that are seeking to grow. The business plan will lay out the new project or strategy they want investment capital for so that they can grow/expand/diversify their current operations. 2) we will set up a financial contract that establishes repayment rates and explains to the entrepreneur how microequity will work. Ideally we would like to deploy the investment capital to the entrepreneurs before leaving. And also we want to have taught them how to use the money to expand and how to record their sales effectively to keep track of profits.
Q: How will you decide which enterpreneurs to work with?
1) Our ideal entrepreneur is on a growth path. He or she needs a larger sum of capital with more repayment flexibility in order to grow. He or she has probably outgrown microlending or cannot yet access commercial banking.
2) Our ideal entrepreneur has been running a business for three to five years. We work with current businesses, not startups. Ideally this entrepreneur also makes a social impact to the community and through growth will either improve employment in the community or improve the general livelihood of the community.
Q: What’s one thing people wouldn’t know about you when they first meet you?!
Haha, good question. Maybe someone could guess this the first time they meet me, but anyways, I ran the Boston Marathon this year! I absolutely love running and every year in Boston while I was at MIT I would go watch the runners at the last mile. One of my close friends did it twice. I always wanted to do it before I graduated! And so this past semester I ran as a “bandit” (unregistered) runner and finished in less than 5 hours! Probably one of the biggest accomplishments of my last semester at MIT!
Q: What’s next for you?
In general, my plan is to keep making a difference. I love economics and I love working with people, so I want to keep working on projects in which I can promote economic growth in the developing world through business solutions. I’d like to keep acquiring knowledge of finance and international development so I can use it to promote the micro-equity concept and other partnerships that come out of this concept.
As for the immediate future – starting Aug 25, I’ll be in India for a year (based in Chennai) on a Fulbright doing research on micro-equity and small business development, while also helping with InVenture’s pilot there! Afterwards next June, I will start at a consulting firm, Oliver Wyman, to do strategy consulting for financial institutions. I hope to gain some real world business know-how there so I can keep applying it to InVenture’s work!
