Silicon Valley For Acumen Opens

It has aided in the creation of more than 7,000 jobs in Tanzania and helped families in India get electricity into their homes.

But, instead of taking the traditional path of investing in businesses that target middle to high wealth individuals, the global non-profit venture group Acumen Fund only invests in business plans that will create companies that improve the lives of people who make less than four dollars a day.  

"Acumen Fund is like a laboratory," said Jacqueline Novogratz, CEO and founder.  "We invest in some of the best experiments in the world; and when we find those things that work, we have a model that we can share with the rest of the world and reach literally millions of people who can then change their own lives."

With a portfolio worth $38 million, Acumen has invested $50 million in socially-conscious companies in India, Pakistan, and East Africa.  Its investments range from $150,000 to $2.5 million, and are usually split 60:40 between equity and debt, respectively.  It has 35 active investments.

Acumen Fund began in 2001 with seed money from the Rockefeller Foundation, Cisco Foundation, and a few individuals, as a small fund that took an entrepreneurial approach to resolving problems such as global poverty.  It now holds offices in New York, Kenya, Pakistan, and India. On Aug. 8, 2010, it opened a new chapter called Silicon Valley for Acumen to get closer to a community of high net worth individuals who hold philanthrophy and entrepreneurship in high regard.  The new branch has two volunteer employees, one of which came out of semi retirement.

Sand Hill Road is the nation's venture capital mecca and the heart of Silicon Valley where entrepreneurs make pilgrimages to pitch their business plans in the hopes that it will be the Next Big Thing. Eight out of 10 of the most active venture capital firms have offices on Sand Hill Road in Menlo Park, according to a recent study published by the data analysis firm CB Insights; and in true capitalist form, real estate agents commonly list rental rates for property with a Sand Hill Road street address as "negotiable."

However, Silicon Valley for Acumen decided to share a workspace with at the high-tech incubation center in Mountain View called Hacker Dojo to save money.

"The very people we are trying to help can use every single penny we can save," said Russ Dirgantoro, Acumen Ambassador and Silicon Valley chapter founder.

Acumen has screened more than 500 business plans to date, but only funded the 50 that had scalable models that would help "people at the bottom of the pyramid," Dirgantoro said.

Acumen distances itself from the market-based approach to resolving systemic problems such as poverty and the inability to access clean water.  It places high emphasis on earning a measurable social return on its investment, rather than a financial one; funded companies are expected to positively impact the lives of one million people within five years.

Its primary goal is to fund health, water, housing, agriculture and energy companies that will provide a service that empowers people to live dignified and independent lives. The companies are given eight to 10 years to become profitable.

Eight companies have exited successfully from the fund by purchasing the equity Acumen held. Two have failed.

Acumen relies on donations to continue its mission of investing in socially-conscious projects. Philanthropists who contribute to the fund receive a tax write off, while Acumen uses the money to invest in additional companies until they are able to sustain their own activities. Profits from the fund are reinvested into other companies. 

On Oct. 5,  Acumen Fund will host an intimate dinner at the Left Bank restaurant on Santa Cruz for 10 of Menlo Park's most influential philanthropists.

"We really want to build relationships with people who are excited about what we do,"Dirgantoro said when asked to articulate the reasons they were holding the event in Menlo Park.

Dirgantoro would not release the names of the people who were invited to the event, but did say that attendees had an net worth of up to $600 million. Two seats were open at the table at the time of the interviews.

To donate time or money to the Silicon Valley for Acumen email Russ Dirgantoro  or visit their website.