Ridiculous Success Rate Helps Village Capital Raise $13.2M
Village Capital’s new investment program, VilCap Investments, is funding startups in an atypical and interesting way. Announced from the Global Entrepreneurship Summit last month, the seed fund has raised 13.2 million dollars with the goal of making 100 investments in 75 companies through a peer review process.
Instead of doing the deliberation themselves, Village Capital will be hosting peer review sessions in which potential investees vote for who deserves the money amongst themselves. With investments from VilCap ranging from $50,000 - $100,000 per company, this may seem like an unnecessarily risky venture. However, Village Capital has been funding companies this way long before VilCap Investments ever existed. They’ve raised over two million dollars in the past five years with peer review, which has turned into 50 million in follow-on capital. A unanimous 93% of their companies have been thriving since.
The companies targeted by VilCap Investments are ambitious startups aiming to solve global problems. Their website lists a few companies they’ve supported through investment in the past: Spensa Technologies, Simpa Networks, and SevaMob. These companies provide data management systems for farmers, pay-as-you-go energy service to off-grid homes, and pop-up health clinics in India, respectively. The new funding program aims for partnership with similar global-facing startups.
Following suit, at the Global Entrepreneurship Summit, Village Capital also announced a partnership with the US Global Development Lab at the US Agency for International Development. The partnership is called Partnering to Accelerate Entrepreneurship (or PACE initiative), and it aims to “catalyze private-sector investment into early-stage enterprises in developing countries.” Essentially, they are helping to fund startups in the emerging economies of the third world. Those companies will likely be dealing with energy and agriculture as well. Village Capital certainly stays consistent with its values.
Village Capital has quite a track record, but with VilCap Investments the stakes are raised significantly. Two million over five years is a lot, yes, but the new investment program has raised 13.2 million to invest in an undisclosed amount of time. Because this democratized funding model is non-traditional and unique to Village Capital, it remains to be seen if the success of their more modest investments will continue with this new program.