Ago\ra Partnerships Nicaragua: A micro venture capital fund

Agora Partnerships is a micro venture capital fund founded by Benjamin Powell in the US and Ricardo T. Teran in Nicaragua. Agora started operations in 2005 with the goal of identifying and supporting entrepreneurs and business plans with high potential for success. The fund faces some unique challenges. First, the size of the businesses that is investing in does not allow for a traditional “management fee” structure. Secondly, traditional investment exits are nearly impossible in Nicaragua. This teaching case includes analysis on sources of investment capital, deal structures, and expected returns. The unresolved dilemma remains how to structure an investment proposal attractive to both investors and entrepreneurs. The case also allows discussing how to adapt the venture capital model to an emerging country like Nicaragua.