Prometeo Fund

The Prometeo Fund ('Prometeo') is a new impact investment fund currently being designed by Agora Partnerships. The vision of Prometeo is to help ignite an impact investment movement in Central America. Our strategy to accomplish this goal is to work with local angel investor groups and other capital providers, bringing professional investment management for the first time to early stage impact entrepreneurs in the region, as well as expertise around social impact measurement. 

Prometeo will seek to raise US$10-$12 million to generate combined social, environmental, and financial returns for impact investors. The fund management will be based in Central America and will invest in high growth, high impact small and growing businesses (SGBs) that are underserved by traditional capital and credit markets. Prometeo is named after Prometheus, the mythic figure who stole fire from gods and brought it to humankind.

Background

Venture capital activity in Central America primarily focuses on companies with investment needs of one million dollars and above. Despite their potential to create social and economic impact, SGBs with smaller financing needs, the “missing middle”, suffer from a lack of access to networks, mentoring, support, and growth capital. Agora Partnerships and the Prometeo Fund seek to fill this gap and demonstrate to the local capital market that investment in impact entrepreneurs can produce attractive social and financial returns.

Investment Strategy

Prometeo will invest in companies with revenues up to $2 million with the following characteristics:

• Operate in an attractive industry, particularly those where Central America has a competitive advantage and high growth potential such as agroindustry, ecotourism, value-added manufacturing, and services;

• Have a differentiated product or service;

• Have a proven business model and experienced management team, and are at an early stage of scaling a product or service;

• Have committed and experienced managers who share the fund’s commitment to social change;

• Have an identifiable path to exit, typically through management share buybacks, third party investments, mergers, royalties, dividends, and debt repayment, where applicable;

• Have adopted, or are willing to adopt, adequate accounting and financial reporting systems.

The Prometeo fund will also actively seek to invest in women entrepreneurs.

Prometeo’s strategy aims to:

• Invest $150,000-$500,000 per company, using a small variety of mezzanine/quasi-equity and preferred equity structures, based on best practices learned from Agora's first fund and coordinated with regional co-investors. Allowing for a reserve for follow-on investments, this equates to approximately 15-20 expected investments with a fully subscribed fund;

• Syndicate deals with Agora’s network of angel investors and international impact investment funds;

• Provide mentor capital by requiring local angel or third party participation in all deals that Prometeo invests in;

• Leverage relationships with Central and North American partners in order to facilitate growth and expansion outside local markets.

Operational Strategy

Business execution will be the key focus of the fund, with particular attention paid to:

• Building the management team and formalizing the corporate governance structure;

• Providing management consulting and business intelligence in the areas of operations management, human resources, marketing, and distribution;

• Connecting companies to local mentors;

• Raising additional capital where necessary;

• Connecting companies to local mentors and with Agora Partnerships training and leadership development programs, if funded.

Pipeline

Prometeo has access to a large regional network of business leaders, universities, financial and development institutions, and other partners active in local entrepreneur communities. Agora initiatives such as the Accelerator are also expected to be a valuable source of referrals of impact entrepreneurs the fund will invest in. The fund will target deals in all sectors, but will only invest in companies where the fund management team, and/or co-investing angel investors partnered with Prometeo have a deep understanding of the company and the industry and will actively participate on the board.