Investing in third world entrepreneurs

September 14, 2010 6:07 PM

Websites that allows you to make small investments online in entrepreneurial projects in third world countries?

If I don't find the one I was originally thinking of, anything of a similar vein most welcome. As I recall the investments were as low as a few hundred bucks maybe? Perhaps even lower, and in some cases a probably return on investment was specified.

posted by vizsla to work & money (9 answers total)

Kiva.org
posted by Paragon at 6:08 PM on September 14, 2010 [3 favorites]

kiva doesn't really cut it in this case - kiva allows you to loan money, not invest it.
posted by Pants! at 6:27 PM on September 14, 2010

I use Kiva. But there's also MyC4.
posted by sveskemus at 12:22 AM on September 15, 2010

and if you use kiva, be sure to join team metafilter!
posted by 5_13_23_42_69_666 at 12:28 AM on September 15, 2010

Generally speaking ... these "donation is actually an investment" websites are mostly illegal ...

The investment component is heavily regulated ... so if there is a variable return on the investment being offered to the public at large, rather than being structured as a straight out gift or loan requiring repayment, then the investment will probably need to pass a whole host of national legal hurdles relating to offering of securities ... which these websites don't do ... and is why most of them are (or have recently been) restructuring their product offering.

Kinda like I can't just go out and make an IPO on my kids lemonade stand ... it ain't that easy.
posted by jannw at 1:02 AM on September 15, 2010

Thanks for the answers. Kiva was the site I was looking for (had forgotten it facilitated loans). jannw: Do you have any further information about this legal issue? I remember reading about companies trying to issue shares over the internet around 2000. Any info appreciated.
posted by vizsla at 4:30 PM on September 16, 2010

Hey Vizsla ... check out:

EX ANTE CROWDFUNDING AND THE RECORDING INDUSTRY: A MODEL FOR THE U.S.?
Tim Kappe

Especially part 3 and 4

And bear in mind that the author is assuming that these European models are legal in their respective countries ... which may not be the case ... since this article most of the European companies have radically altered their business models ... suggesting that they possibly had a stern talking to by their national regulators.

Also see, recently in the blue: the godspell post and check out what the promoter had to do to offer "investment opportunities" in his musical (detailed in one of the linked posts).

Lastly, there are Financial Markets Law issues ... along the lines of how are you holding whose money ... because if it (the money) ain't yours, then you are acting a little like a bank, which is not allowed if you aren't actually a bank.
posted by jannw at 12:43 AM on September 17, 2010

jannw : Thanks thats very useful. I wonder how GrowVC.com got around these regulatory hurdles.
posted by vizsla at 11:01 PM on September 19, 2010

Well ... growVC is only a connection service - kinda like linked in ... they specifically state in their T&C's that the transactions is a personal one between the funder and the startup.

(or so the T&C seem to state)

I haven't looked at it closely ... but it seems they are passing the regulatory compliance issues to their customers.
posted by jannw at 2:59 AM on September 20, 2010