Generating entrepreneurial ecosystem that facilitates the transformation of ideas into enterprises in the rural areas & the forest landscape
Reforestamos identifies different stages during the process of materializing entrepreneurial ideas into profitable, scalable and high impact enterprises. This is why Reforestamos seeks to integrate some of their main initiatives into the same strategy to increase the pipeline of entrepreneurship ideas and achieve the economic strengthening of forest communities in Mexico and Latin America.
Promoting the development of forest companies will enable Reforestamos to respond not only to a wide range of related challenges beyond ecosystem conservation (Sustainable Development Goal (SDG) 15) but also to the achievement of other SDG such as: 1, 2, 3, 4, 5 , 6, 7, 8, 9, 10, 11, 12 and 13.
What actions do you propose?
The project focus on forestry universities and communities to increase the number of entrepreneurs and promote an education that includes entrepreneurial skills. Also Attract investment for the incubation of innovative and high-impact forestry ventures that promote sustainable forest management and landscape restoration.
The strategy we want to implement addresses barriers to boost youth talent and generate an ecosystem where ideas can be developed into real scalable companies in Latin America.
Reforestamos, through its different initiatives, identifies four stages in business development:
Generation of ideas
We seek to encourage young people to generate entrepreneurial ideas with potential of being incubated through The Young Forest Entrepreneur LatAm Contest (YFE) and through the Entrepreneurial Forestry Teachers Network, which has been integrated in the last 2 years since the internationalization of the contest. The tools and materials that we promote help to solve the lack of education in business skills. In addition, we sensitize companies and investors about the importance of youth companies.
Reforestamos has worked with Wave to pre-incubate companies from finalists and winners of The Young Entrepreneur Forest Competition. With the follow up of Wave it is possible to transform the idea of entrepreneurship into a project.
Wave has also helped in the incubation stage of the preincubated enterprises of the Young Forest Entrepreneurs contest.
Reforestamos and Wave foresee the creation of Senda, a micro-investments manager for angel investors. Angel investors will participate with shares of the startups that they support. These investments can help the initiatives from Young Entrepreneur Forestry do not lose the momentum due to the lack of capital needed to invest in the enterprise. Reforestamos México, as a non-profit organization, can not give donations to Senda, however, through an agreement with Senda, Reforestamos will be able to ensure that investors' contributions to Senda are properly managed.
Reforestamos México through its Entrepreneurial Forestry Development Agency (EFDA) has incubated companies of rural producers. The work model has attracted the attention of civil organizations such as Pronatura of Yucatán Peninsula or governmental organizations such as the National Commission of Protected Natural Areas (CONANP) which have requested to be trained to replicate the methodology with producers located in protected areas.
Likewise, there are some productive initiatives in the forest landscape that are being incubated by other organizations, both civil society and government organizations. These initiatives could be identified through a contest called Forest Entrepreneur (EF). In this way we can also incorporate them into the incubation process.
To increase the impact in Mexico and Latin America, Reforestamos and Wave will join efforts to identify the incubators / accelerators and organizations interested in the creation of companies whose operations have a positive impact on the landscape and which can support the compliance with the SDGs.
It is expected to integrate an online platform that works as a virtual HUB and facilitates the communication among interested parties. It will be also possible to increase the number of companies in incubation, not only in Mexico but in other Spanish-speaking countries. Incubators, accelerators and interested organizations will receive online and face-to-face training to incubate and accelerate businesses in the forest landscape.
We hope that Senda can receive a larger pipeline of projects from the incubators that were strengthened through the Online platform.
Reforestamos and Wave will promote the integration of a Latin American Network of Business Incubators and Accelerators in the Landscape as well as a Latin American Network of Civil Organizations that promote sustainable ventures in the forest landscape.
Finally, considering the interest of large companies in terms of impact investment and international resources that have been promised to invest in business models for landscape restoration, the strategy seeks to generate a financial instrument where the Private sector can invest resources to scale the enterprises previously incubated and accelerated. The enterprises of the Mexican Alliance for Biodiversity and Business (AMEBIN) have the idea of generating a Fund that can provide money to support companies specialized in the landscape.
This fund has as a priority to provide financing to companies with great impact on communities, the landscape and its sustainability. The companies supported by this fund would request a loan that would be paid in a maximum period of 24-36 months and looking for business models that give competitive returns (+ 20% Annual) as those that could be given by other similar sectors such as the Agricultural or so different like the real estate sector.
Similarly, we hope that the number of companies can be attractive for companies to design strategies to diversify their long-term investments, such as pension funds based on the impulse of companies in the landscape. We hope that through the participation of the IDB, the investment risk of the private sector in these types of companies can be minimized.
The different investment funds interested could form the Latin American Network of Investment Funds in the forest landscape.
Who will take these actions and which types of actors are involved?
The project is managed by Reforestamos México, but some actors are involved in the different parts of the strategy:
Reforestamos has had an impact on Latin American forestry schools through of the Young Forest Entrepreneur (YFE) initiative. YFE was born in Mexico in 2013 and after 4 editions has expanded to 12 countries in Latin America, creating a network of teachers to promote a new generation of young people who improve education (SDG 4) to encourage the creation of enterprises.
The initiative has been implemented in partnership with Tecnológico de Monterrey, BBVA Bancomer Foundation, FEMSA Foundation, Grupo Bimbo, National Entrepreneur Institute (INADEM) and business incubator WAVE.
In these years Reforestamos recently identified that it is necessary to generate a micro investment management entity. Reforestamos is partnering with Wave to create Senda. Senda is a micro investment management enterprise specifically focused in the forestry sector. will allow angel investors to support entrepreneurs after the incubation phase. Moreover, Senda has a Goal-Based Investment strategy: encourage potentially successful entrepreneurs with specific amounts of money to grow and continue their project in exchange for company actions, so that Senda will ensure the performance of the new companies and at the same time the success and the profitability of projects to investors.
Given the lack of business support in communities, Reforestamos through its Entrepreneurial Forestry Development Agency (EFDA) has developed a replicable methodology to develop entrepreneurial skills in forest producers. EFDA has focused its work in the Yucatan Peninsula and has achieved 50% of evaluated project ideas turned into real companies.
EFDA evaluates and promote the entrepreneurial skills of producers and also gives follow-up to achieve that producers understand their challenges and make resources and technologies available to supply the market effectively.
With the purpose of involving expanding companies in topics of conservation, sustainable use and restoration of the biodiversity, Reforestamos promoted the creation of the Mexican alliance of Biodiversity and Business (AMEBIN) in the Convention of Biological Diversity (COP-13) held in México.
AMEBIN is composed of fourteen large companies (BASF, Syngenta, Grupo Bimbo, Nestlé, Walmart Mexico y CA, Biopappel, Masisa, Proteak, CEMEX, Grupo Mexico, Zurich, Ecovalores, Citibanamex, Banorte) including two expanding forestry companies (Proteak and Masisa), twelve civil society organizations (Reforestamos, The Nature Conservancy, Conservation International, Rainforest Alliance, Mexican Fund for Nature Conservancy, Pronatura Mexico, Pronatura Sur, Causa Natura, COBI, Kanan Kay Alliance, CONIECO, CESPEDES -Mexican Chapter of the WBCSD), two international cooperation agencies (French Development Agency, GIZ) and one initiative of the United Nations Development Program (Biofin Initiative).
Where will these actions be taken and how could they scale?
For the next three years, the actions of the project YFE will be taken in ten countries of Latinamerica. During the next three years we expect to increase our presence and activity gradually.
Taking into account our local partners, strategy and costs:
- In 2018 our focus will be: Mexico, Guatemala and Peru.
Also we will increase activity in Colombia, Costa Rica and Ecuador.
We will have less activity, but keeping in contact with Paraguay, Chile, Bolivia, Honduras and Argentina.
- In 2019 our focus Costa Rica, Ecuador y Colombia.
- In 2020 our focus would be Paraguay, Chile, Bolivia, Honduras and Argentina.
In addition, specify the countries where these actions will be taken.
What impact will these actions have on reducing greenhouse gas emissions and/or adapting to climate change?
It is difficult to make an approximate calculation of the impact of the actions in a project of innovation and development of entrepreneurship ecosystems, since they depend on many indirect factors that require complementary analysis, as well as on the success of the project and the companies that it manages to develop. However, the companies that emerge thanks to this project contemplate aspects to conserve biodiversity, reduce greenhouse gas emissions and stop climate change. Therefore, there is no doubt that these companies contribute to the development of societies in the rural areas, thus protecting ecosystems, their biodiversity and strengthening the capture of CO2 in those ecosystems where companies operate.
What are the most innovative aspects and main strengths of this approach?
This is a proposal to create a whole entrepreneurial ecosystem Investment Manager specialized in forest landscape companies that brings together impact investors, promoting risk microinvestment.
There are similar proposals in other sectors, but until now has not been taken in the the forestry sector. Foresters have a technical background that allows them to understand the environmental context, but they lack an accompaniment that allows them to increase the economic and social impact of forestry companies, through a profitable business model.
For the investment sector, there will be more companies that emerge from rural inhabitants, addressing problems in the forests, which have competitive products.
For the forestry sector they will be tools and advice that will allow them to consolidate and scale their companies with a current vision of what the market demands.
What are the proposal’s projected costs?
The budget is detailed in the link below:
The cost for three years would be aprox. 2.167.668,95 USD