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 / Spring 2012 / Issue 66(originally published by Booz & Company)


Linda Rottenberg’s High-Impact Endeavor

Essentially, Rottenberg and Kellner saw themselves as venture capitalists: They intended to scour Latin America for early-stage, high-potential entrepreneurs who could generate impressive returns and create jobs. They agreed that the key to unleashing Latin America’s entrepreneurial strength was to create Silicon Valleys of sorts on local soil. Yet they were well aware that the financial and cultural structures that had been in place in the original Silicon Valley were largely nonexistent in Latin America. Years of corruption in Latin America’s emerging markets had led to rampant bribery, falsified financial statements, and other dirty dealings, resulting in a general mistrust of business.

Surmounting these barriers would require both guaranteeing local ownership and fostering trust. Entrepreneurs needed to tap into local networks, experience, and wealth — which would be virtually impossible without the imprimatur of their country’s business leaders. Yet these leaders had little reason to trust a group of young upstarts with creative destruction in mind.

Endeavor could succeed, Rottenberg believed, only as a neutral third party — a nonprofit. “We believed that neutrality would give us a competitive edge, since there was so little trust on the ground,” she says. “If we were investors, we’d lose that neutrality and jeopardize that trust.”

Rottenberg coined the phrase high-impact entrepreneurship to signal the type of growth-oriented, scalable enterprises she hoped Endeavor would enable. “One of my pet peeves is that the nonprofit world does not do very good marketing,” she says. “Look at the word non-profit itself — it’s very negative. High-impact entrepreneurship sounded big, bold, and aspirational.” Semantics aside, Rottenberg resolved that Endeavor would be a new kind of nonprofit. Using the energy and tools of the private sector, it would not just produce results, but also rigorously measure their impact.

By the time their coffee grew cold, Rottenberg and Kellner had sketched out the broad outlines of the Endeavor model. “It started with Latin America, but from the beginning we said this model could really apply to emerging markets around the world,” she recalls.

A New Type of Benefactor

In the next few months, Rottenberg left her job at Ashoka and focused her energy on launching Endeavor. Kellner agreed to assume an advisory role, and to provide seed money contingent on Rottenberg’s ability to find matching funds.

She approached foundations, even though she knew that Endeavor’s chances were slim: At the time — the late 1990s — less than 1.3 percent of U.S. philanthropy went to international causes. Indeed, every foundation she approached turned her down or suggested that she change her focus. Resolving to stay the course on her own terms, Rottenberg approached the private sector, but her timing couldn’t have been worse. The Asian financial crisis of 1997 had raised fears of a global economic meltdown, and capital for new ventures in the developing world was scarce. “Everyone thought we were out of our minds,” Rottenberg says. (Today, she tells entrepreneurs that if people don’t think they’re crazy in the beginning, they may not be thinking big enough.)

In mid-1997, she persuaded Stephan Schmidheiny, a Swiss industrialist and philanthropist with a keen interest in Latin America, to match Kellner’s investment. By the end of the year, Endeavor had a board of directors and enough capital to begin operations, based on what Rottenberg termed the country benefactor model.

Under the model, Endeavor, whose global headquarters were Rottenberg’s New York living room, would recruit prominent business leaders within a country, tasking them with forming a board and raising funds before the organization would agree to set up a local office. Once established, these offices would be informed by local values and would be expected to achieve self-sufficiency within a few years.

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  1. Thomas Friedman, The World Is Flat: A Brief History of the Twenty-First Century (Farrar, Straus and Giroux, 2005): Bestseller that describes the context of globalization in which Endeavor emerged, including an account of Rottenberg’s work.
  2. C.K. Prahalad and Stuart L. Hart, “The Fortune at the Bottom of the Pyramid,” s+b, First Quarter 2002: Seminal article by the late globalization expert and management thinker on business opportunities in the developing world.
  3. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (Basic Books, 2000): A classic analysis of the cultural and institutional impediments to entrepreneurship in the developing world.
  4. Endeavor’s website: Features case studies, statistics, a blog, and more.
  5. For more thought leadership on this topic, see the s+b website at:
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