Sunday, December 20, 2009


A microventure is an entrepreneurial unit of very small scale. Their revenues and growth models are of a scale typically not interesting for Venture Capital firms. The number of people operating them is small say less than 5, and capital assets similarly small.

Complete Microventure
A microventure is complete if it has achieved cash sufficiency on a sustainable basis. This implies that cost of operations, and cost of investments is lower than cash returns generated by the microventure on continuous long term basis. A complete microventure is sustainable which means it will continue to exist on its own resources. With some efforts, a complete microventure is transferable which means it can be sold without loss of operations.

Horizontal Span: A microventure performs a large horizontal span of functions typical of any large enterprise either explicitly or implicitly in a simplified form i.e. Strategy, Finance, Accounting, Human Resource Management, Logistics, Compliance, Marketing

Distribution: The number of micorventures in a space of all ventures follows Pareto distribution(Pareto distribution is an assymetrical distribution like Income distribution Number of poor is significantly more than number of rich). The count of microventures are very high compard to medium or large ventures. Complete microventures as a ratio of all microventures is high as well. Usually incomplete microventures do not survive as they don't get easy access to financing.

Ease of startup: A micoventure is easy to start, a fact reflected in their high numbers, but not so easy to make it complete.

Relevance for First Time Entrepreneur:
It is suggested that a first time entrepreneur should attempt to create a microventure and strive to make it complete as an initial objective. This is required to provide grounding in basics of entrepreneurship which covers all aspects of the business, helps him first hand experience to understand inter relationships between different functions, and creates a small positive cash flows though which bigger dreams could be initiated. It can be done while continuing with existing vocation. Many first time entrepreneurs chase scale, and external funding which are usually good objectives to chase, but not for first time entrepreneur.

Relevance for existing microventure owners:
If a microventure has achieved completeness, the maximum limit for future investments should be its completeness capacity, that is till that time when completeness is about to be just breached. A complete microventure owner should never let future growth compromise existing completeness.

Microventures as a market:
Services to Microventures is a large market, but not served by established and reputed servicing firms. One of the sub-markets Micro-financing is emerging only now, and has proven to be immensely profitable. Micro-logistics, micro-HR, micro-technology, and micro-marketing is yet to emerge in full scope & organization, but are expected to be equally profitable.

Rohit Tripathy

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