Last month Dalberg and the Aspen Institute organized a meeting of about 30 aid organizations, including Agora, to try to raise the profile of the "next generation" of development tools.
"We are hoping this is an opportunity that is comparable to micro-finance, " said Stern. "But people also realize it's a much tougher sell. Investing in small businesses, particularly in the developing world, is inherently riskier."
Agora is trying to minimize those risks with its hands-on approach, and because the fund's investors are watching the "double bottom line" of economic and social returns, it changes the definition of success, Powell said.
Gian Marco Palazio is one of the fund's investors and the owner of Avanz, a Nicaraguan firm that sells protective industrial clothing.
"It's very hard to get commercial banks to believe in new projects, particularly if you are young and don't have any collateral, " said Palazio, who ultimately had to rely on personal connections to get his enterprise financed. "Frank Sinatra had it wrong. If you can make it here, you can make it anywhere."
Palazio said he hoped his investment in the fund would give other entrepreneurs a leg up.
"If it ends up being profitable, that would be welcome and fantastic, " he said. "But really it's an investment in young entrepreneurs in our country and [an effort] to try to change the business climate little by little."
Proving that businesses can be a force for positive change is particularly important in a region increasingly disillusioned with free-market capitalism, Powell said. Venezuela, Ecuador and Bolivia are all embracing socialist policies and former Sandinista commander Daniel Ortega recently won Nicaragua's presidential election with promises to do the same.
"If you can make the case that good small businesses help the community, you are going to make a stronger case as well for democratic capital-ism, " Powell said.
Terán -- who studied at Georgetown University but says he learned about entrepreneurship running a neighborhood car wash in Miami while he was attending St. Brendan's elementary school -- said Agora has about 15 other investment opportunities in the pipeline. And thanks to donations from the Dutch government and USAID, Agora hopes to be working in El Salvador and Honduras next year.
But the fate of Agora and their aid model are ultimately in the hands of companies like Vegyfrut, said Powell.
"We are putting our reputation as a nonprofit on the line with these businesses, " he said. "If they fail, you should legitimately call our model into question. But if we are successful, we hope to replicate this and make a big impact [around the world], not just Nicaragua."