03/15/2012 09:15 am ET Updated May 15, 2012

Creating a Cycle of Sustainable Change

In Silicon Valley, we deploy technologies and networks to change the world. Can we deploy these techniques in an effort to break the worldwide cycle of poverty at a scale in the millions? I believe that by supporting entrepreneurs, we can. That's why I've put 1 million of my own dollars into to prove it.

Kiva is a non-profit organization that connects people through lending to alleviate poverty. Leveraging the Internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create sustaining opportunity for entrepreneurs around the world. But Kiva, like most nonprofits, continually needs to attract new supporters to scale to its full potential. Even with 700,000 lenders in the Kiva community, and nearly $300 million in microloans to date, Kiva is just scratching the surface. Millions of people around the world are seeking the initial resources they need to create a better future for themselves and their families, and Kiva is a powerful way to provide these resources.

As a co-founder of LinkedIn, I have been working with "freemium" models for years. Freemium models have sparked new user growth for sites such as Zynga, Paypal, and Skype based on the premise that after experiencing a service for free, new users will value it enough to use their own money. I believe that a freemium model can also have a massive impact for cause-based sites like Kiva.

To help jumpstart Kiva's breakout growth, I've lent $1 million to encourage 40,000 people to try out the Kiva experience for themselves. New users can go to and take $25 from my account to lend to an entrepreneur of their choice. As the loan is repaid, they will receive updates and notes from the entrepreneur they selected to fund. After a user tries Kiva for free, they can then decide if they want to lend their own money to another borrower.

Over the past few days, more than 22,500 new users have flocked to Kiva to support thousands of entrepreneurs in more than 50 countries. More than 10,000 of these new users joined within a 24 hour period -- a number that Kiva would typically only see in a month! Together, we can make this kind of increase a sustainable growth rate that transforms the Kiva model and through doing that the lives of millions of potential entrepreneurs.

It's not just the initial sign-ups that have been promising. From Kiva's pilot last August, once people tried it, a great many went on to become regular users -- in fact, at a rate that was 3X what is typically seen with Silicon Valley freemium models. New Kiva lenders from that small pilot loaned a combined $100,000+ of their own money. With an average 98 percent repayment rate, lenders (like me!) can then relend the same money to different borrowers over and over again, creating a cycle of sustainable change.

Often only a relatively small amount of money stands in the way of Kiva borrowers and their dreams. Whether it's a family in New Orleans hoping to start a small business, or a young Bolivian woman who lacks the tuition for nursing school, Kiva gives us each the opportunity to lend a hand to these and countless other borrowers, who can then transform their lives.

By expanding Kiva's lender community, we help ensure that the spirit and promise of entrepreneurship is accessible around the world, from the largest cities to the most remote villages. As far as investments go, engaging and empowering millions of people to transform their lives is one of the greatest returns on an investment. I hope you'll join us.

Reid Hoffman is a co-founder of LinkedIn, a Partner at Greylock, Board Member of Kiva, and a co-author of the recently released book 'The Start Up of You'.

Premal Shah is the president of