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Pillar Presentation - Finance Availability


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Presentation of the ideas generated from the discussions, the gaps, medium to long term plans, priority areas for 2011.

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Pillar Presentation - Finance Availability

  1. 1. Finance Availability Pillar Summit Outcome & 2011 Action Plan
  2. 2. Mission Increase availability of equity & debt financing options available to Entrepreneurs (of all stages and sectors) in Barbados in order to be the #1 Entrepreneurial Hub in the World by 2020
  3. 3. Measures of Success 2011  Finance Web portal launched online by 1 April 2011  4 Business Finance workshops offered covering capital structure and financing alternatives in 2011 (consider Kauffman Fasttrac program)  One or more Angel Investor Groups activated:  Invests in 10 Ventures in 2011  Professional and other groups help companies prepare to pitch and refer entrepreneurs to angels  Possible tax incentives to Angels
  4. 4. What does World Class look like?  World class investors to world class entrepreneurs  Understand your business idea ‘domain knowledge  Willing to share risk & rewards  Trust  Responsive  No ‘pie in the sky’ valuations
  5. 5. What does World Class look like? Product/Situation Barbados Today World Class Requirement Micro-enterprise Loans √ √ Active Angel Investors √ Active Venture Capital √ Venture Debt √ “Growth Capital/PE” √ Mezzanine Financing √ Senior Bank Debt √ √ “Frictionless” Foreign Investment – Central Bank √ Advisor Ecosystem √
  6. 6. Benchmark / Indicators World Class Barbados There is no “one size fits all” for financing entrepreneurial ventures at different stages (eg start-up) and sectors (eg services) – equity is critical to ensure B/S strength Full range of Financing vehicles exist Limited – micro and bank loans – little to no equity Culture must accept role of outside equity investment in high-growth entrepreneurial companies – “smaller piece of bigger pie” Understood as a premise for high growth – more than just $ Chicken vs. egg? Is it culture or lack of availability – younger group - latter Private sector “Ecosystem” that supports company formation and financing – attorneys, banks, lawyers etc. “discount” fees in early years and have programs to support new business development Long-term view – grow your future market leader pipeline “One fee fits all”? No commitment to ecosystem Stable government policy – frictionless opportunity for foreign investment and repatriation (subject to tax rules etc.) Tax regimes can be complex but no FX/CB restrictions CBOB “sand in the gears” Where is Barbados on the Benchmark Indicators?
  7. 7. Situation: Barbados characteristics Individual traits  Lack of information available on how to access funds  Risk averse – investments are typically long term & fully guaranteed with limited ‘skin in the game’  Reluctance to give up control for equity financing  Businesses are built not sold – ‘exit strategy is counter cultural’
  8. 8. Situation: Barbados characteristics System traits  Banking system is not set up to encourage entrepreneurs  Not yet a truly competitive market  Regulatory environment hinders equity driven investment  Protectionist – constraints in free trade  Investments are typically small scale & ROI expectations are low
  9. 9. Narrowing the gap 1. Educate Barbadians on Financial ‘language’ and types of investment available to raise capital 2. Lack of government support & policies directed at promoting the availability of finance 3. Lobby Government for regulatory reform 4. Work with Government & Central Bank to develop incentives and breaks for entrepreneurs 5. Relax FOREX controls & implementation of credit bureau solutions
  10. 10. Key Themes  Fear of Failure – less acceptable than in other cultures  Role of angel investment in developing markets  Reform to Pension fund regulation  Foreign Direct Investment - raise profile of Barbados brand to international entrepreneurs
  11. 11. What Why When Who Status Remarks /Actions Measures Create a web portal • Source for Information & Education on finance • Promote key events April 2011 Establish an Angel investor network in Barbados • Act as a source of capital for start ups Jan 2011 Explore establishing a dedicated Venture Capital enterprise growth fund • Raise new sources of capital Nov 2011 2011 Action Plan – Top 3 priorities
  12. 12. Reconfirm Mission Increase availability of equity & debt financing options available to Entrepreneurs (of all stages and sectors) in Barbados in order to be the #1 Entrepreneurial Hub in the World by 2020