pillar presentation - finance availability
DESCRIPTION
Presentation of the ideas generated from the discussions, the gaps, medium to long term plans, priority areas for 2011.TRANSCRIPT
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Finance Availability Pillar
Summit Outcome & 2011 Action Plan
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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
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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
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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
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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 √
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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 ofFinancing 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 -
latterPrivate 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?
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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’
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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
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Narrowing the gap1. 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 reform4. Work with Government & Central Bank to
develop incentives and breaks for entrepreneurs
5. Relax FOREX controls & implementation of credit bureau solutions
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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
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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
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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