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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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Finance Availability Pillar
Summit Outcome & 2011 Action Plan
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
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
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
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 √
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?
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’
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
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
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
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
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