Initiatives designed to create a bigger pool of financial resources into which startup, early-stage and growth businesses in the Caribbean can dip to consolidate their growth and expansion received a significant boost earlier this week when the World Bank Group, together with the Caribbean Export Development Agency (Caribbean Export), launched LINK-Caribbean, an investment facilitation programme designed to enable early-stage regional entrepreneurs to raise capital from private investors.
The World Bank is reportedly pumping US$1.6 million into the programme as its contribution towards the creation of a so called angel investment ecosystem across the region. The new financial investment regime provides offers facilitation grants to entrepreneurs as non-funding activities to stimulate angel investing.
Angel investors, commonly called seed investors or business angels are usually affluent individuals who inject capital into startup businesses in exchange for ownership equity or convertible debt. Some angel investors invest through crowdfunding platforms online or build angel investor networks to pool investment capital.
LINK-Caribbean is part of the World Bank’s entrepreneurship programme for innovation in region, a seven-year $20 million programme funded by the government of Canada whose objective is the creation of a supportive ecosystem for high-growth and sustainable enterprises in the region.
The programme seeks to support the growth of a structured business angel investing ecosystem in the Caribbean through the creation of a Regional Angel Investor Network (RAIN) and the distribution of supporting co-investment and investment readiness grants. RAIN will have at its disposal an online angel investing platform to connect promising companies with business angels and other early stage investors.
The programme’s co-investment grants provide supplementary funding to a maximum of US$100,000 per company while investment readiness grants are available to those firms which have investment potential. Up to US$25,000 in grant funding is available to those companies to make them attractive enough for investors to make investments.
Caribbean Export Executive Director Pamela Coke Hamilton was quoted at the launch of the programme in Barbados earlier this week as saying that it is in the interest of the regional agency “to encourage the development of a network of angels as this significantly increases the impact of angel investing which in turn influences new business development, and job creation.”
With the growth of a regional ecosystem for early-stage investing expected to help spur an acceleration on innovation and novel business ideas the launch activity in Barbados acknowledged the consequential need to address the issue of intellectual property protection for early-stage businesses. At the launch forum this week Barbados Energy Minister Darcy Boyce alluded to the need to increase the pace of work in the region “on protecting intellectual property in business ideas, and on valuing such intellectual property in early-stage businesses.”
The initiative has already allowed for the delivery of training to regional entrepreneurs and business support organizations in Barbados, Jamaica and Saint Lucia on best practices for engaging angel investors including an introduction to finance options, exits, valuations, use of investment proceeds, creating a winning pitch deck and finalizing investments.
