“For the law was given by Moses, but grace and truth came by Jesus Christ” – John 1:17
Last Friday night we successfully launched the Barbados Entrepreneurs’ Quick Response Venture Capital Fund (VCF) at George Washington House in the historic surroundings of the Garrison. The journey began 23 years ago when I visited Boston in search of venture capital knowledge which I thought could contribute to the growth of economies in small states and emerging nations. Indeed, it was my observation that entrepreneurial activity had been enhanced both in Silicon Valley and in Boston, by the growth of the venture capital market and, hence, it was my desire to replicate that system in the Caribbean.
I returned to Barbados “bright-eyed and bushy-tailed” all ready to make something happen. There were two interesting responses to my presentation. The one from the Governor of the Central Bank and the other from the Head of the Barbados Shipping & Trading Co. The Governor proposed that the reserve requirement from commercial banks, to be lodged at the Central Bank, could be reduced and the difference used to capitalize a Venture Capital Fund. As far as I recall, the commercial banks’ lobby was very strong at the time and that proposal never took root. The other interest from BS&T actually resulted in the concept of intrapreneurship where the BS&T Directors provided a sum of money to encourage internal entrepreneurs to come up with new ideas for the benefit of the company.
Over the next 12 years, I continued with my interest in entrepreneurial development which received a boost after my first real visit to Singapore in 1993. At that time I had a fifteen-point model for entrepreneurial development. I was hired as a consultant by the Caribbean Development Bank in 1998 for just over two years to look at innovative ways of diversifying the economies in the Caribbean with a focus on service exports. In a nutshell, how do we replace “sunset industries” such as sugar and bananas with “sunrise industries” based on the export of services?
In 2001, I worked with Mr. Grenville Phillips (now Dr. Grenville) corporate and finance consultant, to establish The Caribbean Business Enterprise Trust Inc. (CBET). CBET became operational as a Caribbean catalyst turning concepts into commercial realities. We circulated an Information Memorandum in order to raise Permanent Subscribed Capital for CBET and three Central banks in the region, five commercial banks and the St. Lucia Office of Private Sector Relations (OSPR) responded positively.
In the period (2001 – 2006), after this initial round of Permanent Subscribed Capital, CBET, as a virtual organisation, became financially self-sufficient operationally. The sources of revenue came from mounting High Impact Growth Strategy (HIGS) workshops to develop new ideas; Strategic Visioning Retreats to re-engineer enterprises; and the preparation of Business Plans. Indeed, with the help of the 4P Group Inc. in Atlanta; Horticultural Business Solutions Inc. and Calidad Investment & Financial Services Inc. in Barbados; we were able to develop over 20 potentially viable global market oriented businesses in sectors such as Board Games, Renewable Energy, Communications, Agro-Industry, ICT, Creative Arts, Film, Education, Sports, Consulting and Health & Wellness.
But, alas, there was a road block to our progress – there was no readily available investment finance for start-up enterprises. Indeed, the mantra from traditional financial service providers was usually that “we do not fund start-up enterprises”.
The first disaster arising from this was that this plethora of potentially good ideas never saw the light of day, thus robbing the entrepreneurs of a sustainable livelihood and inhibiting the rate of growth of taxes for the Government. The second disaster was a set of frustrated entrepreneurs from whom I had to run for cover, having taken them so near and yet so far from the border of the promised land. The ultimate disaster, of course, is that failure to convert these good ideas into commercial reality, nhibited the quest to enhance socio-economic well-being for us all.
In 2007, we then had to go back to the drawing board and execute a road block removal process to deal with three issues: (1) sourcing business ideas with the DNA of an elephant; (2) high failure rates for start-up enterprises (80-90% in the first two years of operation); (3) obtaining timely access to appropriate finance.
The issues were addressed as follows: “sunrise industries” with the DNA of an elephant turned out to be in abundance. These issues were addressed by the advent of the shepherding which would reduce the failure rate to 20%; and seed and venture capital funding, by the public and private sectors, which would provide the financial solution.
The Prime Minister, in his address at the launch of the Venture Capital Fund (www.bimventures.com), held on the first anniversary of the advent of the Seed Capital Fund, confirmed the Government’s incentives to the private sector to invest in the VCF. The six business enterprises, which were included in the pilot phase, were showcased at the launch and the entrepreneurs, along with their Shepherds, gave testimonies, as to the current success of the CBET Shepherding ModelTM.
We now intend to march forward in 2010 formally assessing for admission the many prospective entrepreneurs who are already in the pipeline. Our target is to have 4-5 start-up projects every six weeks and 35-40 per annum, recognizing that this exuberant giving and receiving, this endless knowing and understanding, will all come through Jesus, the Messiah.