Funding for start-up businesses remain an area of challenge for many aspiring entrepreneurs with viable business ideas. And the Barbados Entrepreneurship Foundation (BEF) is seeking to bridge that gap with a new funding model –– angel investment.
This is being offered through its Trident Angel investor network set up about three months ago. So far, four entrepreneurs have been paired with local and regional angel investors.
BEF chairperson Melanie Jones told Barbados TODAY that she believed angel investment would play a critical role in the development of entrepreneurship in Barbados.
“I think it is a part of the future that cannot be divided from our success. I think that there is a whole entrepreneurship ecosystem which we need to have in place in Barbados, and that that entire ecosystem is the future. The Barbados Entrepreneurship Foundation is working on developing the various elements of the entrepreneurship ecosystem but angel funding for seed investees is an absolutely critical part of that ecosystem. It just really hasn’t existed in Barbados before,” said Jones.
She said the BEF recognized that most start-ups in Barbados would get seed capital from loved ones, but in many ventures if there was not enough early success “at the right speed” that money would run out.
“And you would hope that then the entrepreneur would be able to go off to the bank and get a loan. Unfortunately, the way that traditional lending happens in Barbados is that in order to get a loan you need to qualify by having some sort of asset that you can charge in the bank’s favour, and what that means is if the business fails the bank’s position is protected because they can take your asset, but you lose everything. And obviously that is not a viable or sustainable model for start-up funding. So that is where angel investment comes in,” explained Jones.
Saying that angel investment was “a wonderful” way of helping small businesses, Jones added that the BEF realized there were many educated individuals in Barbados with brilliant ideas that could be turned into workable, investable businesses that could bring returns.
“The prevailing belief in the past is that there are lots of bright young people who have ideas, but not ideas that can be translated into viable business. But we have seen already, just in the first few months of having set up this angel investor network, that there are in fact viable projects that can be attractive to investors and that this is a very important and unprecedented way in which we can provide start-up funding for young entrepreneurs,” said Jones.
Investees are able to load their information about their perspective business on the BEF’s online platform, which would be reviewed by the investors. Investors have anonymity when they review the information. They then indicate to the BEF if they are interested in meeting with any of the investees.
ALSO If you sign up for Barbados Today before independence you could WIN a 2014 Honda City! Go here for full details http://bit.ly/1oCHnej.