The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Government-sponsored venture capital fund is set to receive a total $1.5 million funding injection in 2013, its administrator confirming yesterday that it received the first tranche on Monday.

Edward Rolle, a corporate restructuring specialist at Baker Tilly Gomez, the accounting firm that acts as the Bahamas Entrepreneurial Venture Fund’s administrator, told Tribune Business that receiving the funds would enable it to start the year “with a bang”.

While the initial financing provided by the Christie administration was “a bit less than” $1 million, Mr Rolle explained that it would enable the Fund to move on 15 start-ups “in the pipeline” that it was interested in funding.

Disclosing that the Government financing would be injected into the Fund over several months, Mr Rolle said that by the start of the 2013 second quarter it would be “close to the position we want to be in”.

He added that the financing’s receipt provided further evidence that the Government realised it needed to “jump start the economy”, and stimulate the “force that drives” it - entrepreneurs, start-ups and small businesses.

“We should get about $1.5 million this year,” Mr Rolle told Tribune Business. “That’s going to be spread over a few months.

“It helps us achieve what we want to achieve. It was a serious commitment on the Government’s behalf. They have to jump start the economy.”

He added: “We got the first tranche yesterday [Monday], so we’re moving along with one or two projects. The timing’s excellent, because we have some projects in the pipeline that we needed to move on.”

Mr Rolle told Tribune Business that 15 viable ventures were currently before it. Many were technology-based, and included ideas such as electronic installation, computer-related projects, a waste management venture and cosmetic surgery.

“Some of these projects we’ve had for a few months, and some of those individuals are ready to move,” the Baker Tilly Gomez executive said.

“The funding was a great help, and was much needed. If we can keep operating like this, the outlook looks a lot brighter.”

Mr Rolle said the Fund anticipated receiving further financing from the Government by the end of January.

“Within the first quarter we should be doing well,” he told Tribune Business. “Running into the second quarter, we will almost be in the position we want to be in.

“The Fund plays a major role with start-up companies. It will position the Bahamas to really get the force that drives the economy.”

Tribune Business revealed in November that the Fund was seeking a further $5 million funding injection from the Christie administration over the next three years, as it moves to focus on equity investments and ‘quality over quantity’.

The financing will also help some of its existing 57-strong start-up portfolio, who are looking to come back for their second round of financing.

Although not quite a recapitalisation, Mr Rolle previously said the Fund had effectively used up the $4 million it had received from the Government during its first seven-eight years in existence.

But he told Tribune Business that the 60 per cent success rate of firms the Fund had financed vastly exceeded the 10 per cent norm for the US venture capital industry, adding that without its support many start-ups/entrepreneurs would not have made their ideas reality.

And, looking to the immediate term, Mr Rolle said he and the Fund’s Board wanted to “behave more like a venture capital fund” and focus on taking 20-35 per cent equity stakes in the companies they financed.

To date, the Bahamas Entrepreneurial Venture Fund has financed 57 different Bahamian start-ups and entrepreneurs. Some 43 have received debt financing, worth a collective $2.2 million, while the remaining 14 have seen it take equity stakes in their business valued at a total $1.7 million.

The Fund can provide no more than $100,000 in debt financing to a business, while its maximum equity investment is set at $200,000.

“In the upcoming year we’re hoping to focus more on the equity-type projects, and work with fewer than we normally do. The survival of those projects we help will be longer by focusing on less,” Mr Rolle told Tribune Business earlier.

“We’re trying to move away from debt financing. We’re trying to behave more like a venture capital firm by taking 20-35 per cent stakes for five years.”

He conceded that in recent years the Fund had been limited in what it could finance due to its original $4 million being almost exhausted.