The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

The Government-sponsored venture capital fund’s chairman yesterday said it had not enjoyed great success with its equity investments, which represent around 40 per cent of its portfolio.  

Michael Cunningham said the the Bahamas Entrepreneurial Venture Fund was looking more to equity as opposed to loans when it came to financing start-ups.

However, many entrepreneurs believe this means that the venture fund would own their business.

“We’re trying to move more to equity, but people are not really in favour of equity because they feel we will own the company, but that’s not our intention,” said Mr Cunningham.

“If we have an equity stake it gives you a lot of breathing ground in that you don’t have to make that monthly financial commitment and, if the company fails, you don’t have to make good on the monies you would have invested in your operation.

“We want to be actively involved in what’s happening so the likelihood of success would be even greater.”

  Mr Cunningham added that if more private companies could invest in the fund, it would reduce the Government’s involvement.

“I think it would be very important if we could get a number of private equity companies to invest in the fund, thereby reducing government involvement,” he said.

“As opposed to just having the $1 million, they can take on a bigger share and they can add more  expertise and we can have less government involvement.”    

Mr Cunningham said the Bahamas Entrepreneurial Venture Fund receives some 30-40 applications on an annual basis.

“Depending on the availability of funds at the time and the amount being requested, we would approve about close to 50 per cent,” he said. “Most companies, especially with the equity side of it, we have not had great success here on the island.

“Grand Bahama has been the worst because of the economy down there. On the equity side we have not had very good success with the smaller companies. The companies themselves are not prepared to do the things that big companies do on small scale in order to be successful, such as having people to market their business properly and look at the numbers to make sure they are making sense in terms of revenues and expenses.  We don’t see much of that.

“A lot of entrepreneurs want to keep everything to themselves like a one-man operation, and in this climate you will not last very long.”

Mr Cunningham added the the Bahamas Entrepreneurial Venture Fund has still not had much success in the Family Islands, despite visiting Bimini, Exuma, Grand Bahama and San Salvador to-date.