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Venture Capital in the Caribbean Current Status, Future Prospects

University of the West Indies International Conference on Business, Banking and Finance. Venture Capital in the Caribbean Current Status, Future Prospects. Jelle Sjoerdsma 27 April 2004. Agenda. Venture Capital in the Caribbean Current Status Global Perspective historical growth trends

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Venture Capital in the Caribbean Current Status, Future Prospects

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  1. University of the West Indies International Conference on Business, Banking and Finance Venture Capital in the CaribbeanCurrent Status, Future Prospects Jelle Sjoerdsma 27 April 2004

  2. Agenda Venture Capital in the Caribbean • Current Status • Global Perspective • historical growth trends • VC industry sizes • Future Prospects • Caribbean economies • VC potential

  3. Caribbean VC Status • 1492: Columbus “discovered” the West Indies after receiving VC • early 1990’s: several local initiatives in some countries • mixed results: failures, mergers, survivors • Puerto Rico is in class by itself

  4. Puerto Rico Investment (M$) 1,000 source: Puerto Rico Venture Forum

  5. VC in the Caribbean

  6. Status is Mostly Immature • Puerto Rico is a maturing market, with strong influence from USA • Rest of Caribbean is • led and managed locally • only a few active firms per country • small in scale • making slow progress

  7. Global Perspective VC trends in other countries • historical growth • economic contributions to GDP

  8. UK Investment source: British Venture Capital Association

  9. UK Investment / GDP

  10. USA Investment 106,000 source: National Venture Capital Association

  11. USA Investment / GDP 1.06 %

  12. 2002 VC Investment / GDP (%) source: 3i, EVCA, PricewaterhouseCoopers

  13. Caribbean Prospects Top-down review of economies VC Potential • countries • investment sizes Conclusions

  14. Caribbean 2002 Economies

  15. Population (million) Bahamas0.3 Cuba11.3 Puerto Rico3.9 Caymans0.0 Guadeloupe0.4 Jamaica2.6 Haiti8.3 Dom Rep8.6 Barbados0.3 Trinidad1.3

  16. GDP (US$ billion) Bahamas5.1 Cuba13.2 Puerto Rico67.9 Caymans1.8 Dom Rep21.3 Guadeloupe4.5 Jamaica8.4 Barbados2.6 Trinidad9.4

  17. GDP per capita (US$ 000) Bahamas16.2 Turks10.3 Cuba1.2 Antigua9.4 Dom Rep2.5 Caymans43.3 Jamaica3.2 Guadeloupe10.3 Puerto Rico17.6 Barbados9.6 Trinidad7.3

  18. VC Potential Bahamas5.1 0.3 16.2 countryGDP pop /cap Puerto Rico67.9 3.9 17.6 Jamaica8.4 2.6 3.2 Guadeloupe4.6 0.4 10.3 Martinique cutoff limits > 1.0 1.0 5.0 > 1.0 0.2 5.0 > 1.0 0.2 3.0 Barbados2.6 0.3 9.6 Trinidad9.4 1.3 7.3

  19. Annual Investment Potential Assume annual investment at 0.1 % of GDP

  20. Conclusions • Only a few Caribbean countries can sustain a local VC industry • VC activities, outside Puerto Rico, are small • Scope for new initiatives is limited • Experiences from other countries indicate that modest growth and long-term sustainability is achievable

  21. Q & A www.dynamic-equity.com

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