Claudine Housen, Staff Reporter
Management consultant Aubyn Hill - NORMAN GRINDLEY/STAFF PHOTOGRAPHER
WESTERN BUREAU:
ENTREPRENEURS WILL soon be able to tap a new venture capital investment option, says management consultant Aubyn Hill.
The managing partner of Corporate Strategies Limited, Mr. Hill will be starting the new venture, Strategic Venture Capital Limited, by January next year.
BRINGING PEOPLE, MONEY TOGETHER
"Strategic Venture Capital is being established to marry the need for capital by entrepreneurs and that of providers of equity capital so that the people with the ideas (entrepreneurs) and the people with money (investors) can come together," he explained.
"When you are starting a business and you borrow money you immediately have almost a sword of Damocles over your head because whenever anything (negative) happens in the business, the lender wants their money back immediately," Mr. Hill continued.
TAKING MORE RISKS
He explained that equity investors by definition have to take a longer view so they are not obliged to pay back an equity investor every three months or every six months or even every year.
"It is taking significant more risk in the company in return for better rewards and interest rates," Mr. Hill stated.
Strategic Venture Capital Limited would not be the first such company in Jamaica, said financial analyst Keith Collister.
"I believe that venture capital in a developing country requires a different approach than in a more developed marketplace. The critical issue for success would be a much higher level of financial and operational control. For example, you might need to have a turnaround team able to take over and run a business, coupled with control of the cheque book."
TIGHTLIPPED ABOUT FUTURE PARTNERS
The sole director in the company at the moment, Mr Hill was tight-lipped about who his future partners would be but said that "some of them will be corporate investors, many of them will be local and some will be international."
With a budget of over US$10 million, and a start up staff of five, Strategic Venture Capital Limited, will invest on a project by project basis with an emphasis on the service industry to include: health tourism, education and skills building.
The head office for Strategic Venture Capital Limited will be at 35A Duke Street in Kingston where Corporate Strategies is also headquartered.
