University of the West Indies International Conference on

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 1. Current Status 2. Global Perspective • • historical growth trends VC industry sizes 3. Future Prospects • • Caribbean economies VC potential

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

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

VC in the Caribbean country firms capital (M$) Barbados 3 20 Jamaica 2 60 Puerto Rico 8 ? St. Lucia 1 6 Trinidad 5 20

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

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

UK Investment source: British Venture Capital Association

UK Investment / GDP

USA Investment 106, 000 source: National Venture Capital Association

USA Investment / GDP 1. 06 %

2002 VC Investment / GDP (%) source: 3 i, EVCA, Pricewaterhouse. Coopers

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

Caribbean 2002 Economies Country GDP (US$ B) population (M) GDP/capita (US$) Puerto Rico 67. 900 3. 863 17, 575 Dom Rep 21. 300 8. 600 2, 477 Cuba 13. 245 11. 300 1, 172 Trinidad 9. 371 1. 276 7, 345 Jamaica 8. 365 2. 622 3, 190 Bahamas 5. 050 0. 312 16, 193 Martinique 4. 568 0. 426 10, 723 Guadeloupe 4. 542 0. 440 10, 323 Haiti 3. 600 8. 300 434 Barbados 2. 598 0. 271 9, 595 Caymans 1. 841 0. 043 43, 305 Antigua 0. 721 0. 077 9, 426 St. Lucia 0. 677 0. 159 4, 251 Grenada 0. 401 0. 103 3, 911 St. Vincent 0. 361 0. 109 3, 308 St. Kitts 0. 356 0. 046 7, 732 Dominica 0. 258 0. 071 3, 628 Turks 0. 216 0. 021 10, 345 Anguilla 0. 112 0. 012 9, 410

Population (million) Bahamas 0. 3 Cuba 11. 3 Puerto Rico 3. 9 Caymans 0. 0 Jamaica 2. 6 Haiti 8. 3 Guadeloupe 0. 4 Dom Rep 8. 6 Barbados 0. 3 Trinidad 1. 3

GDP (US$ billion) Bahamas 5. 1 Cuba 13. 2 Caymans 1. 8 Puerto Rico 67. 9 Jamaica 8. 4 Dom Rep 21. 3 Guadeloupe 4. 5 Barbados 2. 6 Trinidad 9. 4

GDP per capita (US$ 000) Bahamas 16. 2 Cuba 1. 2 Caymans 43. 3 Jamaica 3. 2 Turks 10. 3 Dom Rep 2. 5 Antigua 9. 4 Puerto Rico 17. 6 Guadeloupe 10. 3 Barbados 9. 6 Trinidad 7. 3

VC Potential Bahamas 5. 1 0. 3 16. 2 country GDP pop /cap Puerto Rico 67. 9 3. 9 17. 6 Jamaica 8. 4 2. 6 3. 2 cutoff limits > 1. 0 5. 0 > 1. 0 0. 2 3. 0 Guadeloupe 4. 6 0. 4 10. 3 Martinique Barbados 2. 6 0. 3 9. 6 Trinidad 9. 4 1. 3 7. 3

Annual Investment Potential Assume annual investment at 0. 1 % of GDP country US$ million Puerto Rico 68 Trinidad 9 Jamaica 8 Bahamas 5 Barbados 3

Conclusions 1. Only a few Caribbean countries can sustain a local VC industry 2. VC activities, outside Puerto Rico, are small 3. Scope for new initiatives is limited 4. Experiences from other countries indicate that modest growth and longterm sustainability is achievable

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