Session Description
Are you an investor or policymaker in an emerging ecosystem? Explore how to transform investment frameworks to reshape the investment future.
With a focus on innovative capital mobilization strategies, participants will gain insights into experts’ visions and efforts to build thriving investment ecosystems across Africa, South Asia, Latin America, and the Caribbean.
Session Recap
(AI-generated session recap made available by Google NotebookLM)
This dynamic session brought together practitioners and investors from South America, South Asia, the Caribbean, and Africa to discuss the critical topic of innovating investments mobilization, focusing particularly on how to unlock and channel domestic capital within their regions. Far from a theoretical discussion, the panelists shared candid insights rooted in their firsthand experiences as entrepreneurs, ecosystem builders, and bankers, highlighting both the significant barriers faced and the innovative approaches being implemented to build vibrant investment ecosystems. The conversation underscored that while external investment is important, catalyzing funding and support from within is paramount for fostering sustainable growth in these emerging economies.
Outline
Introduction: Moderator introduces the topic and panelists representing diverse economies often underrepresented in international investment flows. Emphasis on the panel's practical experience in venture capital, angel investing, banking, and entrepreneurship.
- Identifying Significant Barriers: Panelists from Bolivia, Nepal, the Caribbean, and South Africa discuss the key challenges hindering capital mobilization in their respective regions.
- Economic challenges: Macroeconomic instability, low foreign exchange reserves, currency scarcity (e.g., lack of dollars), inflation, and regulatory inefficiencies.
- Ecosystem gaps: Thin pipeline of fund managers, lack of developed venture capital/angel investor networks, duplication of ecosystem efforts (incubators, accelerators) without building on each other.
- Talent drain: Startups and talent moving abroad due to difficulties in raising domestic investment.
- Trust deficits: Lack of trust in government, financial institutions, and the legal system, particularly challenging for diaspora investment.
- Cultural issues: Viewing failure as a badge of shame rather than a learning opportunity.
- Funding vs. Support: Entrepreneurs often being over-mentored and underfunded. The environment or "soil" for ideas is as crucial as the funding or "water".
- Exploring Innovative Vehicles and Solutions: Panelists share strategies and approaches to address these barriers and mobilize capital.
- Country Introspection: Identifying specific sectors where the country can become a global arena for solutions and attracting focused investment.
- Corporate Collaboration: Bridging the gap between traditional corporate sectors and startups through hybrid models and cross-pollination.
- Ecosystem Building: Cultivating community, creating no-barrier platforms for startups and investors, and fostering angel networks.
- Diaspora Engagement: Leveraging diaspora capital through regulated vehicles (like investment holding companies or public listings) to overcome trust issues and provide transparent investment avenues back home. Becoming "activist investors" to influence traditional institutions.
- Banking Innovation: Traditional banks evolving into entrepreneurial support organizations (ESOs), leveraging alternate data for derisking, exploring new asset classes for collateral, and partnering with non-bank financial institutions.
- Public-Private Partnerships: Recognizing that challenges cannot be solved by policymakers or corporations alone.
- Non-Financial Support: Emphasizing the importance of contributing time and talent, not just treasure, to support entrepreneurs and the ecosystem.
- Addressing Derisking: Practical advice for entrepreneurs on managing payment history and even paying themselves to improve perception by financial institutions.
- Q&A Session: Panelists address specific questions from the audience regarding overcoming the trust deficit with diaspora capital and practical ways entrepreneurs can de-risk themselves or be perceived as less risky by investors.
- Concluding Remarks: Final thoughts on the need for collaboration, leveraging ecosystems, and the potential for significant change driven by local action and pooled resources.
Notable Quotes
- "Entrepreneurs are over mentored and underfunded, right? Well, that's the biggest problem we have in the Caribbean is we have a cultural issue. We start by looking at failure as a badge of shame, not a badge of honor." - David Mullings, Blue Mahoe Holdings
- “Funding is only just part of the issue. ... What about the soil? The soil and the environment to which the idea is being planted in." - Oswul, Moderator
- "I think everyone in this room has three things they can contribute. Regardless of whether you're a funer, an ecosystem builder, an entrepreneur, you have time, talent, and treasure. Those are three things we all have. Give one of those to entrepreneurs. Give one of those to the ecosystem." - David Mullings, Blumo Holdings
Key Takeaways
- Ecosystems Matter: Building a robust local ecosystem with accessible networks, mentorship, and support structures is as crucial as providing direct funding.
- Diaspora Power: The global diaspora represents a significant, underutilized source of capital, knowledge, and trust that can be mobilized through structured, transparent, and regulated investment vehicles.
- Derisking is Key for Finance: Traditional financial institutions rely on data and need ways to mitigate risk. Innovations in leveraging alternate data, recognizing new asset classes, and advising entrepreneurs on financial behavior (like payment consistency) are crucial.
- Shift Culture Around Failure: Overcoming the cultural stigma associated with entrepreneurial failure is vital to encourage risk-taking, learning, and repeat entrepreneurship necessary for ecosystem growth.
- Beyond Just Money: Everyone can contribute to the ecosystem with their time and talent, not just financial resources. Collaboration, learning from peers, and providing non-financial support are essential components of success.
Resources Mentioned
- African Bank
- VC Association of Bolivia
- Babasu (a fund in Bolivia)
- Nepal Angels Network
- Blue Mahoe Holdings / Blumo Capital
- Branson Center of Entrepreneurship Caribbean
- Future Barbados
- Pista oo (a hybrid model in Bolivia)
- GEN Africa
- NASDAQ (listing platform)
- Specific individuals highlighted for their roles: Tommy Davis (African Angels Network), Padma Ruparel (Indian Angel Network), Vivian Angulo (Bolivia), Bashall (South Asia), David Mullings (Caribbean), Edna Mon (South Africa).
Action Items
- Individuals from countries lacking barrier-free platforms for startups/investors are encouraged to become changemakers and help build these networks.
- All participants are encouraged to contribute their time, talent, or treasure to support entrepreneurs and the ecosystem.
- Diaspora members are encouraged to pool resources and invest back home, considering becoming activist investors to drive change in traditional institutions.
- Entrepreneurs are advised to focus on consistent payment history and even prioritize paying themselves to improve their financial data profile for potential investors and banks.
- A need for more public-private partnerships and research into specific local contexts (like microenterprises) was identified.
- Collaboration and learning from one another across different regions is encouraged to build effective ecosystems.
- The idea of a special follow-up session focused specifically on derisking strategies with Edna Mon was suggested.
