The following is an excerpt from the 2023 GEN Impact Report, released at the Global Entrepreneurship Congress in September 2023. Read the full report here.
GEN Invest gets the right capital in the right hands at the right time. Whether closing the credit gap among underserved entrepreneurs, increasing an ecosystem’s investment capacity or improving individual investor performance through mentorship and training, earned trust among the GEN Invest community has laid the groundwork for effective cross border, industry wide capital, deal and knowledge sharing.
Growing a Global Community of Investor Networks
Insufficient access to capital is a common challenge for founders everywhere, especially in developing startup ecosystems and among underserved populations. At the same time willing investors still tell us there is a paucity of deal opportunities or that they lack the experience or knowledge to act on informed decisions. GEN Invest programming is growing investor networks and investment programs – whether through founder network access, training, mentoring or capacity building support.
For example, GEN’s Global Business Angels Network (GBAN) now has 94 members from 66 countries supporting each other to secure and close deals. A community of investor networks, GBAN fosters mentorship, training, and a platform for the exchange of global market insights, investment opportunities, real-life experiences and best practices.
“The Global Business Angels Network stands as a testament to the transformative potential of angel investing on a global stage,” said USA and France-based Eli Velasquez, founder of the Investors of Color Network and board member of the Angel Capital Association. “By unifying investors around shared goals and facilitating the exchange of ideas and resources, it not only fuels the growth of startups but also empowers angel investors to make a lasting impact on the world economy.”
In addition to supporting angel networks in major economies like the United States, Australia, Germany, Canada and the UK, GBAN is cultivating a shared understanding of the roles that angel investor networks, governments and international finance groups play in supporting the growth of nascent startup ecosystems.
GBAN members like Nicolas Rouhana, head of IM Capital in Lebanon, are experts in their field and regularly share their expertise with peers through GBAN. On a recent field call, Rouhana shared how his team attracted and secured funding for startups during turbulent times in 2020, when the Beirut bombing and an economic crisis gripped the nation, and venture capitalists began leaving the region.
These cross-border experience-sharing opportunities are invaluable, according to members like Nirjhor Rahman, CEO of Bangladesh Angels Network. “GBAN field calls help to contextualize our work in the greater ecosystem and industry of angel investments, and to learn about the challenges and opportunities faced by other GBAN members. I've also found value in connecting with GBAN members for one-to-one chats to share deal flow and ideas.”
At the annual GBAN Summit, held most recently with the Global Entrepreneurship Congress in Melbourne, Australia, members participated in conversations about investment regulation, educational initiatives for investors and founders, relationship-building strategies, diversity and inclusion, and emerging market dynamics. Attendees also connected with key players and new investment opportunities across global markets including Latin America, Africa, Asia, Europe, Oceania and beyond.
“Connection is fundamental for angel investment,” agreed GBAN member Maria Rita Spina Bueno, executive director at angel investor network Anjos dos Brasil. “Participating in GBAN and GEN Invest has significantly helped Anjos do Brasil in pursuing its three mission pillars of action. Firstly, as a network of investors, it enables us to pave the way for startups invested in other countries and to co-invest with those that focus on Brazil. Secondly, within our knowledge creation work, we capitalize on the exchange of experiences with other networks to develop more robust materials that align with global practices. Lastly, in the realm of public policy, having access to information and references on how countries support investments in startups is of utmost relevance in our government relations.”
As GBAN supports the growth of its member networks and fosters cross-border collaboration, countries like Lebanon, Bangladesh and Brazil are experiencing a rise in startup and investment activity.
Building Investor Skills and Opportunities
In collaboration with GEN Accelerates, GEN Invest provided comprehensive training programs tailored to aspiring and seasoned investors. Through live workshops and personalized mentoring sessions, participating investors not only enhanced their knowledge and skills but were presented with specific opportunities with founders who have been battletested by GEN’s startup programs like the Entrepreneurship World Cup, Startup Huddle or GEN Starters Club. These platforms, coupled with investor matchmaking at live events like the Global Entrepreneurship Congress, created fertile ground for deal making.
Closing the Credit Gap for Underserved Entrepreneurs
In addition to its work strengthening angel investor networks, GEN Invest expanded in 2023 to launch an initiative to increase access to credit for high-potential but credit-challenged entrepreneurs. The credit gap is a trillion-dollar problem in the United States alone, where annually there is an estimated USD $40 billion worth of unmet financing demand from Black, Indigenous and People of Color (BIPOC)-owned employers, and an estimated $1 trillion in unmet financing demand from all small businesses nationally.
To address this challenge, GEN Invest created the Equitable Access Program in partnership with fintech company Hello Alice, the Kauffman Foundation and Mastercard. The initiative launched in Spring 2023 to provide financial health technical assistance, education, and increased access to credit for high-potential but credit-challenged small business owners in the United States. While the program currently focuses on the United States credit system, GEN Invest believes the outcomes of this work will also serve as a case study for other nations to learn from and adapt to support under-served entrepreneurs within their jurisdictions.
As part of the program, GEN launched a USD $70 million Equitable Access Fund, with initial funding led by Wells Fargo, that will be developed and deployed over the next five years to improve equitable access to credit and capital amongst small business owners. The fund will provide credit enhancements, including guarantees, loan loss reserves and cash collateral deposits to financing partners to enable them to reasonably increase their risk tolerance to help unlock credit access for underserved high-potential but credit-challenged small business owners.
"We need to create more pathways for historically marginalized small businesses to grow and prosper,” said Otis Rolley, president of the Wells Fargo Foundation. “We are honored to join forces with Hello Alice, GEN, and the other partners involved to take one step closer to making equitable access to credit and capital a reality for small business owners across all industries."
The credit enhancements will allow many small business owners to access a credit card that they wouldn’t be able to otherwise. These small business owners will be provided with wrap-around credit-building education and technical assistance to help them improve and build their credit history and financial health. Critically, payment history will be reported to business credit bureaus, which will help business owners build a business credit profile. This can reduce their reliance on personal credit, personal guarantees, and predatory loans - resulting in greater financial freedom and less risk to them and their families.
The $70 million fund will unlock an estimated $1 billion in credit access for thousands of small business owners. Additionally, when credit enhancements are released as owners improve their financial health, the funding will be released to support future underserved small business owners.
This program will serve as a demonstration project to design and scale a national program to transform credit access for underserved New Majority microbusinesses across the United States. The goal is that federal and/or state governments, foundations, banks, and others will use the fund’s results to substantiate ever larger scale replication efforts to transform the small business credit system at a massive scale.
Looking Ahead
Looking ahead to 2024, GEN Invest, through the Equitable Access Program, GBAN, and investor capacity building work, aims to fortify its commitment to the investment community by enhancing programs focused on cross-border investing, acknowledging the immense potential in bridging the geographical gaps in investment; increasing the number of women and communities underrepresented among investors, augmenting tools for establishing new angel groups; training angel investors, striving to equip them with the tools and knowledge they need to succeed; and expanding its footprint to new countries and markets, broadening the program’s scope and influence to meet the evolving needs of the global investment community.
Read the full 2023 GEN Impact Report here.