Strive Masiyiwa is a multi-billionaire philanthropist and businessman. He believes Barbados should lead the region’s efforts to create a capital market that encourages entrepreneurship.
To create that environment, financial regulators like the Central Bank and Financial Services Commission should establish rules and incentives that encourage investment-type financial institutions, such as pension funds and insurance companies, to allocate a percentage of their investments for venture capital.
In addition, he recommended that entrepreneurship should be taught at secondary schools. This was important to help combat the effects of unemployment.
“I sense that you guys could lead the way on this in the Caribbean,” Masiyiwa said during the 47th Sir Winston Scott Memorial Lecture on Monday under the theme How Innovative Entrepreneurs Can and Do Use Philanthropy and Technology to Solve Economic and Social Issues.
“We need to do something about jobs, and the only way we can tackle that, I know, is to promote entrepreneurship . . . . It would be wonderful if high school students understood that working isn’t necessarily about getting a job, but rather being able go out and create something with others. . . . For any educational system, this should be a standard.
“Then, of course, the monetary and fiscal authorities have the tools that they turn around and say, ‘of all the investable capital, we just want one or two per cent to be put at high-risk and we will guarantee that’. Leave it to the market but if your pension funds and insurance companies could put a little bit aside as high-risk capital for which they are protected by the state and they invite skilled money managers to come forward, you could create an extraordinary ecosystem such as what’s in Israel. The beauty is that you don’t have to reinvent the wheel here,” added the Zimbabwean founder and executive chairman of Econet Global Cassava Technologies.
Masiyiwa expressed his belief that entrepreneurs will be a crucial part of building the country’s prosperity. He said that there were new funding models that could be used to assist entrepreneurs, both current and incoming. Venture capital is one option.
Tech entrepreneurs pointed out examples from Silicon Valley, America and China that show how venture capital can be used to support entrepreneurial businesses.
“The Central Bank, the monetary authorities can create incentives that allow these institutions to make one or two per cent available of what they would invest for the support of a venture capital ecosystem.
“It has to be an industry that emerges from half a dozen or so venture capital players who take the money and begin to invest in entrepreneurs, providing seed capital, providing series B, Series C [bonds] And so on. You’ve got to have that,” he said.
“But it is also critical that to the extent that [as] Private equity and venture capitalists need to have the ability to exit. Venture capital is based on how the stock market develops. They’ve got to be able to sell out their positions and move on to new positions. And the stock market themselves must also carry out reforms that allow access to new companies.”
Masiyiwa suggested that people who see success could be more inclined to accept risk.
Cleviston Haynes, Governor of Central Bank agreed that institutions must be open to providing venture capital to emerging companies.
“….Because bank loans are just more debt and what you perhaps need more of is equity. That is my spin on it,” he said.
“I think what we have always felt is that we need to create the enabling framework for business generally. It is possible to create the conditions that allow businesses to thrive if we are able create favorable macroeconomic conditions. When we speak of venture capital we are now getting to the point of access and what we have to be able to do is try to create once again an investment climate that will allow persons to be willing to invest in venture capital.”
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