Kevon McIntosh, CA, CPA.
The enterprise capital market in Jamaica and the broader Caribbean has lengthy been seen as an underutilised device for financial transformation. Whereas the idea of high-growth start-ups receiving funding in alternate for fairness is nicely established in additional developed markets, the area has struggled to construct an analogous ecosystem. This isn’t because of an absence of entrepreneurial expertise—Jamaicans and Caribbean nationals have lengthy demonstrated resilience and creativity—however reasonably because of structural obstacles that make it troublesome for enterprise capital to flourish.
One of many largest challenges is the supply of institutional capital. Enterprise capital thrives on affected person, risk-tolerant buyers who perceive the long-term nature of returns. Nevertheless, in Jamaica and the Caribbean, most institutional buyers—similar to pension funds, insurance coverage firms, and banks—lean towards fixed-income securities and actual property, the place returns are extra predictable. The standard investor mindset is one in all warning, and the thought of inserting bets on early-stage firms with no speedy profitability stays a tough promote.
Authorities-backed initiatives and growth banks have tried to fill the hole, with the Growth Financial institution of Jamaica (DBJ) enjoying a key function in fostering entrepreneurship via funding and assist programmes. Whereas these initiatives have been useful, they don’t seem to be sufficient to construct a really strong enterprise capital ecosystem.
Personal capital must enter the house in a significant method. The issue is that many native buyers nonetheless battle to see the upside, and with out profitable case research of high-growth exits, the scepticism stays.
This funding hole has pressured many Jamaican start-ups to look past native buyers and search capital from abroad enterprise funds. Organisations like Techstars and Morgan Stanley Inclusive Ventures Group
have stepped in to supply important early-stage financing, validating the potential of Jamaican entrepreneurs. Whereas worldwide funding is a optimistic growth, it additionally highlights the weaknesses of the native ecosystem. It raises the query: why aren’t extra Caribbean buyers backing their very own start-ups? The presence of worldwide funds ought to complement, not substitute, a robust home enterprise capital market.
Past the capital scarcity, one other problem is the small market measurement of particular person Caribbean nations. In contrast to start-ups in North America or Europe, which may scale quickly inside their giant home markets, Caribbean start-ups should suppose internationally from day one. This will increase the price and complexity of scaling, making it even more durable to
entice funding. Buyers hesitate because of a perceived lack of scalability, whereas start-ups battle to develop with out the mandatory funding, making a irritating cycle of stagnation.
Even when companies do handle to scale, exiting the funding stays a problem.
Enterprise capitalists depend on clear pathways to exit—IPOs, acquisitions, or secondary market gross sales—to generate returns. In Jamaica and the Caribbean, IPOs are rare, and acquisitions occur on a a lot smaller scale in comparison with developed markets. The Jamaica Inventory Trade (JSE) Junior Market has supplied some alternatives for SMEs to go public, however the quantity remains to be too low to maintain a vibrant VC ecosystem.
The absence of secondary markets for personal fairness additional exacerbates the issue, making it more durable for enterprise capitalists to liquidate their positions when wanted.
Regardless of these challenges, there are clear alternatives for enterprise capital to take root within the area. The rise of the digital economic system, notably in fintech, e-commerce, and on-line companies, has created new avenues for scalable companies. Corporations like HeadOffice Inc, visuEats, QuickCart (Techstars’24) and others have demonstrated that tech-enabled companies can achieve traction within the area, however they want capital to scale. The Caribbean diaspora, which holds vital wealth and curiosity within the area, presents one other untapped supply of funding capital. Structured diaspora-led enterprise funds might assist bridge the funding hole whereas maintaining capital flows throughout the area.
One of many areas that should be strengthened to assist the expansion of enterprise capital is the function of accelerators and incubators. The Caribbean’s start-up assist ecosystem remains to be too fragmented and, in lots of instances, too short-term in its focus. Lots of the current programmes present surface-level steerage however lack the depth required to create really investible companies. To really domesticate a pipeline of high-quality start-ups, accelerators and incubators have to be extra strong, structured, and long-term of their method. Operating 9-to-12-month programmes that present intense mentorship, structured enterprise growth, and entry to capital would make sure that entrepreneurs are given the correct runway to refine their enterprise fashions, strengthen their groups, and place themselves as enticing funding alternatives.
This prolonged timeframe would enable start-ups to work via the important levels of product-market match, buyer acquisition, and operational scalability, reasonably than dashing to hunt funding with half-baked enterprise fashions. Programmes shouldn’t solely present coaching but additionally provide structured funding alternatives at totally different levels of progress—whether or not via angel buyers, government-backed seed funding, or company enterprise capital initiatives.
Along with accelerators and incubators, company enterprise capital presents one other underutilised alternative. Some corporations, together with First Angels Jamaica and sure funding corporations, have began partaking with start-ups, however this must occur at a a lot larger scale. Established Caribbean firms ought to contemplate launching company enterprise arms to spend money on or associate with promising start-ups that align with their strategic objectives. This would offer start-ups with much-needed capital and mentorship whereas permitting giant companies to faucet into new improvements that would strengthen their aggressive benefit.
For enterprise capital to really take root in Jamaica and the Caribbean, a broader cultural shift is required. Buyers should recognise that whereas the area could not but have an extended historical past of venture-backed successes, this doesn’t imply there isn’t a potential—it merely means the ecosystem remains to be in its early levels. The primary wave of profitable exits would be the key to unlocking future investments, and the area should do every part attainable to make sure that these early start-ups succeed.
The Caribbean is brimming with untapped expertise and innovation, however with out the suitable monetary ecosystem, these concepts won’t ever attain their full potential. Enterprise capital, if nurtured appropriately, may very well be the lacking catalyst for financial enlargement, technological development, and sustainable job creation throughout the area. If we spend money on the suitable buildings—robust accelerators, long-term funding mechanisms, and correct exit pathways—Jamaica and the broader Caribbean might remodel right into a hub for innovation, reasonably than only a area that watches from the sidelines as international markets evolve.
Kevon McIntosh, CA, CPA, RPA, is an Assurance and Advisory Accomplice at Signature Creed & Associates. With over a decade of expertise in audit, non-public fairness, and monetary advisory, Kevon has labored extensively in monetary companies, asset administration, and company finance.
