SSLVC, the venture capital arm of Stocks & Securities Ltd, is in the business of expanding the available capital of businesses in Jamaica. As a stand-alone company with its own chief executive officer, the company has the mandate from parent company, SSL Barbados, to find companies that are seeking not just financing but essentially a business partner to help them move the dial on their revenue so that all parties involved enjoy greater profits.

In speaking with Mark Croskery, executive director of SSL Barbados, the key focus is on young entrepreneurs who are determined to make it in Jamaica and want a partner equally committed.

We then spoke to the man in charge of SSLVC, Drew Gray, to get a better understanding of what exactly a venture capital fund in Jamaica does differently from a commercial bank.

Gray holds an MBA from the University of Notre Dame and has previously worked for Scotiabank and at Gray’s Pepper Products as manager for corporate stability and development and most recently at Royal Bank of Canada in group risk management.

Dennise Williams (DW): As the economy becomes more service-oriented, in what ways have venture capitalists come in to support the change in the types of entrepreneurs that are out in the market place seeking financing?

Drew Gray (DG): We’ve seen a shift in the young entrepreneurs in the market as they are more open to VC funding in exchange for equity in their businesses because they realise the cash injection is only one component of the value we bring, the others are business development, strategy, recruitment and corporate governance. With all these benefits that VCs bring to the table they have realised the huge value that partnering with the right VC will bring, resulting in exponential growth in the business.

Also SSLVC is in the unique position of being majority owned by SSL Jamaica which has its own investment brokerage house which will serve as an exit platform for VC companies. Also the sister company Dolla which can offer debt funding to VC investments for short-term working capital needs, more quickly than traditional bank financing.

DW: In seeking to find suitable companies to invest in, what is the principal strategy for your venture capital? What makes a company worth your time to help them make greater profits?

DG: SSLVC will focus on making investments into new businesses that have promising technology, an innovative business concept, or are existing businesses that are seeking rapid growth within their field. Or if we are investing in a distressed company the impediments to business have to have a clear and actionable remedy. Lastly there has to be a run way to an exit within three to five years where we can realise our initial investment.

DW: In what way is SSLVC different from angel investing and business acceleration?

DG: Angel investing is typically done by high net worth individuals into a business idea or a very nascent business. Essentially angel investing is done to start the business versus investing in the actual viability of business like what a venture capital fund would do. SSLVC will focus to early to mid-stage companies and enter funding post any angel investor; we normally refer to these rounds of funding as series A or Series B funding.

DW: In the United States, the industries that venture capital funds like are related to internet-based businesses, genetic engineering, speciality retail stores, multimedia and software firms. Could you say the same for Jamaica and if no, then what are the industries that attract venture capital attention?

DG: With the advent of globalisation we are seeing a good amount of technology and internet-related companies in our deal pipeline, simply because Jamaica offers high-quality individuals at competitive prices and we do not face the same language or time difference barriers that you would encounter in, say, India, we also have a location advantage as we are close to North America.

DW:According to Harvard Business Review, “More than 80 per cent of the money invested by venture capitalists goes into building the infrastructure required to grow the business — in expensive investments (manufacturing, marketing, and sales) and the balance sheet (providing fixed assets and working capital).” In Jamaica, is it any different and in a typical day with your clients, where would your major focus be? The expense side or the balance sheet of the business?

DG: Right now we have a diverse suite of companies so our strategy will be company specific. For example, we provide a capital injection for one of our companies to invest in a fleet of vehicles so that it could execute on its business commitments. Another company we are in active dialogue with will use the capital we provide to build out its staff compliment.

DW: As CEO, in any given day, what gets most of your attention? Identifying and attracting new deals, monitoring existing deals, negotiating investments, serving as director and monitor of a company, recruiting management to assist the target company, assisting in outside relationships to assist the target company, allocating additional capital to the most successful deals or assisting with exit options?

DG: All of the above! It’s definitely a fast-paced and demanding job, but what makes it interesting is that no day is the same.

DW: At what point in the SSLVC life cycle would the average retail investor be allowed to participate? Would there ever be a fund of VC funds from SSL? Again, returning to the Harvard Business Review, “The venture capitalist buys a stake in an entrepreneur’s idea, nurtures it for a short period of time, and then exits with the help of an investment banker.” So share the way that would work in our local market.

DG: Typically venture capital and private equity were reserved to high net worth individuals or pension funds. What’s unique about SSLVC is being a publicly traded entity the average retailer can invest today and have exposure to the upside of our portfolio companies. Also, we plan to exit most investments via IPO so again the average retail investor will be allowed to participate.