Last week, Entrepreneurs Across Borders (EAB) held a two-day conference at the AC Hotel Kingston, combining both venture capital ecosystem development and social impact entrepreneurship.

This was actually the fourth annual Beyond the Beach conference it has staged in Jamaica, and is a partnership with Silicon Caribe, an entity founded by local technology conference guru and information technology entrepreneur Ingrid Riley. Riley has been working in the regional technology ecosystem since the 1990s.

The founder of EAB, Martin Babinec, is also the founder of New York Stock Exchange-listed Trinet (a human capital management company) who realised how much he had benefited from his company being located in the most entrepreneur-supporting place on the planet — Silicon Valley.

Despite correctly spotting early the macro trend of American businesses needing to outsource their increasingly complex human resource functions, he suffered the near-death business experience typical of most small start-ups. However, with angel support and refocusing his business model on fast-growing small- and mid-sized Silicon Valley companies, he managed to grow his business into one of the largest players in the professional employer organisation space. At the conference, he stated that in Silicon Valley “I realised I had been blessed to be surrounded by people who wanted to help me as a first-time entrepreneur”.

He compared this win-win innovation ecosystem with the negative mindset of the one where he grew up, Upstate New York, where manufacturing had suffered extensive de-industrialisation over many decades, and, despite a legacy of great universities, was now an area that exported its human resource to the so-called magnet cities.

Having started Upstate Venture Connect — a non-profit devoted to accelerating the growth of start-ups and providing seed funding — he is now seeking to replicate this model overseas, with Jamaica, a major talent-exporting country, as his first overseas venture. A fuller account of his “entrepreneur’s action plan to create change in your community” is outlined in his brilliant book More Good Jobs.

The first presentation, ‘Unlocking Diaspora Capital’, addressed the issue of why seed capital in the Caribbean was so scarce and what needs to change. Alain Leroy, author of the about-to-be-launched book Venture Philanthropy Blueprint argued that Caribbean entrepreneurs are typically earlier stage and lack the same access to the traditional “friends, fools, and family” financing round found in more developed countries.

More fundamentally, the idea driving Silicon Valley venture capital of one in 100 chance “moonshots” creating unicorns — US$1 billion-valued enterprises driven by US$1-billion revenue possibilities — is usually not applicable to the Caribbean due to our small market size. A more realistic goal for the region is 100 US$10-million companies.

Importantly, while such investments may be more likely to be made by impact investors, he believes the return on investment could actually be better on average due to the very high failure rate of the bets of traditional venture capital, particularly if impact funders and entrepreneurs work together to invest not just in an idea but in the infrastructure to generate a suitable pipeline of projects.

In the question-and-answer period, it was noted that Jamaica is still operating under the 1903 Partnership (Limited) Act, because even though a new Act was passed in 2017, we await the regulations to make it operational.

Another very important segment was ‘What Entrepreneurs Get Right — and Wrong — About Investors and Capital’ with Martin Babinec, Ugo Ikemba of locally based Caribbean venture capital fund Mscale, and US entrepreneur Peter Dean. It was noted that most Caribbean entrepreneurs are unrealistic with respect to valuation (possibly the result of reality TV programmes like Dragons’ Den and Shark Tank). Validation of one’s idea is not a cheque from an investor (which is just a bet on you as most funded companies don’t make it) but a cheque from a customer. All Caribbean founders need to think globally and have skin in the game.

Babinec argued that the best entrepreneurs are not in it for personal glory or wealth, but are seeking to solve a problem and give of themselves to help others along the way. In seeking to close the gap between their current reality and their vision, they learn they can’t do it alone, and, therefore, consciously decide to give more than they get rather than being simply transactional. Babinec shared that when he invests in companies, he avoids transactional entrepreneurs. This accords with my own personal experience of watching the success of two regional unicorn founders: one up close and one at a distance.

Other segments included tracking the progress of Jamaican start-ups with investments from prominent US accelerator Techstars, most had been featured at previous Beyond the Beach seminars; a resilience segment, ‘After the Storm, Built to Last’, which included Fund Manager Justine Powell of Sygnus; and a segment on using artificial intelligence (AI) as the Caribbean’s competitive advantage. The latter included Christopher Edmonds, a local music tech entrepreneur; Adrian Dunkley, CEO of Star Apple AI, who in a response to a question outlined a long list of the things required to make Jamaica more AI friendly; and Ricki Wax of Google Cloud AI, one of whose many missions is to educate people on using AI as a tool.

Finally, the social sector segment (which we will cover in more detail in future articles) was ably addressed by Michelle Chong, founder, Honey Bun Foundation, and Donte Hunt, an entrepreneur with a dual role as director of micro, small, and medium-sized business development at the innovative Bermuda Economic Development Corporation.

Chong described her current mission as “helping Jamaica make more money as a country”, and recommends aligning oneself with people who have the same vision. Putting this thought into action, she is working with EAB Executive Director Chris Cochran as part of a plan to create a coalition of foundations to better address Jamaica’s immense social needs post-Hurricane Melissa.

This mission also aligns perfectly with that of the Pension Fund Association of Jamaica, which has invited Prime Minister Dr Andrew Holness to address its members at its annual luncheon at the Jamaica Pegasus next week Tuesday, where he is expected to expand on the role of our capital markets in economic development.

Keith Collister