LINK-Caribbean was founded to help early-stage Caribbean entrepreneurs raise capital from private investors, particularly business angel investors through the support of the Regional Angel Investor Network (RAIN). The program also disburses investment facilitation grants, such as co-investment grants and investment readiness grants, to qualified applicants.
An initiative of the World Bank Group and infoDev, sponsored by the government of Canada, LINK-Caribbean is an investment facilitation project under the auspices of the Entrepreneurship Program for Innovation in the Caribbean (EPIC) and implemented by the Caribbean Export Development Agency (Caribbean Export).
The Investment Readiness Grant
The Caribbean Export Development Agency (Caribbean Export) hosted two webinars for entrepreneurs who were interested in applying for an investment readiness grant. The program issued its first call for investment readiness grant applications in September 2016 and plans to accept applications several times a year.
Kevin Jones, Advisor for Access to Finance at Caribbean Export and Project Coordinator for LINK-Caribbean, and Damien Sorhaindo, Advisor for Competitiveness and Export Promotion at Caribbean Export, led more than 100 entrepreneurs through the application process.
Who Can Apply for an Investment Readiness Grant?
Investment readiness grants are meant for start-up and early-stage enterprises that demonstrate business and investment promise, but are not quite ready to be considered by large investors, Jones said.
“These grants aim to get companies ready for angel investment or other relevant sources within a short time frame – usually within 3-6 months – by providing funding for specified purposes that improve the prospects for investment,” Jones said. “Under this initiative, a successful company can benefit from an investment readiness grant up to US$25,000.”
How Can I Prepare for the Investment Readiness Grant Application?
Here are a few tips for crafting a successful investment readiness grant application:
1. Familiarize yourself with the LINK-Caribbean platform and grant terms and conditions.
2. Review the eligibility criteria.
Review the eligibility criteria to ensure you are qualified for the grant.
Your company must be a start-up or early-stage enterprise that is legally registered or operating in a CARIFORUM country (with the exception of Haiti and the Dominican Republic) and actively seeking angel or other private investment.
Companies involved in activities that are deemed to be non-environmentally friendly are not eligible for investment readiness grants. This includes tobacco production, mining activities, and adult entertainment, such as gambling. Additionally, property developers and charitable organizations are not eligible for the grant.
3. Determine how your grant money will be spent.
“How you intend to use the grant will be very important,” Jones said. “Show that you plan to use the grant for approved investment activities. These may include salaries and fees associated with the delivery or on-going execution of core business functions, sales and marketing activities such as trade fairs and trade shows, market research and testing, and product design and development.”
Entrepreneurs can also use the grant funding for equipment purchase, plant modernization, advisory and training services, quality and environmental systems improvements, information technology solutions (such as websites and multimedia platforms), developing and testing prototypes, and intellectual property rights acquisition costs, Jones said.
4. Complete and submit your application on the online platform.
Complete your application and submit it through the LINK-Caribbean Investment Readiness Grant online portal.
“There is no need to send individual emails,” Jones said. “Only one application will be accepted per company and applications must be in English. So if you are submitting your application from Suriname, for example, it is important that you arrange to have your application information translated from Dutch to English for your application to be screened or considered.”
Remember that incomplete applications will be rejected. Review the mock application to ensure that you fully understand what is required and how to properly complete the forms.
5. Provide all supporting documents.
Take careful note of all supporting documentation that must be submitted. These include business registration forms, articles of incorporation, financial statements and projections, as well as the required Social Screening and Environmental Screening forms.
Don’t forget to supply the resumes of your management team. Awards will be based on an approved project budget and an assessment of your managers’ ability to execute. (Note that all of your company’s information will be treated with the strictest of confidence.)
6. Design your pitch deck.
“This is a very important document that all investors want to see,” Jones said. “It gives an overview of your business plan and how the IR grant will be used to achieve important business milestones that will make it more investible. This is key!”
The review process usually takes approximately 12 weeks, during which shortlisted companies will be selected and invited to pitch.
7. Prepare to pitch.
Shortlisted applicants will undergo technical assessments and light due diligence. Prospective grant award recipients may be invited to attend a live pitching event to the grant selection committee.
Caribbean Export will cover the costs for entrepreneurs to attend the event. “Treat this process as an opportunity to rehearse for your live pitch with real angels … as angel investors will be a part of the review and selection committee,” Jones said.
However, as the investment readiness grant is a new program, the pitching event may not be a requirement for future application cycles.
8. Get ready for more targeted due diligence.
If your team performs successfully at the pitch event, you may be subject to further due diligence. Therefore, it is important that the information supplied in your application is consistent with the findings of the technical assessments and targeted due diligence.
9. Subscribe to grant agreement.
Once all requirements are met, Caribbean Export will notify you and make arrangements for your company to access grant funding. The size of the grant will depend on the stage of your company’s development, as well as the scale and type of proposed activities. (Funding is in USD.)
Careful consideration will be given to the size of the award so as not to crowd out future participation by other investors. You will be given up to six months to implement your proposed activities. You will also be expected to sign an agreement and adhere to grant monitoring and reporting requirements.
By taking time now to familiarize yourself with the grant’s requirements, your company will be in a competitive position for the next round of applications.
Opportunities for Other Caribbean-Based Entities
Although the co-investment and investment readiness grant programs are funded by EPIC, the Regional Angel Investor Network (RAIN) provides additional opportunities for entrepreneurs operating outside of LINK-Caribbean-approved territories to be exposed to investors signed onto the platform.
So what are you waiting for? Visit www.LINK-Caribbean.com and get a head start on your application.