CAIN to help enable local businesses

Monday, March 27, 2006

Hopefully the future of the small to medium sized commercial sector in the Cayman Islands got a shot in the arm last week, with the launch of the Cayman Angel Investory Network, (CAIN).

With the help of a number of local well-experienced business people, new start ups will now have some twenty five angels to help advise and support them in their new business ventures, but more importantly another source of finance will now be available to new start-ups.

Finding the funds to back any new business idea is always difficult.

Retail banks the world over traditionally frown at high risk investment and as many a person who has tried to go it alone will testify, the regular high street bank considers almost anything high-risk. And even when they can be persuaded to part with the cash, they want a very fast return.

Even with Cayman’s offshore sector, local small businesses struggle to raise finance for projects here. The banks still want too many assets, guarantees or too fast a return for most people going into business for the first time.

Traditionally, therefore, many young people turn to friends or family for their start-up capital.

But for those who don’t have family money or know someone who has, their great business ideas have in the past had to fall by the wayside, or be shelved indefinitely. Now there is another realistic source for those would-be-entrepreneurs to turn.

The Angels’ capital, advice and support will be invaluable to the country’s future as a whole too.

Without a solid local economy, the Cayman Islands will have to depend more and more on the twin arms of the tourism and financial sectors here for our future.

With increasing competition in both industries as well as continuing diversification, we cannot rely on the wealth generated by those sectors to necessarily be there forever. And certainly we cannot expect the wealth of the last three decades to sustain the same level indefinitely.

It is essential therefore that this country continues to nurture a strong domestic and diverse economy and the development of entrepreneurs will certainly make a positive contribution to local commerce.

It is a shame that in the past Cayman’s own local retail banking sector has not always offered enough support to young entrepreneurs or those in start-up situations.

Even the cleverest, most ingenious and potentially lucrative business ideas need support in the early days and there will be many diverse businesses that will be helped by this new group of angels.

Primarily made up of experienced local businessmen and women, with collectively immense local commercial experience, they will be able to give Cayman’s newer members of the business community the benefit of that experience –good and bad. This may mean not just how to do things but ‘how not to’.

The funds however are not bottomless and it would be extremely encouraging to see more money coming from the banking sector to help.

Whether it is from the leading names in the commercial banking sector or from those in the offshore sector, it is no secret the size of the figures that pass through financial institutions here every day and if the banking community as a whole was to step forward they could double the Angel Investor fund currently available, without even noticing.

Just a ‘tenth’ of a percentage of the transactions which pass through the Cayman Islands daily, would make all the difference in the world to several new start-ups but would make virtually none, to the wealth generated for others here everyday.

The future of the Cayman Islands will always depend of tourism and finance to be as wealthy as it is currently.

However, as time goes by we will need the support of an even stronger local economy to sustain our standard of living and to do that we need to invest in our business future.

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