Christine Rowlandson and Nicoela McCoy are part of the Angel Investor Network, which will invest in new entrepreneurs and small businesses.

Some of the members of the Angel Investor Network, which will mentor and invest in entrepreneurs: (back) Winston Connolly, Tom McCallum, Phillip Ebanks and William Peguero. (front) Investment Bureau Managing Director, Dax Basdeo, Nicoela McCoy, Christine Rowlandson, Frank Balderamos and Eddie Thompson.

Tom McCallum explains the Angel Investor Network as Dax Basdeo, Executive Director of the Investment Bureau, Nicoela McCoy and Winston Connolly look on.

Eleven proposals for capital investments from entrepreneurs are under review by the newly launched Angel Investor Network. The 13-member group, comprising individuals and corporate members, are studying the plans placed before them by small businesses.

Behind each proposal is an entrepreneur, who is hoping his or her project will be chosen to make a presentation to the Angel Network. If the entrepreneur is successful, it could mean he or she will get the start-up capital needed, a wealth of guidance and introductions to clients and key contacts.

It could mean the difference of being successful and not starting at all according to the Chairman of the Angel Investor Network, William Peguero. “There is a vast amount of legal, financial, accounting marketing and technical experience within our group,” he said.

“All of us are successful in our businesses and have a willingness to give back and we could do that through the Angel Network. We believe that can help small businesses, especially the young entrepreneurs, to avoid the common pitfalls.”

Of proposals being reviewed, two are small businesses looking to grow, McCoy’s Restaurant and Lounge and a legal training institute. The remaining proposals are water distribution, magazine publishing and car care products. It is expected that numerous other proposals will be submitted as the profile of the small businesses are raised through the Angel Investor Network.

There is an estimated $500,000 available in venture capital through the Cayman Angel Investor Network, which officially launched its programme on 22 March. The Angel Investor Network is modelled after similar groups in the US, which provide entrepreneurs and small businesses with mentoring, capital financing and professional advice.

The Executive Director of the Cayman Islands Investment Bureau (CIIB), Dax Basdeo, said the programme also offers the potential for a return on their investment, but there is no set rate. “Investors know that this is an equity investment and so it is a different mindset than getting a loan from a bank where you have to start paying it back next month,” said Mr Basdeo.

“They know the business may not have any return for five years. That is the flexibility you have with an angel investment network that you don’t have in a commercial bank.” About 80 percent of local businesses have 25 or fewer employees and 60 percent which have 10 or fewer employees. Therefore, entrepreneurship makes up a fundamental part of the economy.

Organisations such as the Angel Investor Network can help foster an environment of entrepreneurship that is catalyst for innovative products and services. Traditional avenues to raise needed capital for new start-ups are family, friends and personal savings.

Often banks are reluctant to provide a loan to a business just starting out. The Angel Investor Network provides a practical alternative for capital investment to give a business a good start, which have been successful in numerous countries including the US and Canada.

According to Mr Peguero, applications being considered range from $25,000 to $100,000 for capital injections, but larger projects will also be considered. Furthermore, the Angel Investor Network is open to all nationalities. If a Caymanian partner is needed that will also be assisted with by the organisation.

Another member of the Angel Network, Tom McCallum, said there is no guarantee of an investment. The decision of how much capital as well as the involvement in each business will be made by each investor. The Angel Investor Network is composed of leading businessmen and women some of whom have already been involved in similar angel investor groups in other countries.

It is expected to expand to 25 members and membership is extended by invitation, but it was stated that it is an inclusive group. The Cayman Islands Investment Bureau helps entrepreneurs and small businesses to prepare their proposals and presentations to the Angel Network. There are no fees charged to make a presentation.

The group has made confidentiality agreements regarding the business plans of the entrepreneurs. If an investor has a business similar to a proposal, the individual would be excused to avoid any conflict of interest. This procedure will maintain confidence and integrity with entrepreneurs who are submitting proposals.

shurna@caymannetnews.com