DBJ narrowing selections for IGNITE incubator
Development Bank of Jamaica (DBJ) has earmarked $75 million in grant funding for its incubator programme called Innovation Grant from New Ideas to Entrepreneurship (IGNITE), which targets inventors and innovators.
DBJ Managing Director Milverton Reynolds told the Financial Gleaner that the state agency carved out the niche financing programme based on lessons learnt from dealing with the inventors of a sorrel-harvesting machine, Turner Innovators, whose equipment is set to revolutionise the reaping of the crop.
With the help of the DBJ and First Angels Jamaica, a network of mainly Jamaican companies and individuals who are willing to finance promising start-up companies and projects, Turner Innovations was able to begin the commercialisation of its invention. First Angels is paying for a consultant design engineer to work with Turner.
Meantime, IGNITE has been created by DBJ to position promising inventions for commercialisation.
"We are targeting innovators, not just entrepreneurs who want to start a business, because innovators have a little harder time getting financing elsewhere," said Reynolds.
"The banks probably won't understand the project. So, they might not want to take the risk and they won't get any help from the angle backers until they have developed something that they can present," he said.
IGNITE was launched last November and is set to run for two years. The programme is supported by partners Branson Centre, Jamaica Manufacturers' Association and the Jamaica Business Development Corporation (JBDC), which will selects and trains the innovators on how to set up and operate a business.
"We are budgeting to do about 30 of these companies every year, where businesses like the Turners' would apply. The organisations will shortlist the applicants, then present to us a list of companies that would qualify for assistance," said the DBJ head.
To date, the DBJ has received 40 applications from which it plans to pull at least 15 for financing.
"We are still in the process of narrowing down this group. We are trying to get 15 out of this group, and then there is second stream of 30 that should come in April. We will bring that down to 15 as well," said manager of capacity building at the DBJ, Joan Lawrence.
"We will provide financing for those that meet the criteria for preselection by the accelerator or incubator," she added.
IGNITE is being financed from DBJ's internal resources, but if the two-year programme is successful, "we will go to our parent ministry and convince them that is something that is worth supporting (and) seek additional funding," Reynolds said.
Entrepreneurs can access up to $4 million under the programme.
"But not everyone will get $4 million. There is a tiered system. Some will get $4 million, some will get $2.5 and some will get $1 million," Lawrence said.
Entrepreneurs may spend the funds on registering intellectual property, acquiring accounting systems, and doing their business plans, but they cannot use it to offset salaries.