It takes money to create jobs
November 9-15 is recognised as Global Entrepreneurship Week. It's a time when the innovators and owners of start-up businesses are celebrated for their mighty hand in economic growth and job creation. Henry Lowe is one such entrepreneur.
Last Wednesday night, he was awarded the National Medal in Science and Technology. The prestigious accolade came with J$1.5 million in prize money. In his acceptance speech, Mr Lowe made reference to a conversation with a fellow nominee, and their unresolved plight to get their invention financed.
Mr Lowe could have done a lot with J$1.5M, but instead of using it to increase his own fortune, he did something for which he will forever have my respect. Henry Lowe not only donated the prize money, but matched it for the furtherance of science and technology entrepreneurship.
Lack of financing
More than one of those nominees tells the story of being turned down by both private and government entities they had approached for a loan to finance their business. Henry Lowe thought it crazy that their ideas/inventions/businesses are deemed good enough to be award-worthy but unworthy of financing? And I agree with him.
Only 11 months ago, I left my corporate job and the security of a monthly pay cheque to walk this crazy road as owner of a start-up. And I now know first-hand that the Jamaican entrepreneur's biggest challenge is financing.
No truer statement has been uttered than 'It takes money to make money'. I'll take it one step further: 'It takes money to create jobs'. The objective of the entrepreneur isn't self-employment. It's employment creation. Big difference. But the start-up businesses need seed money to grow.
I've heard so many financial institutions say, "We have your back. We'll give you as much money as you need ... as long as you can secure it." Secure it with what?
The reality is that the true entrepreneur who believes in his or her business has already poured everything into it. Anything they could have used as security has already been invested in the business. They have nothing to secure this commercial prenup with other than a great idea, a solid business plan, and an owner's drive.
I tell anybody who will listen how I got the money to start my business. I had a horrible car accident in January. Wrote off my car. And when the insurance cheque came through, because it was impossible to get a company to believe in a startup enough to invest in it, I put the insurance money in the business. I also spent my entire pension. No regrets. I had to fight off banks clamouring to give me a car loan, though.
If no one becomes an employer, no one becomes an employee. And until we get that, until banks and the Government take the risk and support these growth engines, great ideas and potentially successful businesses will perish before they even begin.
We live in a Jamaica where you can get a same-day loan to buy a carnival costume, yet, still, entrepreneurs are persona non grata. I know of three really good businesses now that need money to scale. They have confirmed orders in hand and their projected sales numbers in the case of one triple their current earnings. But they need money to fill those orders - money no one is willing to front.
That's a shame.
I watch 'Shark Tank' with longing every Friday night. I see venture capitalists (VCs) put up their own money (and expertise and connections) to support someone else's dream (and also to make a killing in the future). I appreciate the vision of the VCs there. My favourite part of the show are the updates that feature the mammoth success achieved by past businesses that have appeared in The Tank, dispelling the myth that investment in new businesses is a sunk cost. Hopefully, one day we will get there.
Happy Entrepreneurship Week to the magicians who every month make blood out of stone. I hope that one day you will get the financial backing you need and that your new miracle will be the feeding of the 5,000.