Agreement to Finance Dominican Entrepreneurss Signed

(Santo Domingo, July 24, 2012). The Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank Group, CAF –Latin American development bank-, and the technology business incubator EMPRENDE, which is part of the Santo Domingo Cybernetic Park’s ecosystem, signed an agreement in the amount of US$1,200,000 to set up the first Seed Capital Fund for the support of entrepreneurs in the Dominican Republic.

The MIF and CAF have committed US$900,000, with an additional US$300,000 being contributed by EMPRENDE, Technology Business Incubator, thanks to a donation made by the Government of Taiwan to the Santo Domingo Cybernetic Park Foundation.

The fund will provide a co-financing mechanism that will permit entrepreneurs who raise funds from the private sector in the form of investment by at least two members of Enlaces, a network of angel investors in the Dominican Republic, to access up to US$150,000 in seed capital to support their business ventures.

There are plans to increase this Fund in the future with contributions from the Dominican Republic’s public and private sectors and other multilateral credit agencies with the purpose of providing entrepreneurs who have projects in the early stage of development with the necessary access to capital that is indispensable for the success of their ventures.

The setting up of seed capital funds makes an effective contribution to the development of a risk investment culture, which is essential for creating new companies as these funds support entrepreneurs and the investors who accompany them.

The initiative is accompanied by technical assistance resources granted to EMPRENDE by the MIF for incubating enterprises that can then be presented to members of Enlaces, a network of angel investors. Once capital has been allocated by the angel investors -individuals who invest funds to provide capital for enterprises that are in the early stage of development and, therefore, high risk-, the entrepreneurs can access the fund’s assessment instruments so that their ventures can be considered for funding.

The purpose of projects of this type is to foster an entrepreneurial culture and a culture of risk investment by promoting the creation of angel investor networks and improving the incubation system in order to back the creation of new companies that support the country’s economic development.

As a result of the technical assistance program that the MIF offers EMPRENDE, in 2008, Enlaces, a network of angel investors, was born. Enlaces already has 57 members who have invested in four enterprises to the tune of approximately US$400,000.00 in all; it has also set up Entrepreneurial and Innovation Centers at eight universities with the support of the Minister of Higher Education, Science and Technology under its National Entrepreneurship Program.

As for CAF, as part of its comprehensive agenda in favor of development, it is promoting the transformation of production in Latin America in order to generate greater added value by promoting innovation and entrepreneurship as a starting point for achieving that goal. With these activities, CAF seeks to promote an agenda that will strengthen entrepreneurial activity in each country by promoting interaction between public and private actors.

The MIF performs an integral role in the development of ecosystems that finance entrepreneurship and is an active investor in seed and venture capital funds in Latin America and the Caribbean. Together with CAF, it participates in several investment funds in Latin America by getting private sector organizations involved in setting up seed capital funds to strengthen ecosystems for the incubation and development of dynamic enterprises. Recent experiences include programs in Chile, Uruguay, and Argentina.

The signing ceremony, held at the National Palace, was attended by the President of the Republic, Dr. Leonel Fernández Reyna; Eddy Martínez, the chairman of the Board of Directors of EMPRENDE and director of the Center for Trade and Investment; Tomas Miller and Smeldy Ramirez, representatives of the Multilateral Investment Fund (MIF); and Mr. Rodolfo Clavier, the representative of CAF –Latin American development bank. Also in attendance were the Minister of Higher Education, Science and Technology, Ligia Amada Melo de Cardona, and Orlando Perez Richiez, the executive director of EMPRENDE, Technology Business Incubator and the director of the Ministry of Higher Education, Science and Technology’s National Entrepreneurship Program. Guillermo David Méndez attended on behalf of BHD International Bank-Panama, the trustee bank, accompanied by Luis Molina, the president of BHD Financial Center, and the chairman of Enlaces’ Board of Directors, Marcos Troncoso.