By : CARIBBEAN BUSINESS ONLINE STAFF cbnewsroom@gmail.com; cbprdigital@gmail.com
Samuel J. Boyd Jr., chief investment officer and director of program development of the Office of Investment and Innovation at the Small Business Administration (SBA), visited Puerto Rico this past weekend to take part in a series of events hosted by Grupo Guayacán Inc. (GGI) as part of the organization’s continued efforts to promote a strong risk-capital ecosystem on the island.
Boyd leads the team that manages the assessment of applicants to the SBA’s Small Business Investment Company (SBIC) program. SBIC’s are privately owned and managed investment funds licensed and regulated by the SBA. The funds use capital raised from private investors combined with capital from SBA-guaranteed debentures to make equity and debt investments in qualifying small businesses. For every dollar that an SBIC raises from investors, SBA provides two dollars of capital through guaranteed debentures, subject to a cap of $150 million. Boyd serves on the SBIC Investment and Divisional Licensing Committees and also leads all the SBIC program’s outreach efforts, particularly as it pertains to engaging institutional investors and underrepresented investment funds.
“We are honored by Sam’s visit and excited to continue collaborating with the SBA’s Office of Investment and Innovation. These efforts are of strategic importance for GGI’s work in support of a vibrant private equity market in Puerto Rico. Our ultimate goal is to contribute to the development of a robust risk capital ecosystem that provides a variety of alternatives for local entrepreneurs to access the capital they need to start their businesses or to grow. We believe that leveraging the SBIC program is key to building this landscape,” said Laura Cantero, GGI’s executive director.
Boyd was the special guest at the 2015 Guayacán Venture Accelerator (GVA) Demo Day, where companies graduating from GGI’s accelerator program had the opportunity to pitch their businesses in front of a panel of local and international investors. At this year’s Demo Day more than 10 local companies had the opportunity to gather feedback on their business models and growth plans, and establish relationships with potential investors while, at the same time, showcasing top entrepreneurial talent.
In attendance at Demo Day were representatives from Banco Popular, First Bank, Santander, the Economic Development Bank for Puerto Rico, Advent Morro Equity Partners, and a host of other private equity investors. Notably, the panel also included representation from a series of newcomers to the local private equity market, including: Parliament Capital, Caribbean Basin Equity Partners, Bluhaus Capital and McLarty Capital Partners. Investors from the U.S., Canada and Panama also attended.
The GVA program is a GGI initiative designed to propel the growth of existing companies by combining an education curriculum with feedback and mentoring from professionals, academics and seasoned investors.
As a prelude to the GVA Demo Day, GGI hosted an exclusive networking event, “Tools for High-Impact Investing in Puerto Rico,” where Boyd was the keynote speaker. His presentation included an in-depth view of the SBIC program as well as updates on newer initiatives, such as the Impact Investing program, targeted at economically distressed areas such as Puerto Rico. During his remarks, Boyd stressed that the SBA is enthusiastic about the prospect of investing in private equity funds that target Puerto Rico. The event also featured a presentation of Puerto Rico’s new Private Equity Funds Act by Iván Marrero and Edgar Ríos from Pietrantoni, Méndez & Álvarez (PMA).
In attendance at Friday’s event was a group of senior stakeholders from the local and international financing and entrepreneurial ecosystems, including representation from institutional investors, banks, private equity firms, and angel investors, as well as a select group of GGI alumni companies.
During his stay, Boyd also held private meetings with senior leaders from the island’s top financial institutions, where he discussed the critical role banks can play in fostering access to capital for small businesses by leveraging federal programs, such as the SBIC. Banks can play an important role, as investors or general partners for bank-owned SBIC funds. The SBIC program affords investor banks a number of benefits, including exemption from the Volcker Rule, which limits banks’ ability to invest in private equity funds, and eligibility for Community Reinvestment Act (CRA) credits.
Boyd’s visit and the related activities mark an important milestone for GGI and the GVA program. For the first time since its creation in 2010 – and to serve growing demand – GGI will offer a second session of the GVA in the fall. This year, GGI also launched the first edition of its GVA Alumni program serving the community of GVA graduates which now consists of 54 local growth companies.
“This is the largest and most diverse GVA Demo Day that GGI has hosted. We are convinced that there is great value in helping intermediate relationships between serious investors and top entrepreneurial talent.
“Increasingly, we are turning our attention towards stimulating the local private equity market by leveraging our relationships with institutional investors, fund managers and other key stakeholders, such as the SBA, both in Puerto Rico and abroad,” Cantero said.
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