START-UP COMPANIES are simply too high-risk for Government or commercial banks to invest in them.
This is according to co-founder of Automotive Art, Dereck Foster, who said Government did not have the expertise to identify which companies would be successful.
“That’s not a Government function.
I do not want the Government to take taxpayers’ money and play roulette with it,” he said at Frank Collymore Hall on Wednesday night after he delivered a public lecture on the invitation of the National Insurance Board.
“So many people in this country constantly go to our Government and ask them for things that are simply not their responsibility. I cannot support a strategy that says the Government needs to invest in start-up companies. The failure rate is way too high,” he said.
Similarly, Foster said banks were not structured to lend money to new ventures.
“They’re simply not going to do it and quite frankly . . . anybody having their money in a traditional bank should not expect a bank to do that,” he said.
Foster, however, conceded that starting a business was not easy and finding capital was very difficult, especially in markets that were “underdeveloped for finding capital”.
According to the executive, “[That] is one of the reasons Automotive Art started the entrepreneurial competition last year. It’s to try and bring entrepreneurs to the market and let’s see if we could find ways to get them capital in a non-traditional way by angel investors and other forms of investors.
“It’s in its infancy now but hopefully in the next ten years this will be the norm – that you go and pitch your idea to people who are willing to invest money in your business and help you grow the business.
“I’m very hopeful that this will help us a lot until we can develop a more structured market for helping entrepreneurs,” he said. (NB)
