Document of The World Bank FOR OFFICIAL USE ONLY Report No: ICR00004864 IMPLEMENTATION COMPLETION AND RESULTS REPORT ON A SMALL GRANT IN THE AMOUNT OF USD 1.6 MILLION TO THE Caribbean Export Development Agency FOR Caribbean Investment Facilitation Project (P157484) June 20, 2018 Finance, Competitiveness And Innovation Global Practice Latin America And Caribbean Region Regional Vice President: Axel van Trotsenburg Country Director: Tahseen Sayed Khan Senior Global Practice Director: Alfonso Garcia Mora Practice Manager: Zafer Mustafaoglu Task Team Leader(s): Aun Ali Rahman ICR Main Contributor: Aun Ali Rahman ABBREVIATIONS AND ACRONYMS A2F Access to Finance AA Alpha Angels CAD Canadian Dollar CARICOM Caribbean Community and Common Market CBAN Caribbean Business Angels Network CBESP Caribbean Business Enablers Support Project CCIC Caribbean Climate Innovation Center CEDA Caribbean Export Development Agency CI Co-Investment Grant CIFP Caribbean Investment Facilitation Program CMIP Caribbean Mobile Innovation Project EDF European Development Fund EPIC Entrepreneurship Program for Innovation in the Caribbean FAJ First Angels Jamaica FFF Family, Friend and Founder HNWI High Net Worth Individual IDB Inter-American Development Bank IR Investment Readiness Grant MVP Minimum Viable Product OECS Organization of Eastern Caribbean States PE Private Equity SME Small and Medium Enterprise USD United States Dollar VC Venture Capital TABLE OF CONTENTS DATA SHEET ....................................................................... ERROR! BOOKMARK NOT DEFINED. I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES ....................................................... 4 II. OUTCOME .................................................................................................................... 10 III. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME ................................ 15 IV. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME .. 16 V. LESSONS LEARNED AND RECOMMENDATIONS .............................................................. 17 ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS ........................................................... 21 ANNEX 2. PROJECT COST BY COMPONENT ........................................................................... 28 ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS ...... 29 ANNEX 4. SUPPORTING DOCUMENTS (IF ANY) ..................................................................... 30 The World Bank Caribbean Investment Facilitation Project (P157484) DATA SHEET BASIC INFORMATION Product Information Project ID Project Name P157484 Caribbean Investment Facilitation Project Country Financing Instrument Caribbean Investment Project Financing Original EA Category Revised EA Category Partial Assessment (B) Partial Assessment (B) Organizations Borrower Implementing Agency Caribbean Export Development Agency Caribbean Export Development Agency Project Development Objective (PDO) Original PDO 14. The project development objective is to pilot and test an investment facilitation model to enable promising early-stage enterprises to raise capital from private investors, particularly business angel investors. This will be achieved by the provision of investment facilitation grants and support activities to facilitate investments. Page 1 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) FINANCING FINANCE_TBL Original Amount (US$) Revised Amount (US$) Actual Disbursed (US$) Donor Financing TF-A2555 1,600,000 1,600,000 1,600,000 Total 1,600,000 1,600,000 1,600,000 Total Project Cost 1,600,000 1,600,000 1,600,000 KEY DATES Approval Effectiveness Original Closing Actual Closing 18-Apr-2016 12-May-2016 30-Nov-2017 30-Nov-2018 RESTRUCTURING AND/OR ADDITIONAL FINANCING Date(s) Amount Disbursed (US$M) Key Revisions 30-Nov-2017 0.98 Change in Loan Closing Date(s) Change in Procurement Change in Implementation Schedule KEY RATINGS Outcome Bank Performance M&E Quality Satisfactory Satisfactory Substantial RATINGS OF PROJECT PERFORMANCE IN ISRs Actual No. Date ISR Archived DO Rating IP Rating Disbursements (US$M) 01 10-Jul-2017 Moderately Satisfactory Moderately Satisfactory 0.84 02 29-Jan-2018 Moderately Satisfactory Moderately Satisfactory 1.26 Page 2 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) ADM STAFF Role At Approval At ICR Regional Vice President: Jorge Familiar Calderon Axel van Trotsenburg Country Director: Sophie Sirtaine Tahseen Sayed Khan Director: Robert R. Taliercio Practice Manager: Ganesh Rasagam Zafer Mustafaoglu Task Team Leader(s): Aun Ali Rahman Aun Ali Rahman ICR Contributing Author: Aun Ali Rahman Page 3 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) I. PROJECT CONTEXT AND DEVELOPMENT OBJECTIVES A. Context Regional Context 1. The Caribbean region has been trapped for years in a spiral of slow growth, high unemployment, limited fiscal space, and growing social problems, exacerbated by a number of external shocks since 2008.1 Underlying the growth gaps are low levels of productivity and competitiveness in the region.2 According to the World Economic Forum’s Global Competitiveness Report, Caribbean regional productivity continues to be low and trails other emerging economies, which is mainly attributable to weak public institutions and a weaker private sector.3 The World Bank’s Enterprise Surveys concluded that the region’s private sector is dominated by smaller, older, and less open firms that are predominately locally owned and that operate in small and medium-size localities.4 Building the growth engines of the region depends on its capacity to boost a dynamic and innovative private sector. 2. These economies have concentrated, undiversified industrial sectors and lack economies of scale. As a result, public sector consumption and investment play an important role in driving economic growth, but they also tend to lead to public sector debt. The debt to GDP ratio averages 85%5, and increases risk and macroeconomic instability. Tourism, on average accounts for 20% of GDP in some countries and 34% of regional employment, is being eroded by rising social problems such as crime, as well as the frequency of natural disasters that plague the region. The global recession brought rising unemployment and a marked decrease in remittances and tourism, on which the region is heavily dependent. Private sector investments and external capital flows have also decreased against these macroeconomic headwinds. Expected effects of the confluence of these forces are a rise in unemployment, a greater degree of inequality, and an increase in crime. 3. Innovative entrepreneurs are drivers that spur growth and competitiveness by creating jobs and delivering new products, services, and business models to underserved markets.6 In the Caribbean context, enterprises have shown a significant innovation disadvantage and growth plight. In Jamaica, for instance, the lack of competitiveness is linked to weaknesses in the investment climate that enhance the cost of doing business, the limited adoption of new technologies, low levels of workforce training, and the limited availability of specialized professional manpower. 7 The same is true for most of the region as well. Compounding the limited startup numbers is the small pool of growth- oriented enterprises in the region. 1 World Bank, 2014 Regional Partnership Strategy for the Organization of Eastern Caribbean States (OECS) for the Period FY15 – 19 (working version) (Washington, DC: World Bank, 2014). 2 Inder Ruprah, Karl Melgarejo, and Ricardo Sierra, Is there a Caribbean Sclerosis? Stagnating Economic Growth in the Caribbean (Washington, DC: Inter-American Development Bank, 2014). 3 World Economic Forum, The Global Competitiveness Report 2014–2015 (Geneva: World Economic Forum, 2014). 4 World Bank, Enterprise Surveys (Washington, DC: World Bank, 2008). 5 IMF, 2008. 6 Daniel Lederman, Julián Messina, Samuel Pienknagura, and Jamele Rigolini, Latin American Entrepreneurs: Many Firms but Little Innovation (Washington, DC: World Bank, 2014). 7 World Economic Forum, Global Competitiveness Report. Page 4 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) EPIC Program Context 4. The Entrepreneurship Program for Innovation in the Caribbean (EPIC) was developed to support the development of an enabling ecosystem to foster innovative, high-growth and sustainable enterprises in the Caribbean region. EPIC is a recently concluded 7-year, CAD 20 million trust funded program funded by the Government of Canada through the World Bank Group, operating in CARICOM countries8 with the exception of Haiti. 5. The EPIC program centered its efforts on three programmatic components: • Component I focused on delivering three new thematic incubation services on a region-wide basis to Caribbean start-ups and early-stage enterprises, with a focus on mobile technology, climate technology and women’s entrepreneurship. These programs include the Caribbean Climate Innovation Center (CCIC), the Caribbean Mobile Innovation Project (CMIP), and Women Innovators Network Caribbean (WINC). • Component II targeted strengthening the capacity of existing business enablers – through an initiative called AccelerateCaribbean - to become more effective in developing business support services. These capacity building efforts include in-depth training and mentoring to enabler managers and teams to improve their performance/effectiveness as organizations. • Component III focused on access to finance for promising Caribbean start-ups and growth-oriented entrepreneurs, with a focus on unlocking private capital, particularly from business angels and other early-stage financiers. This was addressed through two interdependent projects: a) a recipient-executed investment- facilitation project (Caribbean Investment Facilitation Project [CIFP] which is the subject of this ICR) which facilitates investments into promising entrepreneurs from business angels and other early-stage investors through investment facilitation grants and related activities; and b) a bank-executed Access to Finance Skills Building project which focused on training and technical assistance to new angel groups in the Caribbean, and on training entrepreneurs on effective capital raising from investors. Access to Finance 6. Among the multitude of barriers to growing businesses, access to finance has been a principal challenge faced by Caribbean enterprises. Data from a 2014 firm-level survey by Compete Caribbean showed that difficulty in obtaining financing was a leading impediment to doing business, with 30% of firms in the region mentioning it as a moderate obstacle and 26% citing it as a major or severe obstacle.9 Few financing options have generally been available for start-ups and early-stage enterprises in the Caribbean. Commercial banking loans have been difficult to secure due to the cash flow and collateral requirements of banks. Moreover, the informal nature of many Caribbean companies has made connecting capital supply and demand very difficult for commercial banks. 7. Venture capital and private equity activity, particularly with respect to early-stage companies, has also been very limited. There are few private equity funds in the region, and those present tend to focus mainly on later-stage investments in select sectors such as energy and financial services and are primarily consolidated in Jamaica and Trinidad and Tobago. Venture capital is virtually non-existent across the region, primarily due to the lack of high 8 These countries include 11 island states (Antigua and Barbuda, Bahamas, Barbados, Dominica, Grenada, Jamaica, Montserrat, Saint Kitts & Nevis, Saint Lucia, Saint Vincent & the Grenadines, Trinidad & Tobago) and 3 continental countries (Belize, Guyana, and Suriname). Haiti is the only CARICOM country that does not fall within this program. 9 Compete Caribbean, http://competecaribbean.org/category/micro-level-data/ Page 5 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) growth-potential businesses that can offer venture investors an opportunity for risk-adjusted returns, and non- conducive business and regulatory environments for venture capital funds. 8. In light of these constraints, business angel investing was seen as having the potential to emerge as an effective and relevant form of capital for start-up and early-stage Caribbean firms, and one which could play a foundational role in the Caribbean entrepreneurial financing ecosystem. Angel investing typically involves high-net-worth individuals (successful entrepreneurs, industrialists, corporate/business executives, and investors) investing their own capital and time in start-up and early-stage businesses, with a goal to both make a financial return and contribute to the develop of entrepreneurial communities. Globally – both in developed countries as well as increasingly in developing countries – angel investing is often a favorable form of capital for seed and early-stage enterprises, as angels generally understand the inherent risks associated with early-stage ventures and have a higher risk tolerance. In addition, angel investors can add a suite of non-financial support to entrepreneur-led enterprises. While conducting due diligence on investment opportunities, angels also tend to assess the value which their own skills, knowledge and networks can add to a company. As enterprises grow, angels guide and mentor the entrepreneurs, continue to assess and reassess the company’s value proposition and financing needs, and oftentimes invest in follow -on financing rounds. Because of the ongoing entrepreneur engagement and commitment to long-term gains, angel investing is commonly referred to as “mentor� or “patient� capital. Angel investors thus act as unique contributors to the entrepreneur business support network. Moreover, angels often act as the first round of outside finance for entrepreneurs, introducing rigor to the due diligence and investment processes. For successful companies that hope to access subsequent investment (venture capital, e.g.), angel investors can provide an important layer in the financing continuum. 9. Organized angel investing – where high-net-worth individuals (HNWIs) join angel groups or networks to invest together in early-stage firms – was at a nascent stage in the Caribbean before the development of the CIFP. In 2014, as EPIC’s Access to Finance activities were getting off the ground, there was indicative interest among high net-worth individuals (HNWIs) in Jamaica and Barbados to set-up local angel groups. The bank-executed EPIC Access to Finance Skills Building Project leveraged this emerging interest to support the development of the region’s first three pilot angel groups (First Angels Jamaica and Alpha Angels in Jamaica and Trident Angels in Barbados). While these pilot angel groups had laid the preliminary foundation for seed and early-stage investments in the region, there was a strong need to address coordination failures in the entrepreneurial financing ecosystem. The challenges included a general risk adverse culture, mistrust between entrepreneurs and investors due to potential IP issues and other socio-economic factors. Compounding the cultural background are equity aversion, lack of investment readiness, and poor investor engagement skills among Caribbean entrepreneurs. From the capital supply side, investors rightly perceived early-stage companies and/or SMEs as a very risky asset class, and lacked a systematic mechanism to source the most promising early-stage investment opportunities. 10. To address these market failures, an investment facilitation model was needed to help bridge the information and capacity gaps on both the supply and demand sides. Moreover, it was envisioned that facilitating the first batch of angel investments would provide a demonstration effect that will help grow interest and trust in the entrepreneurial financing ecosystem. It was also envisioned that over time successful investment facilitation would have a spillover effect in the regional entrepreneurship and innovation ecosystem, and influence the governments and other stakeholders to develop more enabling environments for early-stage finance. Page 6 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Relevance to Country/Regional Partnership Strategy 11. The CIFP – as part of the larger EPIC program – was also developed to contribute to the World Bank Group regional strategies aimed at enhancing productivity, competitiveness, and employment of Caribbean countries. The World Bank 2015-2019 Regional Partnership Strategy (RPS) for the Organization of Eastern Caribbean States (OECS) and the 2014-2017 Jamaica Country Partnership Strategy highlighted competitiveness and private sector development as concerted thematic areas for World Bank engagement including: strengthening regional supply chains, fostering competitive sectors, and addressing the need for infrastructure and SME investment in the Caribbean. The CIFP complemented these initiatives by addressing the gaps in the early-stage financing space that potentially contribute to supplying upstream investment opportunities for larger-scale projects while fostering new competitive sectors. B. Project Development Objectives (PDOs) 12. The project development objective (PDO) was to pilot an investment facilitation model that enabled early-stage Caribbean enterprises to raise capital from private investors, particularly business angel investors. This would be achieved by the i) provision of investment facilitation grants and ii) support activities to facilitate investments, including the development of organized angel investing in the Caribbean. 13. Through its implementation, the pilot project aimed to build a demonstration effect around angel investing and other relevant forms of early-stage financing for high-potential Caribbean enterprises. 14. The PDO was not revised. C. Key Expected Outcomes and Outcome Indicators 15. The key expected outcomes were to enable Caribbean start-ups to raise capital from early-stage investors and to support the development of organized angel investing in the Caribbean. 16. Key outcome indicators for the project were measured as: • Number of CIFP supported enterprises that receive private investment; • Total capital mobilized from private investors into CIFP supported enterprises; • Number of private investors who participate in the project. 17. Non-quantifiable outcomes for the Project included the development and continuity of local angel groups at the country level and the development and launch of an umbrella regional angel investors network. D. Components 18. The Project consisted of two components involving: i) the provision of investment facilitation grants to entrepreneurs, ii) non-funding activities to a) stimulate angel investing, and b) support the development of deal-flow for early-stage investment. Because many features of the CIFP were novel for the Caribbean, the Project took an iterative approach to test/pilot what worked and make appropriate pivots as it is further developed. Component 1 – Pilot Investment Facilitation Grants - $1.0 Million Page 7 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) 19. The project piloted new grant instruments - investment facilitation grants - to start-ups and early-stage enterprises in the Caribbean to stimulate private investment into these companies, from angel investors or other relevant financing sources. The core success indicator of the grants would be whether they mobilized private investment, while also providing funding that enables the enterprise to develop and grow its business. The beneficiary entrepreneurs were enterprises throughout CARICOM countries, except Haiti. 20. The CIFP develop and tested two types of facilitation grants: • Co-investment Grants: Co-investment grants were designed to provide supplementary funding to enterprises that were able to raise investment from business angels and other approved investors. The purpose of these grants was to provide additional funding beyond what investors were willing or able to make. In order to ensure appropriate “skin in the game� from both the entrepreneurs and investors, qualifying enterprises would however need to secure at least 2/3 (67%) of the capital from investors, with the CIFP contributing up to 1/3 (33%) of the funding up to a maximum grant of USD 100,000 per enterprise. The CIFP co-investment grant disbursement would be made after the enterprise had received the capital investment from the investor. • Investment Readiness Grants: Investment readiness grants were designed to involve small grant funding (up to USD 25,000) to start-up and early-stage enterprises that showed strong business and investment promise but still not considered “investment ready� by investors. The purpose of these grants was to prepare companies for angel or other investment within a short time frame (e.g. 3-6 months) by providing “investment readiness� funding for specified purposes that improve their prospects for investment. Component 2 - Support Activities to Facilitate Investments - $0.6 Million 21. In addition to the provision of investment facilitation grants, the CIFP also engaged in non-financial facilitation activities on both the demand and supply sides of access to finance to increase the prospects of investments in Caribbean start-ups. These activities principally consisted of the following: • Angel Network Development: On the supply-side, the CIFP supported the development of new angel groups/networks in the Caribbean as well as to identify individual angels who would be willing to invest in Caribbean start-ups. Key activities included: i) conducting angel investing educational events for business leaders and other key stakeholders, ii) identifying and cultivating potential angel investing “champions� who could serve as anchors for developing new angel groups, iii) providing administrative support (where needed) to new angel groups. Additionally, the CIFP also aimed to pilot a regional pan-Caribbean angel network to bring together existing and new angel groups, individual angels and other early-stage investors under one umbrella both from a standpoint knowledge/experience sharing, networking and potential investment syndication for start-up/early-stage deals. As part of this effort, the CIFP planned to organize regional angel forums and master classes to strengthen the new Caribbean angel community. • Investor Engagement Assistance for Entrepreneurs: On the demand side, the CIFP would support investment deal flow by i) conducting capital raising trainings for entrepreneurs and ii) sharing the most promising deals as potential investment opportunities with investors participating in the CIFP. For the former activity, the Page 8 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) CIFP organized and coordinated angel investing sensitization seminars, an online investor engagement training program, and investment engagement mentoring. Theory of Change Contribute towards a more developed entrepreneurial and early-stage finance eco-system and Impact dynamic and competitive private sector creating sustainable jobs (longer term) Caribbean start-ups / early- Caribbean Business Angel Outcomes stage firms raise capital from Angel investors/groups Network (CBAN) expands investors invest on a continuous basis and sustains its activities Intermediate Caribbean start-ups/early- Investors screen and Caribbean Business New angel stage firms receive evaluate investment Angel Network launched Outcomes investment facilitation grants opportunities groups formed Caribbean start-ups/early- Entrepreneurs Prospective Existing angel Deals are shared ‘champions’ sensitized Outputs stage firms receive trained on engaging groups successfully with investors investors to angel investing engaged investment facilitation grants Launch and rollout of Deals sourced for Source and training Engage existing angel groups and Activities Investment Facilitation sharing with entrepreneurs seeking cultivate prospective angel champions Grants investors to raise capital for new group creation. E. Significant Changes Made 22. As a response to the request from the Recipient, the project underwent Level 2 restructuring in November 2017, close to the original closing date. The closing date was extended by 12 months from November 30, 2017 to November 30, 2018. The extension was to allow sufficient time for the Recipient to complete the planned activities, utilize the project funding and achieve the targeted outcomes under the results framework. 23. No other changes were made of the project. Page 9 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) F. OUTCOME A. Summary and Overview 24. The project was designed as a pilot to test out an investment facilitation model that enabled Caribbean start-ups and early-stage enterprises to raise capital from private investors, and to create a demonstration effect around angel investing as a form of financing for high potential Caribbean entrepreneurs. Given the relatively short duration of the project (2.5 years from effectiveness to final closing date) and the nascent stage of start-up/early-stage finance in the Caribbean, outcomes/results would be seen through i) investments facilitated in Caribbean early-stage enterprises and ii) the development of organized angel investing in the Caribbean as a viable form of start-up/early-stage finance. 25. The project was able to exceed or achieve key PDO level and intermediate outcomes as summarized in the table below. Outcome Outcome Indicator Project Results at %Target Level Targets Completion Achieved PDO Level Number of CIFP supported enterprises that receive private investment 10 16 160% PDO Level Total capital mobilized from private investors into CIFP supported $1.0 million $2.72 million 272% enterprises PDO Level Number of investors participating in the CIFP 60 70 117% Intermediate Number of enterprises receiving investment facilitation grants 20 19 95% Intermediate % of women led enterprises receiving investment facilitation grants 20% 21% 105% Intermediate Total amount of grant funding to enterprises $1 million $1 million 100% 26. Additionally, project significantly contributed to the development of organized angel investing in the Caribbean through the development of new angel groups, the development of the regional Caribbean Business Angel Network (CBAN) and greater awareness and interest among business leaders in the Caribbean to engage in angel investing. 27. An independent end of project evaluation of the EPIC program conducted by Deloitte and Touche also evaluated the CIFP as one of the projects within EPIC and noted that the project was highly relevant for both entrepreneurs and business angels and was the main contributor to some of key ultimate outcomes of EPIC. B. Assessment of Achievement of Each Objective/Outcome (i) Piloting an investment facilitation model 28. The CIFP aimed to build a demonstration effect that business angel investors and other forms of early stage capital could be mobilized to finance early stage enterprises through investment facilitation grants to entrepreneurs as well as non-funding activities supporting the development of deal-flow for early-stage investment along with matchmaking. The outcome indicators for this activity included a) the number of CIFP-supported enterprises that received private investment, b) total capital mobilized by private investors into CIFP-supported enterprises and c) the number of investors participating in the CIFP. Private Capital Mobilization – Investment Results Page 10 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) 29. The CIFP surpassed project targets with regards to stimulating private investment in early stage enterprises. In total, 16 companies received private investment from investors affiliated with the CIFP against a project target of 10 companies (160%) totaling USD 2.72 million (see Annex 5 for list of companies receiving investment). Thus, including the grants, 24 companies raised a total of just over $3.72 million and a 2.72x leverage on grant funding. 30. Without previous organized angel investing activity in the Caribbean and no/limited baseline data on private investing in startups in the region, the project provided unique data and insights into the practices, preferences and investing styles of new angel (and “angel-like�) investors and the role that angel investors could play within the entrepreneurial finance ecosystem in the Caribbean. Private financing provided by investors principally took the form of equity: with 14 companies received equity investments while two companies received loans. Capital invested ranged from $25,000 to $622,000 while the majority of investments fell into the $100,000 - $200,000 range. The average investment per company was $175,000. 31. The 16 investments included participation by at least 35 individual investors, most of whom were affiliated with the angel investor groups supported by the CIFP. 11 of the investments were made by the angel groups, 4 investments were made by individual angel investors (including two in the UK and one in Canada), along with 1 investment by a small Jamaica based local venture capital fund that launched in 2018. 32. While the EPIC program had an orientation towards innovative companies in digital technology and clean tech, the CIFP kept a fairly agnostic approach with regards to the types of companies supported. The CIFP prioritized mobilizing new angel investors by encouraging investors to explore their personal interests, motivations and knowledge bases and building diverse deal flow. Highlighting, for example, technology companies exclusively could have deterred some individuals with limited technology backgrounds from becoming angel investors, while at the same time giving a false impression to companies as to what new local angels were willing to invest in. Ultimately, 8 of the sixteen companies receiving investment were tech/tech-enabled businesses (50%), while the remaining 8 were in traditional businesses, largely consumer products. 33. The CIFP results have not shown Caribbean angel investors to be uniquely risk averse or conservative with regards to angel investing, and in this sense the project has created a positive demonstration effect. Approximately 300 companies were “screened� by investors in the Caribbean, and 75 were matched to investors (meaning they presented at an in-person at private investor meetings), ultimately resulting in 16 investments. Based on this funnel, the deals closed / opportunities screened rate is fairly high at 5% - in developed angel and venture capital markets the ratio is often 100-to-1. Investment Facilitation Grants Results 34. The CIFP piloted investment facilitation grants to start-ups and early-stage enterprises in the Caribbean with the aim to stimulate private investment into these companies, from angel investors or other relevant financing sources. The project largely effectively disbursed the grant funding using 2 instruments: investment readiness grants and co- investment grants. Page 11 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Number of Total Amount of Companies Grant Funding Investment 14 $350,000 Readiness Grants (IR) Co-Investment 10* $650,000 Grants (CI) Total Recipients 19 $1,000,000 *5 CI recipients had previously received IR grants. Because the grant served different purposes and were applied at different stages of the firm’s business development needs, start-up/early-stage firms could be eligible for both grants. However, the maximum grant funding through CIFP per firm was $100,000. This meant that if a firm received an IR grant of $25,000, it could only be eligible for a CI grant of $75,000. 35. Investment Readiness grants (IR) were intended to bridge companies to private investment and the key success measure was whether a grant recipient “converted� to an investment. In total, 14 companies received grants of $25,000 each, of which 5 have gone on to raise capital from private investors, for a 36% conversion rate (internal project target was 33%) by end of project. While the grant design envisioned a 3-6 months bridge period to investment, the average time to secure investment was somewhat longer at 9 months, with the shortest being 2 months and the longest 18 months. 36. Co-investment grants (CI) were designed to incentivize private investors to invest in start-ups / early-stage firms by providing matching funding of up to 50% (up to $100,000) of the private capital that could help de-risk the investment by providing supplemental funding beyond what the investors were willing to commit. Also, accessing co-investment funds could encourage investors to reserve funds for other investments (portfolio building) or funding follow-on rounds without undercapitalizing the company at the initial investment. The grant targeted private investors, principally angel investors (individuals, syndicates of individuals or groups) as well as early stage institutional investors, including venture capital and SME funds. During the project, 10 companies leveraged co-investment grants to secure private investment. The average CI grant was $65,000, while the average private capital committed to the investments was $209,000 (leverage ratio of over 3:1). (ii) Supporting the Development of Organized Angel Investing 37. The CIFP approach to supporting the development of structured angel investing groups in the Caribbean focused on three areas, including general promotion and awareness raising through regional forums, cultivating champions and early adopters in new markets, and supporting the establishment of the pan-regional Caribbean Business Angels Network (CBAN). 38. During its early implementation, the CIFP engaged with the 3 pilot angel groups in the Caribbean – First Angels Jamaica and Alpha Angels in Jamaica and Trident Angels in Barbados – to participate in different activities associated with the project’s goals and activities. Additionally, the CIFP team also conducted awareness building and event cultivated prospective angel investing ‘champions’ in other CARICOM countries, including Bahamas, Belize, Guyana, the OECS countries, Suriname, and Trinidad & Tobago. Through these efforts, 2 local angel groups in Trinidad & Tobago were formed which received continued administrative and investment facilitation support from the CIFP. By the end of Page 12 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) project, a new angel group was under development in the Bahamas, and 6 HNWIs in the OECS were partnering with First Angels Jamaica (FAJ) set up an FAJ OECS chapter. 39. The regional Caribbean Angel Investor forums proved valuable in attracting attention to angel investing and also in germinating relationships between investors across the islands. The first Forum in Montego Bay, Jamaica in May 2017 attracted approximately 40 attendees, largely from Jamaica and Trinidad, and focused on technical trainings led by international angel investing instructors, as well as networking opportunities among investors. The second Forum, in November 2018 in Port of Spain, Trinidad, included approximately 90 attendees from 10 Caribbean islands with representatives from angel groups in Jamaica, Trinidad, Barbados and the Dominican Republic. Significantly, the Forum program centered on regional actors, with panel participants and presentations largely by local leaders, and included topics relevant to Caribbean angel investing, such as exit strategies and building deal flow. 40. The Caribbean Business Angels Network (CBAN) was launched by the CIFP in 2018, with Caribbean Export as the Secretariat and also coordinating technical support from international angel investing experts. CBAN’s Steering Committee comprises local angel investors and group leaders from Jamaica, Trinidad & Tobago, Barbados and the Bahamas, as well as the Dominican Republic and Haiti. The network offers a valuable potential platform for strengthening the regional angel investing community. CBAN aims to: 1) Build awareness around business angel investing in the Caribbean; 2) Support new business angel groups and other stakeholders committed to building the ecosystem; 3) Tackle issues of quality deal flow in the Caribbean, in part by developing a deal sharing and co-investment mechanism to support deal syndication; and 4) Connect regional investors with global counterparts. 41. Although the CIFP has ended, Caribbean Export intends to continue supporting the further development of CBAN in its Secretariat role through 2022. For this, it has secured funding from the EU (CEDA’s principal donor) through the 11th European Development Fund (EDF) Regional Private Sector Development Programme. CEDA will also continue administrative and deal support to angel investors in Trinidad & Tobago and OECA C. Relevance 42. The independent evaluation conducted by Deloitte and Touche indicated that the project was highly relevant for both entrepreneurs and angel investors. • Entrepreneurs – “The A2F component was highly relevant to the needs of growth-oriented entrepreneurs by providing them with access to finance to prepare them to secure investment. The investment readiness grants disbursed by CEDA were particularly relevant in meeting this need, and according to a CEDA representative, the delivery of grants was adapted based on country nuances.� • Angel Investors - “The A2F design met the needs of angel investors by structuring angel investment groups through targeted support offered on a demand-driven basis.10 The program was also relevant to investors as it brought them under a broader platform in the region, the Caribbean Business Angel Network (CBAN), which did not previously exist in the Caribbean. While CEDA was not previously engaged in the angel investing 10 World Bank Group (2018). EPIC FY18 Progress Report. Accessed on January 4, 2019. Page 13 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) ecosystem, implementing partners noted the Agency had a strong interest in private investment and sustainability, indicating that they were a suitable implementing partner to deliver the component. One angel investor noted that without the support from the WBG and CEDA’s support in structuring the network, investors would still be supporting entrepreneurs on an ad hoc basis. Therefore, these efforts have encouraged more investments by providing a mechanism to channel funds and making investing in startups easier for those interested.� D. Overall Outcome Rating 43. The overall outcome rating is Satisfactory.11 The project successfully met or exceeded PDO level and intermediate outcomes (including investment facilitated in Caribbean start-ups/early-stage enterprises, and the successful deployment of the pilot investment facilitation grants which contributed to the PDO level outcomes of investment facilitated/catalyzed). Furthermore, the project expanded the awareness and understanding of angel investing among business leaders across the region, leading to the launch of 2 new angel groups in Trinidad and Tobago, and prospective new angel groups in Bahamas and the OECS. The project also launched the Caribbean Business Angel Network (CBAN) to enable the on-going development of angel investing and start-up finance in the region. Finally, the project contributed to greater knowledge and awareness of angel investing and early-stage finance among entrepreneurs, entrepreneurship support organizations and development agencies within the wider region. E. Other Outcomes and Impacts Gender 44. Although the project didn’t specifically target a gender orientation in its results framework, the level of gender related outcomes were encouraging. 30% of the start-ups and early-stage firms received investment were led/co-led by female entrepreneurs. The most active angel investors group – First Angels Jamaica – was led by a female manager and 30% of its members were women. 45. The project introduced new practices and knowledge that could contribute to long-term positive impacts on the entrepreneurial finance market, even though they have been created during an initial period of relatively low level of investments. For instance, entrepreneurs and entrepreneurial ecosystem actors in the Caribbean generally had a low level of awareness about early stage risk capital, including angel, VC and traditional forms. The CIFP, with demand and supply side activities, provided general education and performed a coordinating and infrastructural function, such as introducing common, recognized practices for due diligence, drafting sample investment documents and legal agreements, implementing codes of conduct and critically addressing trust issues by providing success stories of entrepreneur/investor partnerships where there was previously no history of structured angel investing. 46. At project outset, there were few early stage investors considering startup or seed stage funding in private companies and the CIFP may have partially played a role in highlighting on approaches to structured practices for investing in startups. Particularly in Jamaica, the entrepreneurial finance ecosystem advanced during CIFP implementation with 11The project rating in the last ISR conducted in January 2018 was ‘Moderately Satisfactory’. Significant achievement of key results – both at the PDO and intermediate outcomes levels – in the final year of implementation increased the final project rating to ‘Satisfactory’. Page 14 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) indigenous investors – beyond angel investors – getting involved, such as SSL Ventures, a micro VC launched with $1M in capital, which invested in an Investment Readiness Grant recipient. A number of corporate members have also joined First Angels Jamaica (FAJ), with one investment bank co-investing alongside FAJ members in an investment in late 2018. While still limited, the convergence of macro factors (a robust public stock market with an emerging junior market that serves as a potential liquidity avenue for investors in small companies and the lowering of government borrowing rates) and continuing enthusiasm for entrepreneurship proved timely for an investment facilitation program. G. KEY FACTORS THAT AFFECTED IMPLEMENTATION AND OUTCOME A. Summary of Preparation 47. The project benefitted from the following factors during the preparation stage: 48. Through the complementary bank-executed EPIC Access to Finance Skills Building Project, the region’s first 3 pilot angel groups were already launched. - two in Jamaica (First Angels Jamaica and Alpha Angels) and one in Barbados (Trident Angels) – while the CIFP was being prepared. These angel groups – with ongoing technical assistance delivered by World Bank specialists – had been familiarized with angel investment and had begun to review and make investments, thereby giving CIFP a bit of a head-start as it began its launch and roll-out. 49. The project implementing agency CEDA had a capable management and implementation team and was strategically interested in developing angel investing in the Caribbean (including in the smaller CARICOM nations) and working towards building a pan-Caribbean angel network. CEDA had strong grant administration processes and has built a track record in running SME grants programs that it was able to leverage for the investment facilitation grants under the CIFP. The agency also has strong fiduciary systems – including financial management and procurement – given experience working with multilateral and bilateral donors that will allow it to effectively manage a World Bank grant. 50. During preparation, the World Bank team worked closely with the CIFP implementation team at CEDA to engage relevant stakeholders on the finer details of the project, overall pre-launch outreach. The Bank team also provided in-depth training on project design and implementation to the CEDA team through 3 training missions over a 6 months period to enable an effective launch and roll-out. B. Summary of Implementation Factors Having a Positive Impact 51. Continuous access to the World Bank team for advisory to the implementing agency and technical assistance/coaching to angel investors proved important in developing skills and knowledge in partners and Page 15 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) beneficiaries through implementation while maintaining project momentum during long investment cycles. 52. In line with the project design, project components were closely monitored and pivoted incrementally to enhance project reach and operational effectiveness. A couple of examples include a) the transition from a cyclical to rolling application and selection process for Investment Readiness grants to better respond to entrepreneur and investor activities and ii) the development of a pitch competition (“5-5-5 project�12) to source companies and identify potential angel investors in the OECS. 53. The project extension allowed the disbursement of grants to better match the pace of deal flow sourcing and investment processes of local investors, which could take 6-12 months. In addition, the extension enabled the continuation and expansion of awareness raising and promotional activities to a broader geographical scope as well as the hosting of the successful Second Caribbean Angel Investors Forum. Factors Having a Negative Impact 54. Investment readiness of entrepreneurs remained a challenge throughout the project and adequate support was difficult to secure. This is in part due to the nascent stage of development of the entrepreneurial community in the region, particularly first-generation technology-focused entrepreneurs with limited product development and business-building experience. Further, the implementing agency was unable to develop effective programming such as mentoring or training to address the significant gap. Additionally, in some of the smaller islands, few angel investors were engaged in an active way in the project (until the later stages), which limited valuable pre-investment feedback or mentoring from investors. 55. The geographical disconnectedness and small markets without a critical mass of deal flow and investors in many CARICOM countries made project implementation and geographical inclusion challenging. Particularly, deal flow outside of Jamaica and Trinidad & Tobago was constrained by structural factors such as insufficient enabling environments and low technical skill levels and experience of entrepreneurs as well as entrepreneurial support organizations resulting in few viable investment opportunities. Further, investors valuing customer traction and sufficient addressable commercial markets found scaling potential across the region and to larger export markets a significant obstacle to startups on small islands. On the supply side, small island populations lacked sufficient investor prospects to form standalone angel networks or groups, though the project did attempt to develop CBAN as an eventual platform for integrating individuals into an investment community. H. BANK PERFORMANCE, COMPLIANCE ISSUES, AND RISK TO DEVELOPMENT OUTCOME A. Bank Performance 56. The World Bank’s performance is rated Satisfactory. During preparation, the Bank brought in angel investing practitioners and experts to provide in-depth training to the CEDA team on the design and implementation of the project. In parallel, Bank consultants provided awareness sessions and on-going and in-depth and 12Under the “5-5-5� pitch competition, 5 entrepreneurs were competitively selected to pitch to 5 prospective local angels for a small prize of $5,000. The purpose was mainly to create awareness and interest among both entrepreneurs and HNWIs on angel investing. Page 16 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) training to the region’s first 3 angel groups prior to CIFP launch. Furthermore, during the design phase, the Bank team closely engaged with multiple stakeholders across the region to make sure t hat the project’s design was contextually relevant to the region’s needs, the larger objectives of EPIC and the regional partnership strategy. Bank engagement on project preparation involved an appropriate balance between global best-practice and developing project features relevant to the regional and local context. 57. During implementation, quality of supervision was far more intense than a regular World Bank project and very meticulous given the pilot nature of the project. Seven supervision missions were carried out over the course of the 2.5 years. These included four implementation support missions in the first year of implementation during which the Bank’s technical experts provided guidance and feedback on implementation). This support was widely appreciated and deemed essential by the implementing agency CEDA. TA/support slowed down in the last year of implementation owing to improved capability within CEDA although the project was closely supervised from a technical and fiduciary perspective. B. Compliance 58. Financial Management - Throughout implementation, the Caribbean Export Development Agency (CEDA) staffed by experienced professionals, maintained an adequate financial management system deemed acceptable to the Bank. While CEDA consistently provided reliable financial information on implementation, the timely submission of financial reports was not consistent. However, during the final year of the project the timely submission of financial reports improved. The final audit report was delivered in a timely manner, in which the External Auditor issued unmodified (clean) opinions on the financial statements. Overall, no significant deficiencies were noted in CEDA’s internal control, and as such, the project maintained a FM implementation and status results (ISR) rating of Satisfactory. 59. Safeguards - The project triggered only one Safeguards Policy, OP4.01 (Environmental Assessment), and an Environmental and Social Management Framework (ESMF) was developed to address the identified safeguard risks. Training on the ESMF was provided to the Client at the beginning of the project. The Client screened Grant applications using formats in the ESMF, and provided quarterly reports with safeguards information. In general there were no environmental issues identified and none of the applicants were rejected on issues related to health and safety. This was verified by periodic review of screening forms and site visits to the grant recipients. The nature of the project presented only indirect environmental risks which were conservatively assessed as “Moderate�. In summary the safeguards compliance can be considered Satisfactory and there were no unexpected safeguards policy issues under this project 60. Procurement - A simplified procurement plan was developed which included procurement of 3 individual consultants as part of the CIFP implementation team, and procurement of goods and non-consulting services for workshops and training events. CEDA followed the World Bank's procurement guidelines and no major issues were encountered. I. LESSONS LEARNED AND RECOMMENDATIONS Page 17 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) 61. As a pilot project, the CIFP developed valuable learnings that can inform the design and implementation of similar start-up and early-stage finance projects in countries with similar entrepreneurial eco-system characteristics 62. While investment facilitation can help jump-start alternative financing for startups such as angel investing, developing structured angel investor groups and a broader dynamic community of early stage investors is a long-term undertaking. The process may be 10+ years in the making, particularly for projects seeking to mobilize private capital sources into investments in new startup asset classes.13 In the Caribbean, there was no precedent for organized angel investing while inexperienced angel investors are exploring investing in high- risk startups for the first time, in many cases in tech/tech-enabled businesses in which there is little local experience and investors and entrepreneurs have limited technical backgrounds. There must be significant expectation management for development finance institutions, governments and private sector stakeholders regarding the time needed to develop angel investing groups and the pace and volume by which companies are likely to secure third party equity investment. 63. Implementing partners should have long-term strategic alignment. As noted above, developing early stage capital markets is a long-term undertaking and identifying partners with shared objectives and a foundation in the local markets is critical. CEDA was already exploring the expansion of its SME funding program prior to the CIFP, which included the Direct Assistance Grant Scheme (DAGS), a reimbursable grants program funded by the European Commission. A survey conducted by CEDA in December 2014 revealed that 56% of firms were interested in equity investment. Post-CIFP, Caribbean Export received funding allocation under the 11th European Development Fund (EDF) Regional Private Sector Development Program to support project costs and to provide a budget to continue as CBAN secretariat into 2020. 64. Institutional capacity building prior to and ongoing during the engagement is critical for implementing agencies new to the field of early stage finance, particularly equity investing and supply-side development. While CEDA had deep experience in grants administration and strong leadership, early stage private investing, particularly equity investing, was new to the agency. Developing angel investing and the broader early stage investment community is relationship-based and education and capacity building must be ongoing to ensure teams are equipped to address topics associated with investor and angel group maturation and post- investment issues. 65. In early stage ecosystems where little baseline activity exists, investors must be incentivized to participate. Cultivating HNWIs to invest personal funds and time into a high-risk asset class (emerging companies) in new sectors or in companies with untested business models, such as tech-enabled businesses, should include appropriate support and incentivization. Programs aiming to support organized angel investing should take an approach that includes training and technical support for the establishment of angel networks/groups that create deal sourcing and evaluation efficiencies while building skills for investors, as well as financial support such as operational or performance-based funding to subsidize initial network/group activities. Incentives to help de-risk investments such as co-grant funding or first-loss facilities should also be utilized to lower capital risk exposure. If possible, engagement with the public sector to promote tax incentives and co-investment funds that help augment angel investor capital should also be considered. 66. Distinctions should be drawn between start-up business support grants and investor ready grants. Providing 13 Perhaps we could use a reference to Scotland here, or refer the reader to the annex. Page 18 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) proof of concept, “runway� grant funding or other general pre-investment support are valid interventions for stimulating startup activity. However, for investment readiness projects with the goal to catalyze private investment in the near-term, projects must identify and focus on the core metrics that investors value, particularly customer traction. For investor ready (or pre-investment) grant programs, clear engagement with investors should be a pre-requisite, and preferably the entrepreneur should co-apply with an investor who has identified the problems that would need to be fixed or opportunities captured before they would consider investing. The budget for the grant should be matched to these areas and should not become a general business survival budget, which mistakes an investment ready program for a general early stage support grant program 67. The growth of CBAN and an extended Caribbean angel association should remain a priority, with the objectives to develop, support and represent the angel investing community. CBAN should continue to host the annual angel investors forum which in addition to providing a platform for education and awareness building serves as a conduit for increasing important connections between the Caribbean and wider international angel investing community, including diaspora. 68. Investment Readiness – or pre-investment grants - should continue to be provided as a mechanism for supporting deal flow development, but with higher investor involvement. In markets such as the Caribbean where entrepreneurs and business support organizations have limited experience raising capital and working with investors, the identification of issues preventing an investment closing are best identified by potential investors. Providing grants only to those companies that have had meaningful engagement with potential investors will encourage companies to seek out and engage with investors, while also helping to address equity aversion issues. 69. Co-investment Grants should continue to be part of an ongoing program as an incentive – and de-risking instrument – for investors. The qualification of investors and disbursement processes should be adjusted to reflect the level of development of angel investing activity, at the national or group level. Where there exists active angel groups/network, with a proven history of investing and an established investment process, the approval process should be streamlined by a “delegated� process whereby the facility “pre -approves� the investor and accelerates the review and disbursement. 70. Ongoing education targeting policymakers, entrepreneurs and enablers regarding angel investing should be backed by data collected through research efforts. Information provision is critical to ensuring that entrepreneurial support interventions and policies are appropriately structured. Specifically, it is important to identify and educate stakeholders on the stage at which angels typically invest, the anticipated capital availability and investment levels and common instruments and structures being used. For instance, angel investors typically do not fund companies that are at the idea stage, which is often a misconception 71. Future programs should recognize, as many governments in developed countries have, the need to incentivize individuals to become business angels. Even in developed countries there are significant disincentives for individuals to become business angels, including the time it takes to become involved in the process, the need to learn new skills and the high risks associated with early stage investing. To encourage individuals to engage, many governments offer incentives to stimulate angel investing through a variety of schemes ranging from direct support to cover for the operational costs of angel groups to co-investment funds with varying levels of preferred return to the private sector, and personal taxation concessions. Future programs should include Page 19 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) elements to mimic these interventions. 72. A feasibility study should be undertaken to determine the prospects and potential modalities for a co- investment fund. Ongoing development of potential co-investors (angels and early stage VC funds) and credible deal flow is likely needed to provide sufficient critical mass for a standalone delegated equity co-fund to be effective. However, consideration could be given to operating a small co-investment fund in Jamaica and/or an SME or non-equity fund. . Page 20 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) ANNEX 1. RESULTS FRAMEWORK AND KEY OUTPUTS A. RESULTS INDICATORS A.1 PDO Indicators Objective/Outcome: Pilot an investment facilitation model that enables early-stage Caribbean enterprises to raise capital from private investors, particularly business angel investors Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of CIFP supported Number 0.00 10.00 10.00 16.00 enterprises that receive private investment 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): The project enabled investments in 16 Caribbean start-ups and early-stage firms (160% of project target). - Of the 16 start-ups, 12 (75%) received investments from Caribbean based angel groups supported by the CIFP, whereas 3 received investment from individual angels in Jamaica, UK, and Canada respectively, and 1 received investment from a Jamaican early-stage institutional investor. - 50% of the start-ups had women founders or co-founders - 50% of the start-ups were in tech / tech enabled businesses, whereas the remaining 50% were in consumer products or food/beverages. - 11 start-ups were based from Jamaica whereas the remaining 5 were from Barbados, Grenada and Trinidad & Tobago. - 14 start-ups received equity investments whereas 2 received investor loans. Page 21 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Total capital mobilized from Amount(USD) 0.00 1000000.00 1000000.00 2723580.00 private investors into CIFP supported enterprises 29-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): The project enabled mobilization of over USD 2.7 million in Caribbean start-ups (270% of project target). Investments ranged from USD 25K to USD 622K, with an average investment of USD 170K per start-up. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of investors Number 0.00 60.00 60.00 70.00 participating in CIFP 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): A.2 Intermediate Results Indicators Component: Component 1 - Investment Facilitation Grants Page 22 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of enterprises Number 0.00 20.00 20.00 19.00 receiving Investment Facilitation Grants 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): A total of 19 start-ups received Investment Facilitation Grants to enable them to raise capital from business angels and other early-stage investors. A total of 24 grants were disbursed of which 10 were co-investment (CI) grants whereas 14 were investment readiness (IR) grants. Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion % of women led enterprises Percentage 0.00 20.00 20.00 21.00 receiving Investment Facilitation Grants 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): 4 out of 19 start-up enterprises received Investment Facilitation Grants Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Total amount of Investment Amount(USD) 0.00 1000000.00 1000000.00 1000000.00 Page 23 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Facilitation grant funding to 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 enterprises Comments (achievements against targets): Of the USD 1 million in grant funding, $650,000 was for CI grants whereas $350,000 was for IR grants Component: Component 2 - Support Activities to Facilitate Investments Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of enterprises linked Number 0.00 60.00 60.00 60.00 to investors 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): Unit of Formally Revised Actual Achieved at Indicator Name Baseline Original Target Measure Target Completion Number of enterprises Number 0.00 150.00 150.00 250.00 receiving Investor Engagement Training 30-Apr-2016 30-Nov-2017 30-Nov-2018 30-Nov-2018 Comments (achievements against targets): Page 24 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Page 25 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) A. ORGANIZATION OF THE ASSESSMENT OF THE PDO Objective/Outcome 1: Pilot an investment facilitation model that enables early-stage Caribbean enterprises to raise capital from private investors 1. Number of CIFP supported enterprises that raise capital from Outcome Indicators private investors 2. Total capital (USD) mobilized into CIFP supported enterprises 1. Number of enterprises which received investment facilitation grants Intermediate Results Indicators 2.Total investment facilitation grant funding 3. Number of deal shared with investors 1. Number of entrepreneurs trained on investment readiness and raising capital 2. Number of entrepreneurs mentored through the investment Key Outputs by Component readiness and investor engagement process (linked to the achievement of the Objective/Outcome 1) 3. Investment readiness and investor engagement workshops and sensitization events for entrepreneurial support organizations and other key stakeholders Objective/Outcome 2: Support the development of angel investing in the Caribbean 1. Number of participating angel investors in the CIFP Outcome Indicators 2. Number of active angel groups 3. Continuity of Caribbean Business Angel Investors Network 1. Launch of Caribbean Business Angel Investors Network Intermediate Results Indicators 2. Number of new angel groups launched Key Outputs by Component 1. Angel investors training and mentored on angel investing practices Page 26 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) (linked to the achievement of the Objective/Outcome 2) 2. Angel group managers mentioned/coached on building and managing angel groups Page 27 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) . ANNEX 2. PROJECT COST BY COMPONENT Note to Task Teams: The data in this section has been pre-populated for the first time for your convenience, but it is completely editable. Please delete this note when finalizing the document. Amount at Approval Actual at Project Percentage of Approval Components (US$M) Closing (US$M) (US$M) Investment Facilitation 1.00 1.00 100% Grants Support Activities to Facilitate Investments and 0.60 0.60 100% Project Administration Total 1.60 1.60 100% Page 28 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) ANNEX 3. RECIPIENT, CO-FINANCIER AND OTHER PARTNER/STAKEHOLDER COMMENTS The following comments were received by the Project Manager of CIFP at the Caribbean Export Development Agency. “The Caribbean Investment Facilitation Program (CIFP) was a tremendous success, not just for Caribbean Export, but especially so for the early-stage ecosystem in CARICOM. Not only did the program deliver on the goals it sat out to achieve, it went beyond that. The CIFP demonstrated the role private investment can play in the economic development of the region, and most importantly it started a conversation by creating an awareness of the potential of Angel investing. It is our hope that this “noise� will lead to further discussions at the policy level about incentivizing not just Angel investing but other forms of private investment structures. Caribbean Export intends on building on the great work started under the CIFP by supporting the continued development of the Caribbean Business Angel Network (CBAN). Work has already started on expanding the Network beyond the CARICOM region with interest being expressed by investors from countries such as Curaçao, Martinique, Guadeloupe and the British Virgin Islands. We recognize that there is a lot more work to be done, especially in the area of deal flow generation. If it’s one thing this program demonstrated it’s that there’s no shortage of capital in the region, but rather a shortage of investment ready projects. Finally, Caribbean Export wishes to express our gratitude to the World Bank team. From the very first day until the end, this project was about teamwork. We recognized that this program was a first of its kind in the region and it was important that we worked closely together, to pivot and make changes as we learn. The program especially benefited from the wealth of expertise that was made available to the Caribbean Export team. Individuals who were practitioners, but that brought their passion and knowledge to what we were trying to achieve.� Page 29 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) ANNEX 4. Additional Information A. Supporting Materials Catalyzing Start-up Finance and Angel Investing in Frontier Markets - Lessons from the Caribbean Angel Investing Project Final Evaluation Report. Deloitte. 2019. "World Bank Group – End-of-Program Evaluation of the Entrepreneurship Program for Innovation in the Caribbean" Page 30 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) B. List of Start-up /Early-Stage Companies Receiving Investment Amount of Private Industry/ Company Name Country Description Capital Raised Investor Sector (USD) 1. Provides marketing intelligence and advertising tools focused on new broadcast Blue Dot Data Advertising/ Jamaica mediums providing brands with a $400,000 SSL Ventures Intelligence Marketing Data measurable and targeted advertising solution 2. A mobile transportation Solutions that provides real-time information on the Caribbean SaaS/ Barbados status and timing of Public Service Vehicles $100,000 Trident Angels Transit Solutions Transportation (PSVs) and fleet management tracking for trucking companies 3. Sweetie Food/ Maker of hard candies with Caribbean- First Angels Jamaica Jamaica $76,000 Confectionary Confectionary inspired flavors 4. Consumer Provides a natural shampoo to address First Angels Jamaica HERBOO Jamaica $138,400 Products scalp conditions 5. Food/ Rocksteady ethically farms, manufacture Private Investor Rocksteady Jamaica Beverages and distribute a single origin, gourmet $50,000 (Canada) 100% Jamaica Blue Mountain Coffee 6. Loan management software for private First Angels Jamaica lenders and microfinance organizations. Loan Cirrus Jamaica SaaS/FinTech $180,000 Company has customers throughout the Caribbean and internationally 7. Crafton Holdings Food/ Manufactures, packages and supplies Private Investor Jamaica $630,000 Limited Agro-processing liquid eggs for hospitality industry (Jamaica) 8. Trinidad & Agro-processing/ Produces fine Trinidadian chocolate for the Private Investor T&T Fine Cocoa $200,000 Tobago Confectionary retail and hotel/restaurant market (UK) 9. Produces juices, nectars, herbal waters and Private Investor Food/ Grenada fresh coconut water from locally-grown $150,000 (UK) Beverages Summer Limited fruits in Grenada An eBook platform providing digital First Angels Jamaica 10. Jamaica SaaS/e-Books publishing and textbook solutions for $181,803 Bookfusion individuals and schools 11. Real estate listing site and marketplace for First Angels Jamaica SiFi Studios Jamaica Real Estate Tech property owners/managers and rental/buy $255,000 side 12. Provides public WiFi solutions for First Angels Jamaica Quickanet Jamaica WiFi Services $36,947 businesses 13. Coldbush Chocolate farm Produces high quality chocolate grown on First Angels Jamaica Jamaica $189,000 Organics and chocolatiers a managed farm 14. Trinidad & Manufactures and distributes vegan $25,000 IP Angels Trini Weenie Food Tobago sausages (est. loan) 15. Consumer IP Angels Trinidad & Sells eco-friendly, biodegradable bags and $25,000 Eco Bags Products/ Tobago packaging (est. loan) Packaging Page 31 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) C. List of Start-up/Early-Stage firms Receiving Investment Facilitation Grants INVESTMENT READINESS GRANT RECIPIENTS Industry/ Grant Amount Company Name Country Description Sector (USD) Provides marketing intelligence and advertising tools Blue Dot Data Advertising/ 1. Jamaica focused on new broadcast mediums providing brands with a $25,000 Intelligence Marketing Data measurable and targeted advertising solution SaaS/Health Developed scheduling and appointment management tools 2. Care Point Barbados $25,000 Technology for health care clinics A mobile transportation Solutions that provides real-time Caribbean Transit SaaS/ information on the status and timing of Public Service 3. Barbados $25,000 Solutions Transportation Vehicles (PSVs) and fleet management tracking for trucking companies Innovative Menu Food Delivery Food delivery application connecting local restaurants with 4. Jamaica $25,000 Solutions App consumers Food/ 5. Sweetie Confectionary Jamaica Maker of hard candies with Caribbean-inspired flavors $25,000 Confectionary Platform under development to provide compliance Trinidad & SaaS/ 6. System IZ checklists and safeguards to improve safety at industrial $25,000 Tobago Compliance sites Trinidad & SaaS/ Platform to facilitate communication between stroke 7. Communicare $25,000 Tobago Healthcare patients and caregivers Safety & Security Platform seeking to improve the communication and 8. First Responders Jamaica $25,000 Application coordination of dispatch services Consumer 9. HERBOO Jamaica Provides a natural shampoo to address scalp conditions $25,000 Products Trinidad & Music Sharing Music discovery and listening platform focused on 10. Radial $25,000 Tobago Platform Caribbean musicians Trinidad & Travel 11. Wanderscape Travel app connecting travelers to local experiences $25,000 Tobago Food/ Rocksteady ethically farms, manufacture and distribute a 12. Rocksteady Jamaica $25,000 Beverages single origin, gourmet 100% Jamaica Blue Mountain Coffee Trinidad & Platform to facilitate deal discovery and selling of consumer 13. Vinelist e-Commerce $25,000 Tobago and electronics products Trinidad & SaaS/ Small Software application to help businesses schedule 14. SKED $25,000 Tobago business tools appointments and communicate with clients CO-INVESTMENT GRANT RECIPIENTS (*Denotes also received an IR Grant) Industry/ Amount of Private Grant Amount Company Name Country Sector Description Capital Raised (USD) (USD) Loan management software for private lenders and microfinance organizations. 1. Loan Cirrus Jamaica SaaS/FinTech $90,000 $180,000 Company has customers throughout the Caribbean and internationally Crafton Holdings Food/ Manufactures, packages and supplies liquid 2. Jamaica $100,000 $630,000 Limited Agro-processing eggs for hospitality industry Page 32 of 33 The World Bank Caribbean Investment Facilitation Project (P157484) Sweetie Jamaica Food/ Maker of hard candies with Caribbean- 3. Confectionery* $38,000 $76,000 Confectionary inspired flavors Trinidad & Agro-processing/ Produces fine Trinidadian chocolate for the 4. T&T Fine Cocoa $100,000 $200,000 Tobago Confectionary retail and hotel/restaurant market Produces juices, nectars, herbal waters and Food/ 5. Grenada fresh coconut water from locally-grown fruits $75,000 $150,000 Beverages Summer Limited in Grenada An eBook platform providing digital 6. Jamaica SaaS/e-Books publishing and textbook solutions for $90,900 $181,803 Bookfusion individuals and schools A mobile transportation Solutions that provides real-time information on the status Caribbean Transit SaaS/ 7. Barbados and timing of Public Service Vehicles (PSVs) $50,000 $100,000 Solutions* Transportation and fleet management tracking for trucking companies Rocksteady ethically farms, manufacture and Rocksteady Mountain Food/ 8. Jamaica distribute a single origin, gourmet 100% $25,000 $50,000 Resort* Beverages Jamaica Blue Mountain Coffee Consumer Provides a natural shampoo to address scalp 9. HERBOO* Jamaica Products/ $35,000 $138,400 conditions Shampoo Provides marketing intelligence and Blue Dot Data Advertising/ advertising tools focused on new broadcast 10. Jamaica $46,099 $400,000 Intelligence* Marketing Data mediums providing brands with a measurable and targeted advertising solution Page 33 of 33