Métis Voyageur Development Fund - Métis National Council · Métis Voyageur Development Fund...
Transcript of Métis Voyageur Development Fund - Métis National Council · Métis Voyageur Development Fund...
Access to Capital • A necessary but not sufficient condition for the success
of our entrepreneurs
• Sufficiency requires in addition – Skills, addressed through ASETS programming
– A supportive legal regimen; cases, duty to consult and consequent IBAs
– Entrepreneurship, embedded in Métis culture
• Need – Demographics
– equity, community locations, rising aspirations and expectations
• But what is access to capital?
Capital spectrum
DEBT EQUITY
Banks • Debt • Risk averse • Past performance • Collateral based • Formula driven • No ownership dilution • Highly regulated
Métis Capital Corporations • Debt • Community geographic based • Collateral and/or cash flow based • No ownership dilution • Mission driven
Family, Friends and Fools • High risk for both
entrepreneur and investor • Debt, equity or grant • Invest because they like you • May never see a return • Makes for interesting
Christmas dinners
Government Agencies • Debt or Equity • Often participatory with other providers • Community geographic based • Collateral
SECOND LIEN DEBT SUB DEBT HIGH YIELD DEBT UNSECURED DEBT MEZZANINE DEBT CONVERTIBLE DEBT
Private Placement • Subordinated to senior debt • Debt or Preferred Equity • Load fees • Convertible to equity in certain circumstances • Collateral
Angels and Venture Capital • Equity, warrants • High risk tolerance • Future growth orientated • High growth, high margins • Take ownership positions • Require and exit strategy
Challenges • The Métis financial institutions (Capital Corporations) address
access to capital • Solid track record (MVDF is building) • Coordination of effort, with separation in decision making • The Métis capital corporations have been excellent stewards
– Money flows where there is both need and results
• There remain issues – Equitable access – We only cover a small portion of the capital spectrum – The amount of capital when inflation, demographics, changing aspirations/expectations and
opportunity are drivers of demand – In addition to the form of capital access there is a need for specific products and conditions
• Challenge then is to Government and Industry (framework)
Approaches • Government
– Equity across heritage groups and regions – Specific programming as close as possible to the entrepreneur, for better results – Become enablers rather than providers – Cover costs you demand – Consider early stage capital – Carefully consider regulation
• Industry – Sureties (letters of credit) – Payment terms – Contract administration – Investment in funds for limited periods – Financial industry (but not private equity models) – Seek robust partnerships, e.g. Carbonfree