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Métis Voyageur Development Fund Métis Nation – Industry round table March 2013

Transcript of Métis Voyageur Development Fund - Métis National Council · Métis Voyageur Development Fund...

Métis Voyageur Development Fund

Métis Nation – Industry round table

March 2013

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

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