In what came as a big Jab-chor (support) to the cash-strapped aspiring entrepreneurs, a local businessman invested Nu 4.5 million in two startup businesses.
Through the Jab-chor programme, Kuenzang Dechen invested Nu 2 million for 30 percent equity ownership in Sadone design. Himalayan Foods received Nu 2.5 million for 25 percent equity ownership.
The first partnership deal under the Season 2 Jab-chor platform was signed on July 30 between angel investor Kunzang Dechen and Sangay Nedup, the founder of Sadone Design and with Bikash Gurung and Tshering Dorji, founders of Himalayan Foods.
An angel investor is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. Angel investors are localised as Jab-chor.
Season 2 Jab-chor featured five entrepreneurs who pitched to investors during the 2nd biennial summit of the Bhutan Economic Forum for Innovative Transformation (BEFIT).
Sadone Design had been struggling to stand out amongst competitive designing businesses. Sangay Nedup, the founder was earning his bread from random logo and web designing proposals.
Though he had innovative business ideas, the amount he received from Priority Sector Lending (PSL) was not enough to even buy designing kits.
Initially, his focus was on graphic designing projects, but with the investment, he will be making souvenirs such as Thangkas, Kuthangs, and statues . He said that the business will gradually move towards designing flooring and ceilings using digital techniques.
“Besides digital designing, the process will serve my ultimate intent, which is digital archiving of these aesthetic artifacts.”
Jab-chor came as a rescue to many dying startup business. Through Jab-chor, he said, Sadone design received a wider audience, financial support and value addition. “The brand- Sadone design is proposed through this platform. Without investor, my business would have remained just an idea.”
The investor, Kuenzang Dechen acknowledged Jab-chor for providing the investors with a potential platform to double their return on investment. He said that it was BEFIT which pushed him to invest. “Every business comes with risk. The small economy should start with small business and more investors should come on board to help young business and earn your share.”
Jab-chor season 2 focused on scaling up the business. He said that it was an excellent and viable platform. “The foremost reason why entrepreneurs fail is that they lose out to scale up the idea stage.”
While the market is swamped with imported chips, Himalayan chips is making a niche market. The founder of Himalayan Foods, Tshering Dorji said that his business was not able to meet the market demand and was short of machines.
With Nu 2.5 million, he said that the focus will be on scaling up and to penetrate the international market.
Jab-Chor is a platform for young Bhutanese entrepreneurs to nurture and grow their business ideas through access to finance from potential investors. It is a joint initiative of Royal Monetary of Bhutan to encourage successful venture supported by the legally executed business partnership.
Despite great business ideas, young entrepreneurs particularly startups were faced with the challenge of early start-up equity.
Although primary production-related projects are eligible for a 100 percent loan backed by insurance under PSL, other projects have a 70 percent loan to 30 percent equity ratio.
However, Jab-Chor complements the Priority Sector Lending (PSL) initiative.
According to Kuenzang Dechen the main challenge startup business face is in scaling up. Majority of the startup business remains stagnant without financial access, market penetration, and competition –copycat syndrome.
Meanwhile, RMA is planning to make Jab-chor a semi-annual programme to connect maximum entrepreneurs with investors.