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Shuyin Tang, co-founder and CEO of Beacon Fund, is delighted that she and her team have been able to gain valuable insights into the Southeast Asian economies over the last two years – especially the target group of “unsung heroes”, as she emphasises.
With this term, Tang is referring to companies that are often overlooked by traditional venture capital and private equity firms, who generally expect high growth and an exit in five to seven years. Instead, the Beacon Fund offers purpose-linked loans and mezzanine financing (a mix of equity and debt) for profitable, cash-flow-positive businesses that are enjoying healthy growth.
The Swiss Entrepreneurship Program (Swiss EP) has been supporting local initiatives and start-up support organisations since 2015 so that they can offer better services to founders. Swiss EP’s goals include creating future-oriented workspaces, making it easier for businesses to access investment and improving support mechanisms at every stage of the growth cycle. They achieve them by strengthening local business ecosystems in Peru, Vietnam, Serbia, Albania, Bosnia and Herzegovina, North Macedonia and Kosovo.
The Swiss Entrepreneurship Program is financed by the State Secretariat for Economic Affairs (SECO) and implemented by Swisscontact.
A study by BCG and MassChallenge shows that women-led businesses deliver 12%-higher annual revenue and need a third less capital on average than start-ups led by men. Despite this, women have disproportionately less access to two common forms of financing for new businesses: venture capital and bank loans.
In 2021, companies founded by women received just 2.2% of the total venture capital invested. When it comes to bank financing, studies have shown that women are awarded fewer business loans than men. This phenomenon can be attributed to a multitude of factors, including gender bias among bank employees which influences the bank’s processes and decision-making. In addition, women generally have less access to personal assets, especially material assets like real estate, which they could use as collateral.
Beacon assesses businesses on the basis of their ability to generate cash flow and their growth potential, not just the collateral that the business owner possesses. The fund offers a range of products, such as straight loans, loans connected with a revenue share and venture debt.
Given the many misconceptions and the considerable need for education that still exist in relation to debt products, Beacon has held numerous workshops to help founders weigh up the pros and cons of debt and equity and select the right mix for their company.