Dynamic Equity is the first venture capital and private equity firm in Trinidad and Tobago. What this means remains a mystery to many people. Nevertheless, the business concept is simple. VC firms provide capital to private companies by investing as equity shareholders. In short, they offer private equity.

The economic role of private equity is similar to that of public equity markets; but with more bang for the buck. Public companies can raise equity capital from the general public by offering shares through a stock market. This is feasible for mature companies that can show a history of stability with steady and reliably growing profits. VC firms deal with more entrepreneurial companies. Such companies are often expanding rapidly, but may not yet be very profitable, and almost certainly do not yet have stability. VC firms seek to invest in the likely winners among those companies, by providing the equity capital to fuel their growth.

Studies in several countries have demonstrated the significant impact that VC financing has on economic growth. A good example is a 2005 report on The Economic Impact of Private Equity in the UK by the British Venture Capital Association. This found that on average, over a 5-year period, those companies backed by private equity firms: 

• increased sales at 2 times the growth rate of public companies,
• increased staff levels 5 times faster than public companies,
• invested 5 times more than the national average rate,
• increased exports at 7 times the national average rate.

Dynamic Equity was founded in 2000 to implement the VC investment concept in Trinidad. After obtaining regulatory approvals and completing a first round of fund raising it started investment operations in 2001. The first fund had investable capital of $ 35 million. Its objective was to make investments of $ 1 - 5 million as a minority shareholder at local private companies. By September 2006 it had completed investments into 6 companies. At the end of this year it is expected to be fully invested.

A second fund will continue Dynamic Equity's investment operations in 2007. The objective for this is to make private equity investments of $ 3 - 30 million per company. Its scope is expected to extend to other Caribbean countries as well. Over time, Dynamic Equity believes it can replicate the success of VC firms in other countries, and make similar contributions to economic growth in our region.