The Venture Capital (Amendment) Act, 13 of 2005 which was assented to on July 13, 2005, seeks to increase activity in the venture capital industry in Trinidad and Tobago.

Some of the more significant aspects of the Act as amended include:

1. Increase in Equity Capital of Venture Capital Companies (VCCs)
The maximum “paid-up” capital with which a venture capital company (vcc) shall carry on business, has been increased from twenty million to one hundred million dollars.
This will allow venture capital companies greater flexibility in financing projects of varyng profiles and returns.

2. Scope of investment activity increases for Venture Capital Companies
The scope of investment activity for venture capital companies will be expanded to allow investments in companies engaged in the extraction of oil and gas. This development is likely to facilitate local content, in both the upstream and downstream operations in the energy sector. Entrepreneurs in this sector, can now have enhanced opportunities to access funding.

3. Range of financing instruments expands
A venture capital company is no longer required to restrict its investment in a Qualifying Investeee Company to common shares. Preferred shares have now been included in the definition of equity to alllow for greater flexibity in the structuring of deals.

4. Increase in Equity Capital for investee companies
The maximum share capital for Qualifying Investee Companies (QICs) has been increased from three million dollars to fifty million dollars. This change will result in an increase in the number of companies which qualify for venture capital funding.

5. Fit and proper test for Fund Managers
Every person charged with the responsibility of managing a portfolio of funds of a venture capital company must be deemed a fit and proper person. Fund managers must now possess the necessary academic and practical training as defined in the Act.

CLICK TO VIEW THE VENTURE CAPITAL (AMENDMENT) ACT, 13 OF 2005