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Youth Entrepreneurship development calls for support from various quarters. Primarily the need exists to initiate a Youth Entrepreneurship culture and drive amongst the youth in the society. The youth needs to think and aspire to be entrepreneurs and explore their potentials to the maximum. At the second stage, Youth Entrepreneurship nurturing calls for promoting awareness and providing training through education. The youth who wish to pursue their own business would need to hone their skills and enhance their knowledge on how to start and grow a business enterprise.
Nurturing Youth Entrepreneurship does not end with providing training to the youth. There needs to be a sustained effort through providing regulatory framework and dedicated support systems and tools to help finance the start up ventures by providing the seed capital at economical costs. Many countries have set up specialised funding agencies that focus on providing financial assistance in the form of loans, subsidies, debt re-financing options etc. to the first time Young entrepreneurs. In the current times we see venture capitalists looking out for bright and young entrepreneurs with fantastic business ideas to finance and help them get started. Such funding of brand new business ventures is becoming common in the high tech, IT and Service Sectors.
Normally in various countries, the Youth Entrepreneurship funding happens through three types of financial aid mechanisms. The normal options available are Free Grants, Fee Money & Debt financing |equity financing. In developed countries there exist various systems of providing grants to the new entrepreneurs to help them tide over their livelihood and initial expenses of starting a business venture. Many academicians argue that providing free money or grant does not help the business venture and might go into expenses that are not related directly to the business venture at hand.
The Princes Trust, Sistea de Apojo aos Jovens Empraserios [SAJE] in Itality, UK & Portugal and The Imprenditorialita Giovanile [IG] in Italy are some of the corporations and institutions that provide grants to encourage Youth Entrepreneurship. IG-Italy, provides grants and free financial subsidies to youth entrepreneurs in the age group of 18 to 35 to start their own ventures. They provide subsidies to cover up to sixty percent of the seed capital requirement of the business proposal. Prince’s Trust Business Program in UK supports Young Entrepreneurs with test marketing grants up to £ 1500.00. SAJE in Portugal provides grants to cover fifty percent of the capital and additional ten percent subsidies depending upon the specific region where the business is going to be located. The subsidies can amount upto 50,000 depending upon each business case.
In all cases where grants are provided to Youth Entrepreneurs, the conditions and criteria as well as the norms and documentation are likely to be very high and the selection process equally strict and lengthy. Obtaining free grants and subsidies is not easy and is very time consuming. In general it might be easier for entrepreneurs to search for commercial borrowing and other funding options than to depend solely on the free grants.
There exist several agencies and non profit organisations that help young entrepreneurs by providing them, guiding and helping them with preparing their business proposals, researching on finance options available and help prepare the project reports and recommendations to help with the sourcing of funds.
In most of the developed and developing countries, banks and financial institutions are offering soft loans to the Young entrepreneurs in a bid to develop the new sector. Soft loans to Young Entrepreneurs are provided at reduced rate of interest or the debt is structure in a way as to postpone the interest payments. The banks also go easy on the collateral and other documentation requirements in a bid to be more Customer friendly.
Micro Financing has caught up in a big way in most countries. Micro financing organisations are normally social enterprises like NGOs or Credit Unions and Trusts with a vast exposure and network in rural areas covering both organised and informal sectors. Young entrepreneurs find it a lot easier to obtain small loans without many hassles of collateral and documentation. If the capital required is relatively small, then Micro financing option suites very well.
Private Fund Managers and Angel Investors looking for opportunities to invest have woken up to the unlimited possibilities of funding some of the brightest and the best business ideas in the upcoming hi tech sectors like IT, medical sciences, bio-technology as well as other sectors like service sector, commercial R&D etc. The companies who backed first time entrepreneurs and business ventures like Hotmail, Google, Facebook and many more technology companies have reaped rich rewards. Having smelt the success, they are focussing on picking up bright and innovative entrepreneurs and helping them incubate their business ventures. Any Young Entrepreneur with the required technical knowledge, bright and innovative business idea need not look to banks for finance but he will find the VCs knocking at his door to partner with him.
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