Social Attributes .1 Capital Sources

Access to capital is important for all starting companies.

However, for starting sustainable companies this need is often even greater, since the initial investment is frequently higher than is the case for other enterprises (Cohen, 2006).

Capital can come from multiple sources, including the entrepreneur’s friends and family, angel investors, venture capital, investment firms and banks, but also alternative sources of capital, such as crowdfunding campaigns.

In Aruba, there are six commercial banks where one can apply for credit. According to a report by the Aruba Chamber of Commerce (2015), the banking sector on the island is relatively conservative in comparison to those located elsewhere. In reality, this signifies that in order to acquire credit not only an elaborative business plan, a positive credit background, and the ability to pay back the loan has to be proven, but also equity, and collateral such as a house should be present.

The amount of equity is dependent on the type of business one wants to start or operate. Real estate and tourism are viewed as low risk, while sustainable businesses are frequently seen as “new” and “high risk” and therefore require more equity (I-F-1). In total, banks prefer to have minimally 100 percent of the loan covered. However, starting entrepreneurs often do not possess a house or sufficient amounts of equity to provide this, thereby excluding them from these sources of investment capital.

It is therefore is not surprising that none of the interviewed have acquired finances through this method. Several of those interviews reiterated the notion that acquiring finance through banks was not a possibility for them, experiencing the banks’ mentality, slow progress and requirements as inhibiting factors, and therefore they sought different ways.

One of the interviewees originally applied for credit from a bank, stating that:

“We did [...] some checking, but the bank [...] they are more interested in loans for houses and cars and it was like not easy. [..] For them this is a big risk operation. I do not know why.” (S-E-2)

Therefore, since it took a “long time” and the process was

“difficult”, the sustainable entrepreneurs decided to opt for crowdfunding instead. Another interviewee also acquired their capital through crowdfunding, while several others have either acquired their starting capital by themselves or through friends and family (S-E-1;S-E-5:S-E-6).

Another interviewee refrained from applying for credit from the bank because “they will not understand”, yet has instead acquired funding through Qredits, which is a micro finance business from the Netherlands (S-E-7).

In 2017, Qredits opened a branch in Aruba and provides loans up to ƒ94.000 to small and medium sized enterprises.

In comparison to the regular process of acquiring capital, Qredits focuses more on the business plan and the unique selling position of the company than on the provided equity and collateral, thereby enabling starting entrepreneurs the opportunity to start their business (S-E-7; I-F-1).

Furthermore, Qredits is perceived to understand and value the sustainable aspect of businesses, and provides those that acquire a loan with coaching in different fields, such as marketing, finance, administration and sales. Additionally, Qredits assists with the writing of business and financial plans, and also attempts to connect their clients with commercial banks if they require more than the original ƒ94.000. Therefore, Qredits seems to provide an alternative to entrepreneurs that otherwise would not be able to acquire finance, among them many current and potential sustainable entrepreneurs.

4.2.2 Worker Talent

In order for sustainable businesses to effectively conduct their business, the presence of employees with the right

technological and sustainable background is required. In Aruba, there is a lack of educated local Arubans, specifically with a background in sustainability. Specifically, only 13 percent of the population is educated on a Bachelor level or higher and subsequently 60 percent of the private sector experiences a skill gap (Central Bank of Aruba, 2018).

This can be accounted to the high amount of brain drain, the outflux of educated people towards other regions. For prospective students, the curriculum at the University of Aruba is experienced as limited in comparison to those in other countries, such as the Netherlands or the United States. Therefore, 300 Aruban students annually leave to study abroad, while only 20 percent of these return within 3 to 5 years. This can be accounted to the fact that only 25 percent of Aruban young professionals think that there are local growth or business opportunities for them on the island (Central Bank of Aruba, 2018).

Most of the interviewed entrepreneurs claimed that they were eventually capable of finding people with the right knowledge concerning sustainability and technology.

However, this knowledge would have to come from foreign professionals, rather than from local Arubans, since “Aruba doesn’t really have a that type of knowledge” (S-E-1).

The general consensus therefore is that “you have to find somebody in Holland [...] if you do want to pursue that type of personnel.” (S-E-4).

However, it is unsustainable for a region to be dependent on outside knowledge. Fortunately, the University of Aruba is perceived to understand the necessity to educate the local population in this regard.

They bring their experience. They will take data from their environments. They will compare that without having broad contextual knowledge, will give an advice for solutions that are based on their backgrounds within continental Europe or continental United States, whatsoever. And then it’ll go,

UAUCUStudent Research Exchange Collected Papers 2018

38 go away again, leaving the islands without that expertise. It is our strong conviction that if we want to have sustainable practices in this society, we need expertise to be here and build up from here. (R-U-2)

The University of Aruba might therefore be able to effectively solve this dependency on foreign worker talent through expanding its curriculum with technological and sustainable-focused programs, providing the local population a plausible alternative to studying elsewhere.

This would decrease the brain-drain and therefore increase the sustainability of the Aruban economy.

4.2.3 Networks

Networks are especially important for sustainable entrepreneurs, since these can provide effective ways of acquiring knowledge and resources early in the startup phase. There are multiple organizations in Aruba that attempt to enhance the network for sustainable entrepreneurs.

Firstly, there is the ATECH Foundation, a for-purpose organization that has organized an annual conference since 2015 in order to unite startup-founders, investors, entrepreneurs and other stakeholders in the industry, and thereby attempts to stimulate network building and educate the local Aruban population. At the event there are a wide range of speakers, ranging from tech entrepreneurs to sustainable development experts. Furthermore, startups can participate in a pitching contest, in which the winner will receive $20000 (ATECH, 2017).

Moreover, there are other entities that organize networking events. One example is creative platform Beam, which organizes multiple events, such as Beam social, where creatives and entrepreneurs connect. Furthermore, Beam provides starting companies a platform where starting entrepreneurs can expand their networks. The Aruban Chamber of Commerce also organizes networking events,

which are attended by numerous entrepreneurs, but also workshops, lectures and seminars, whereafter networking activities can be conducted (S-S-2; S-S-1).

However, there are few activities specifically focused on networking for sustainable entrepreneurs. In the tourism sector, the Aruba Hotel and Tourism Association (AHATA) has created the AHATA environmental committee, whose members come together once a month to discuss sustainability related issues. Furthermore, they organize events, such as beach cleanups through which they stimulate a sustainability-focused network of hotels, the public sector, and the community at large (S-E-6).

Furthermore, there is the Americas Sustainable Development Foundation (ASDF), which “is an independent not-for-profit advisory foundation that connects people with innovative ideas to take concerted actions to address sustainable development challenges across the Americas”

and organizes networking events, such as the Circular Economy Club Event.

Most of the interviewed sustainable entrepreneurs did not experience that there were numerous events in which they could participate; however, two did participate in informal and formal networking events organized by AHATA and the ASDF, which they experienced positively (S-E-4;S-E-6).

In order to acquire resources from the network, however, sustainable entrepreneurs must be willing to provide resources, such as knowledge, to other entrepreneurs, but also to seek these resources if needed. Most of the interviewed sustainable entrepreneurs would be willing to assist other entrepreneurs if they would seek advice. This culture of sharing for the greater good was illustrated by one of the interviewed who stated that:

We really want others to do the same thing, we’re not trying to keep this a big secret, but we’re trying to show people

that, you know, it’s something that is, it’s not hard to do, but you can also do it. So if they have questions, we’re more than happy to answer.(S-E-6)

Two others, however, were willing to share basic information, yet felt that this should be limited, since “[they] did all the work and then you just give it to somebody”, while another felt that their “data is proprietary” (S-E-2; S-E-4). Moreover, all of the interviewed sustainable entrepreneurs would ask others for resources, and have successfully done so, since multiple of them have acquired not only advice and assistance, but also affordable space and financing through their networks (S-E-2;S-E-3;S-E-7).

4.2.4 Mentor and Role Models

The presence of sustainable role models and mentors can greatly increase the likelihood of entrepreneurs starting and successfully operating sustainable enterprises. On the island of Aruba, there is not a comprehensive history of sustainable entrepreneurship; almost all of the interviewed sustainable enterprises were less than 6 years old, and therefore it is unsurprising that almost none were inspired by established sustainable entrepreneurs before them.

However, one of the interviewees who started their business this year had been inspired to do so by another Aruban sustainable entrepreneur:

I came in contact with a very good friend of mine, [individual], she has [business name] and [...] started recycling, and then you do more research and you encounter stuff [...] and if we all do a little bit, [...] we will do better off.

(S-E-7)

Therefore, we can already see that relatively recently established sustainable businesses inspire other individuals to become sustainable entrepreneurs themselves.

Concerning mentorship, there is a similar tendency. Solely one of the interviewed sustainable entrepreneurs claims to have a mentor (S-E-7).

4.3 Material Attributes