That meeting 13 years ago yanked Cantero from the structured formulas of modern banking to a different side of balance sheets, in a mad game of entrepreneurial “Tron,” dashing to and fro, raising money for small- and mid-sized businesses in Puerto Rico.
“The first thing Francisco did for me was to take me out of the box that I had self-imposed: ‘I was a banker, I was a banker, I was a banker,'” Cantero says repeatedly as tears well up in her eyes. “Puerto Rico has always been my passion. I channeled that passion by being excellent at my job. I wanted an international career, I achieved it, always with the intention of returning to Puerto Rico, but I thought I was going to return to Puerto Rico to be a very good banker.”
Francisco, she continued, “was the first person who made me see that I could be good at something else. You would have to ask him what he saw, how he saw it and what crystal ball he used. That opportunity changed my life. And, when I said ‘yes,’ I felt a certainty that I had only felt when I told my husband that I was going to marry him. There is no rational explanation.”
Her “till death do us part” with private equity has been a journey into an ecosystem bereft of social conscience and funding. “Back then people did not see the point to funding small- and mid-size businesses,” Cantero recalls, as if to reaffirm the progress made from seed to tree thus far.
Guayacán planted its first crop on arid ground because its founder, the late Ricky Adsuar, a special advisor at the Government Development Bank (GDB), believed Puerto Rico needed to develop a private equity market. “So he said: ‘How do we go about building the ecosystem as we go?’ And I think that sort of mentality is something we’ve maintained for 30 years, and it’s something that we can appreciate both on the fund side and on the program side.”
Adsuar founded Guayacán in 1996 in partnership with Abbott Capital, an independent investment adviser and private equity asset manager. Then Adsuar passed suddenly, less than a year later.
Guayacán after Bob
This left William Lockwood, a former head of Puerto Rico’s Government Development Bank devoted to Adsuar’s idea, as a founding board member suddenly thrust into a recruitment campaign that had him reaching out to such innovators as Bob Dávila, an experienced banker with Chase Manhattan running through his veins.
As Cantero tells it, Guayacán AB (After Bob) came to be out of boredom. Lockwood retold the story to Guayacán’s current executive director like this: “We’re doing the funds, but we’re not being effective at connecting that with the local economy. And so I want you to help us do that. So, as he likes to say, they were bored.”
Bob, the banker, got busy seeking out best practices being taught in robust entrepreneurial jurisdictions around the world. He wanted to bring Puerto Rico closer to coordinates where money met ideas.
“That was his thing. ‘Let me go out there, let me travel, let me go out there, let me find the best resources… and then, find a way to bring them to Puerto Rico.’ So, he put together a proposal that was called the Guayacán Entrepreneurship Center, and he took it to PRIDCO [Industrial Development Company] at the time, and he said, ‘You guys need to help us. This is about developing this new class of entrepreneurs in Puerto Rico.’ And, he convinced PRIDCO to give Guayacán a small grant to start the programs.”
This is how the Guayacán Entrepreneurship Center came to be the organization’s first program designed for companies at the startup stage. Prior to Cantero’s Guayacán, the word “startup” was not in Puerto Rico equity’s vocabulary. “Guayacán, as an organization, was used to talking about private equity in ’96, when no one was talking about private equity in Puerto Rico,” Cantero recalls.
Puerto Rico had a very different landscape from a liquidity point of view, and generally people did not understand private equity when the Island had banks for loans to help small- and mid-size businesses grow. There was a disconnect between funding intent, legacy and success.
Guayacán’s seed cash brigades got a wake-up call from Bob, who saw companies ready to take next steps, to run, being ill served by support designed for embryos. To that end, Guayacán started to tailor programs designed for companies at different stages of growth.
Guayacán developed a unique sustainable model supported by private investment capital and corporate and individual contributors. Under this model, the organization has been able to create six local private capital funds. It also created the Guayacán Endowment Fund. These instruments help guarantee continuity for the organization’s programs to develop, strengthen and promote Puerto Rico’s entrepreneurial ecosystem.
Private capital funds
There are six funds, totaling approximately $400 million from local capital, which are managed to finance the day-to-day operations of the programs.
Guayacán Endowment Fund
This is a separate fund created from donations and the sponsorship of corporations and individuals who support the Island’s entrepreneurial development. This fund provides the necessary support for the business education programs.
Funding across time
• GFF I (1996): $55.5 million
• GFF II (1999): $62.0 million
• GFF III (2007): $81.8 million
• GFF IV (2015): $84.1 million
• GFF V (2018): $36.5 million
• GFF VI (2023): $50.1 million
By then, Bob had done a couple of editions of Enterprize, for startups. Around 2006 or 2007, right before the financial crisis, he said, “Wait, we’re giving all this education and tools to the early-stage companies, which are not really the companies that are moving the needle for our economy. What would happen, as a hypothesis, if we were to offer the same education and tools, tailored to their level, to larger companies?” Cantero recalls.
That question put Cantero and company on a quest to find an answer that came through trial and error on other fronts. Guayacán began doing fellowships with a program at the Massachusetts Institute of Technology (MIT) called the Entrepreneurship Development Program, or EDP. That program at MIT was really at the forefront of entrepreneurial education.
“So, Guayacán would put out a newspaper notice: ‘We’re looking for fellows who want to learn about entrepreneurship,’ and people would apply. And Bob would interview each and every one of those people, and we would decide who would get the Guayacán fellowship,” Cantero explains. The Guayacán fellowship covered half of the tuition, so the entrepreneur had to pay for the other half, which is a bit of our mindset today: “you have to have a little bit of skin in the game,” Cantero adds. It was part of the training and development process.
Ángel Pérez, a former fellow himself in 2006 who is now the chairman of the board, asked two important questions: Why don’t we bring the program to Puerto Rico? And why don’t we design something for these later-stage companies? “And that’s how the Guayacán Venture Accelerator (GVA) was born,” Cantero recalls.
One of the issues identified through the GVA program dealt directly with helping family businesses plan their successions. Cantero explained that it was an important issue on a generational scale.
“We started being deliberate at investing in strengthening the ecosystem since 2012. In 2022, when that initiative was turning its 10-year anniversary, we looked at the ecosystem again. And what we saw was that there wasn’t a lot, because we still need a lot, and we still have an ecosystem that is still growing. It’s better than 15 years ago… but it is still a nascent… ecosystem. Right? It’s not really mature. It’s not a mature ecosystem yet,” she says.
So the organization looked back at the ecosystem, and what it saw lacking was progress in supporting entrepreneurs in the next stage. People who had ideas, or who had one- to two-year-old enterprises, were provided with resources. But as those enterprises began to move into the three- to five-year stage of their operations, they needed a different kind of support, and no one was really providing that assistance. “So, we went back to our collaborators and allies in the ecosystem. Guayacán is one of the main partners for Banco Popular, and we asked them whether they were interested in developing, with us, programs that provided, first, mentoring,” Cantero explains.
At the same time, mentoring allows for more individualized support, depending on what each company needed. “These companies at this stage do not need a one-size-fits-all program. They needed more catered programs,” she says, noting the importance of helping companies grow on a solid footing.
Power tandem on board
Today, two new board members bring familiarity and passion to the Guayacán equation. Beatriz Polhamus is a Senior Vice President of the Social Commitment Division at Banco Popular, who helped create Scaleup Bootcamp in 2022. The program, developed for companies that are ready to scale beyond the startup stage, was founded to propel them to the next level. Some 132 companies are now bootcampers who have started to scale.
“I think that one of the main reasons we’ve been collaborating with Guayacán for so long at Popular is because, first, they’re quick to respond and iterate, no matter what,” Polhamus explains. “Yeah, we’re fast, we’re quick. And we try to eliminate the red tape whenever possible. So, at Popular, we’ve actually been supporting the evolution, or the strengthening, of the entrepreneurial ecosystem.”
The other new board member in Guayacán’s tandem, Mónica Fernós, is a Vice President at MCS, who has served as an advocate for Guayacán since 2016. “The MCS Foundation joined Guayacán’s Enterprize program when it was created,” Fernós recalls. “To make a long story short, we are one of the main sponsors of Enterprize. One of the awards that we give with great pride is Health Innovation, because this is a full circle for us. MCS wants to identify innovators in healthcare, and Guayacán is the channel through which we find those entrepreneurs who have these fantastic ideas that can benefit the health industry,” she adds.
Cantero, Polhamus and Fernós, a trifecta of women for empowerment, put it best: “Our thing is social commitment, foundations, nonprofits.”
