The Impact of Training and Access to Capital for High-Potential Entrepreneurs in Colombia

Small and medium enterprises (SMEs) are thought to be important drivers of growth in developing economies, but entrepreneurs in these countries face many barriers, including poor access to training, finance, and business networks. In Colombia, Fundación Bavaria’s “Destapa Futuro” (Open the Future) program identifies promising enterprises and provides them with a suite of financial, technical, business, and training resources. Researchers found that the trainings did not affect key business outcomes, such as sales and profits, but helped entrepreneurs to expand their business networks.

Policy implications

Business training might not improve business outcomes, but it has the potential to support entrepreneurship by expanding entrepreneurs' business networks.

Additional information

Hypotheses/research question

Do tools such as business training, capital, and mentorship help SMEs overcome barriers to growth? Much of the existing research presents mixed evidence, and this experiment aims to understand how training programmes should be designed and delivered in order to best help entrepreneurs and foster economic growth.

Study design

Crossover

The programme used a competitive process to identify entrepreneurs with promising business plans and small startups. The average participant was 36 years old, had 16 years of education, and had four years of experience as an entrepreneur, and were 73% male. To participate, entrepreneurs completed an online application, which included questions on business characteristics, leadership potential, experience in business administration, and potential social impact. From the database of 8,400 applications, 475 candidates, half of them with business plans and the other half with existing startups, were selected and ranked. The pool of 475 entrepreneurs was divided into three groups: - the top 25 entrepreneurs all received the endeavor training (but were not part of the study sample because they were not randomly assigned) - the following 100 entrepreneurs were randomly assigned to receive training from either Endeavor or CFE - the remaining 350 entrepreneurs were randomly assigned to either the CFE training group or the comparison group, which did not receive any training.

Cost benefit ratio

Not available.

Rounds of data collection

Total rounds unknown.

Baseline data collection and method

Online application with questions on business characteristics, leadership potential, experience in business administration, and potential social impact.

Data collection method and data collected

Not available.

Unit of analysis

Individual

Stratification

Yes: By entrepreneurial prowess.

Delivery partner

Bavaria Foundation,Centro de Formación Empresarial,Endeavor Global

Reference

Schoar, A., 2015. 'The Impact of Business Training and Capital for High Potential Entrepreneurs in Colombia'. Innovations for Poverty Action - Project Registry.

The Impact of Training and Access to Capital for High-Potential Entrepreneurs in Colombia

Key information

Additional information

Key facts

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