In an article from the Harvard Business Review, Alvaro Rodriquez Arregui states, “For there to be a sizable number of new enterprises and for these to grow and thrive; they need funding, and this funding usually comes from venture capital (VC).”
We applaud Sr. Arregui for this statement which is clearly true. Mexico has suffered decades of corruption within both political and business sector. In 201o it was estimated that Mexicans paid 32 Billion Pesos of bribes which is the equivalent of almost $2.5 Billion US dollars at todays rate. Not an insignificant sum. This has been partly due to entrenched due to dominance by large and often closely controlled businesses. The country has benefitted from an industrious population that creates plenty of small businesses, but there simply is no methodology for venture, or angel backed funding to create the types of companies that have come to define the United States.
Sr. Arregui goes on to point out that “Josh Lerner of Harvard Business School said the Latin America VC Industry still has to go through the growing pains that Silicon Valley did 40 or 50 years ago during its embryonic days”. Perhaps Mexico could expedite this process by leveraging technology and crowdfunding platforms being developed outside of Mexico could accelerate this process. Platforms are quickly forming in the United States. We expect the successful portals will soon be looking to expand their reach into underserved markets. The HBR article highlights that early stage investing is the riskiest – and more so in Mexico. Platforms which can easily reach across borders could generate a larger pool of potential investors.
There are many other areas where Mexico has some work to do. Many are obvious. Having said that, a strong and growing entrepreneurial class does much to further Mexico along in its path to greater prosperity while also helping the country to their north in many foreseeable ways as well. Encouraging possibilities for all.
