Converse, jeans and t-shirts are replacing suits and ties in many business meetings across the Americas, as entrepreneurship and innovation ecosystems are interconnecting and playing a more important role in the dynamics of the region’s economy.
Last month I had the opportunity to cover the final round of La Idea in Miami, a program sponsored by the US Department of State and Univision that gave three Latino entrepreneurs winning packages that included up to $50,000 in cash and other business support services.
After a four-month competition with pitches taking place in New York, Bogota and Miami, the winner of La Idea was ‘Natural Sins’, a Costa Rica-based company created by two young Venezuelans that produces and distributes healthy fruit and vegetable snacks in several Latin American countries.
“With our $50,000 price we will expand our factory and obtain the certifications we need to enter into the US and European markets," said an excited Ivan Sosa, production manager of Natural Sins, minutes after the awards ceremony.
The sky is the limit for these young entrepreneurs at La Idea competition, NYC, November 2013.
The flow of entrepreneurs traveling from one country to another across the Americas in search of seed funding, mentoring and market opportunities is increasing. Since the 2008 global financial crisis some governments and corporations realized that the best way to tackle stagnation and build prosperity was through the launch and growth of new companies able to generate higher rates of both job and wealth creation.
But this doesn’t happen by magic from one day to the next. In recent years, a few Latin American countries have experienced rare coordinated effort between public and private actors that are creating certain conditions to boost entrepreneurship.
Places like Colombia, Brazil, Chile and Mexico are becoming new laboratories where local and foreign start-ups obtain support from several sources, and also where up and coming venture capital funds may be able to catch a big fish. Latin Americans are finding that companies born in collaborative environments rather than in hostile ones have a better chance at success.
Start-ups need resources to develop their prototypes and carry out market tests, and there are many institutions in the region willing to fuel their dreams. iNNpulsa Colombia, a government initiative that aims to promote high impact entrepreneurship in Colombia not only provides $150,000 grants to local entrepreneurs, but also invested $1,500,000 to help establish an angel investor network and three venture capital firms.
The ultimate purpose of this exchange of ideas and talent in the Americas is to build disruptive companies able to create extraordinary economic and social value. Latin Americans have watched the rapid rise of new Silicon Valley titans like Facebook, Twitter, LinkedIn and Paypal and want to get in on the action. This has inspired a surge in government programs like Start-up Chile, which is attracting early stage entrepreneurs from all over the world to start their businesses in the southern country since 2010.
Last year’s version of the 7 month start-up “accelerator” program received 1570 applications from 28 countries; 19 of the 100 start-ups accepted were from the United States. So, why are American entrepreneurs interested in going South? It’s simple, Start-up Chile gives each participant equity free $40,000 seed capital, a co-working space, mentoring and a 1 year visa to establish their businesses.
Entrepreneurship involves financial risk and Latin American private investors have traditionally been risk averse. That is why governments are doing well in developing models to support the surge of new ventures; in the end is a bet for economic growth that will benefit societies, like happened in Israel or Singapore.
Entrepreneurs need to overcome a huge number of obstacles to create something new, but good ideas are finding support. Aside from the emerging startup accelerators like NXTP Labs in Buenos Aires or 21212 in Rio de Janeiro, different types of competitions are gaining popularity in the region.
The MassChallenge is one good example. Based in Boston, Massachusetts, this world class start-up accelerator and competition receives thousands of applications from around the world, of young businesses dreaming to find a way into the US market.
Last year’s version awarded Keraderm with $50,000, a Colombian biotechnology start-up that treats burns and other tissue losses with cell coated sheets made from the patient’s own healthy skin.
“MassChallenge was an experience in which besides from the money prize we could live during four months sharing experiences and ideas with other entrepreneurs, and learning how to expand our businesses to key markets like the US." said Jorge Soto, CEO of Keraderm.
Also, entrepreneurs who already ‘made it big’ have become angel investors and mentors, giving back some of their time, energy and wealth to society. Dave McClure, founder of business incubator 500 Startups from San Francisco, acquired Mexican.VC one of Latin America’s first accelerators.
This move has connected Mexican entrepreneurs with affluent investors in Silicon Valley like Sequoia Capital, a multi-billion venture capital firm that recently took-off from Brazil leaving a couple of big investments including EO2 Solucoes de Pagamento.
The Americas are interconnecting through innovation and entrepreneurship. There are many actors helping startups walk through the ‘valley of death’, easing in some way the tremendous conditions of adversity.
So don’t get surprised if any of your friends decides to quit his job and work with a partner in a new business idea; probably he or any of the people that will surround him could be the next titan entrepreneur of the Americas.