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The challenge of investing in startups: Show them is not a risk

The Open Space of BBVA Bancomer hosted the Open Talks Investment meeting on February 28, where experts in venture capital, investment, accelerators, company builders and crowdfunding analyzed the challenges, differences and benefits for the candidates for entrepreneurs.

Santiago Zavala, partner of 500 Startups that directs 500 Luchadores, the Spanish-speaking investment fund for Latin America, explained that “a venture capital fund invests in technology companies at an early stage, when things are coming to an end. team, product development and the market, supporting them to reach the next stages, where they have had the fortune to compete with several of the largest funds, not only of the country, but of the various regions in the world”.

The expert also analyzed the ‘venture capital’ panorama in Mexico, Latin America and other geographies. Zavala exemplified that, not many years ago, in 2005, the way of doing business was different, since many processes were involved and a very long period was required. “Today there are too many people who are living little by little this transformation that is reaching more industries. When we talk about investments, we see how a series of variables are fundamentally changing the way we do business and maybe that is the explosion that is currently being experienced”.

How to invest in ‘startups’?

Although a way to obtain resources to start an enterprise is obtained through family goodwill or having the loyalty of friends, there are also financing platforms, willing to study and evaluate the projects to invest in them.

Luis X. Barrios, CEO of Arkangeles.co, online collective financing platform, explained that investing in a ‘startup’ has as advantages the opportunity to contribute to the solution of some problem of society or contribute to the solution of some topic ecological, depending on the business area that the ‘startup’ serves and in which you want to participate.

Fintech BBVA works with ‘startups fintech’ in Latin America to create the digital solutions of the future BBVA is developing an open innovation program in the region, known as ‘fast track’, which makes it possible to streamline and make more efficient the processes that the Group develops together with the ‘startups’ to implement new digital products and services for the benefit of customers.

Investments can be made from $ 10,000 pesos. They are together and have the accompaniment of expert investors, which provides confidence and reliability in the investment.

The specialist mentioned some points that should be considered before investing in a ‘startup’, such as analyzing and reading the market, knowing the execution strategy and the investment plan. Another relevant point is to investigate the sector, know the competition, and choose a reliable investor, who can report how many rounds of financing that project has, what percentage has been transferred, so that all this information can be crossed and validate the opportunity to increase.

Putting the accelerator

Becoming an entrepreneur and creating a ‘startup’ is not a simple process. The natural evolution of the company can be built through a long and difficult learning. However, there are acceleration programs of startups that help and increase technical and business knowledge, as well as facilitating the growth and commercial success of the business.

This process of acceleration was explained by Christine Chang, director of Startbootcamp Fintech in Mexico, Jackie Ros, of the global accelerator of Techstars and José Manuel Ramírez, director of Bimbo Ventures, which through the accelerator Eleva, seeks to attract talent and transform the food sector.

The speakers agreed that the ecosystem in Latin America is in full growth. Entrepreneurs have become more sophisticated and have more experience. For Ramírez, the real challenge of the ‘startups’ is to solve a fundamental problem and not just emulate the success of other companies.

Finally, the presence of Amanda Soto, co-founder and legal director of Play Business, the largest collective financing platform in Mexico, was also a participant in the discussion forums of the Law to regulate Financial Technology institutions in Mexico ( Fintech Law) and the secondary regulation of such ordering with the National Banking and Securities Commission (CNBV) and the Ministry of Finance and Public Credit. Soto talked about how to raise capital taking into account the experience he has in this area.

Finally, the participants affirmed that the investment in ‘startups’ will not stop growing and the range is increasingly varied, going from the creative to the solidary or social, without leaving out the business and financial, all of them with a specialization each greater time. Surely, he pointed out, his growth will be growing in the coming years.

Published inStartups

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