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Early stage startup funding in Latin America

Editor’s note: This post comes courtesy of Adam Komarnicki. Adam is a Chief Customer Officer at Fundacity, a Santiago-based startup that provides tools connecting startups and investors, to help them select and grow the next big thing. You can contact him at [email protected].

If you are a startup founder based in Latin America and tend to read US tech websites such as TechCrunch or Venture Beat, you wonder if the news about startup valuations and rounds raised is for real. The amounts are sometimes enormous! The reality in Latin America is quite different; serious financing is both harder to get and usually much less smart if you succeed. Don’t lose your hope however, because the situation is improving, especially for early stage startups. Let’s look at the most common options of external funding for such startups – LatAm angels and accelerators.

However, before starting to think where to look for funding, early stage startups should be asking themselves these two questions:

  • How much money do I need in the next 8-10 months to grow my business?
  • How important it is for me to attract “smart money” i.e. additional benefits from my investor such as advice and contacts?

We will give you an overview of your options based on these criteria.

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Lessons from women in Uganda: Chile, take note.

Mary is a small, slim woman no taller than 5 foot 3, but she speaks with a sincerity and conviction unparalleled among people two times her size, and when she does so, the world stops and listens. When you speak to her, her eye contact never wavers from yours as she carefully digests every word, consonant, and syllable that you say. She is a mother, a teacher, a leader, and an entrepreneur (in no particular order, she puts her heart into everything). Her laughter is contagious, her kindness infectious, her spirit uplifting, and her ambition inspiring. She embodies beauty and strength.

Mary (whose name has been changed for anonymity) is a woman that I met last April, who I had the pleasure of working alongside throughout 2013. Five years ago, Mary and her family were living in a mud shack. When a local organization offered to give her a microloan to start her own business, Mary wasn’t sure she was capable of becoming an entrepreneur, but she mustered up her confidence and began her own store, selling bottles of soda for around $0.20 USD in her small village. A few years later, Mary saved enough money from her small business to build a semi-permanent house. She and her family are healthy and financially stable; most of the money she makes now goes towards her children’s school fees to ensure that they receive a good education. Furthermore, she’s now an Assistant Director of the nonprofit organization that gave her the loan to start her business in the first place. She inspires women in three different countries to follow her lead. She is Ugandan, and she is the strongest woman I have ever met.

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Latin American Startups demo day at 500 Startups Silicon Valley

The following is an article from Digitantes posted on February 7, 2014 that has been translated from Spanish to English. Read the original version here.

This week, 28 startups presented their pitches at 500 Startups Demo Day, after passing through an acceleration process of almost 4 months in the heart of Silicon Valley.

During the program, these entrepreneurs have access to mentors and experts in different industries and disciplines. The program’s primary focus is improving the startups’ models of distribution, monetization, and design.

Startups from more than 10 countries, including Colombia, Brazil, and of course Mexico, had the opportunity to present their pitch in 3 minutes in front of investors and investment funds. The objective: proving to be an attractive investment opportunity.

Here is the list of Latin American startups that were present.

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Nazca Ventures Bets on Fashion E-Commerce in Two New Investment Deals

On January 22, 2014, PulsoSocial published an article highlighting Nazca Venture’s latest investment picks: Cranberry Chic and eGlam & Ropit. Read the full article here.

Nazca Ventures made its seed capital debut in December 2013 by leading a $1.3 round for the freelance job marketplace, Nubelo. This January it made its second and third investment selections in:

1) Cranberry Chic, an exclusive social network and e-commerce platform that allows fashionistas to share their styles, save lists of clothing items and accessories they have or want, purchase new items

2) eGlam & Ropit, a platform that allows end-to-end e-commerce services for fashion brands and sports teams. 

As Emily Stewart, PulsoSocial journalist notes: “Nazca Ventures is clearly placing its bets on fashion e-commerce, though neither of its most recent picks are going the most traditional routes in their strategies.”

 

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Digital Bank LatAm seeks innovative solutions for startups throughout the region

The following is an article from PulsoSocial that has been translated from Spanish to English. The original article, posted on January 29, 2014, can be read here.

The banking and finance sector of Latin America knows well the potential that start-ups have as a source of innovation in terms of New Digital Banking. Therefore, everyday we see more initiatives in the region that aim to integrate innovative start-up solutions with traditional banking.

Here we discuss Digital Bank LATAM, a banking innovation meet-up in Latin America organized by eBanking News, which touched down for the first time last year in Santiago, Chile, in which 23 startups presented their banking solutions. This year, Digital Bank LATAM 2014 will land in Bogota on May 14 2014, with the aim of revolutionizing the banking sector of Columbia.

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Crowdfunding: the collective financing revolution in Chile

The following is an article translated from Spanish to English from Asociación de Emprendedores de Chile (The Association of Chilean Entrepreneurs). The original article, published Jan 28, 2014, can be read here.

The current President of the United States, Barack Obama, issued a creative call to his supporters to finance the electoral campaign that brought him to re-election. While in North America donations to political parties are very common, Obama always showed interest in new platforms and technologies. This was how Crowdfunding came to be: a collective financing alternative that seeks to support a creative project through personal donations.

The method is used for the benefit for both parties because, on the one side, we have entrepreneurs that can meet their goals through donated proceeds, while on the other side, we find those who invest, who issue donations in exchange for various rewards.

One of the advantages of crowdfunding is that it democratizes access to capital for development of entrepreneurship. In addition, it manages to give publicity to projects that in the majority of cases would only remain an idea.

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Dear Chile: Thank you. Sincerely, Silicon Valley

An insightful Huffington Post article entitled, “Why Silicon Valley Should Write Chile a Much Deserved Thank You Note” piqued the attention of our AndesBeat team recently. Read the full article here.

In the article, Patrick McGinnis, a New York-based investor and entrepreneur, insightfully remarks on what we here in Chile have known all along: That US entrepreneurs have derived significant benefits from the world-renowned Start-Up Chile accelerator program. In his article, Patrick notes that: “For businesses with global ambitions, Chile serves as a low-costs laboratory where a team can test and refine its value proposition.” Continue reading

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GoDaddy Expands To Latin America

The world’s largest domain name registrar and Web hosting provider has now landed in Latin America. GoDaddy, a company that describes itself as “nearly as old as the Internet itself,” was born with the goal to “help people easily start, confidently grow, and successfully run their own ventures.” Its recent expansion into Latin America is grabbing headlines.

Entrepreneur.com reports that GoDaddy has “launched its entire suite of products in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Venezuela”.

WebProNews asserts that GoDaddy’s localization of tools into Spanish and Portuguese means that Latin American small business owners “can now purchase a domain name and build a Web site through GoDaddy without having to learn another language”.

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Virgin Media launches new game developer’s platform

Virgin Media just announced today they are in search of creators of casual games. They are being encouraged to work through Two Way Media, Virgin Media’s app development partner, to integrate, test, host, launch and monetize games on TiVo using its game framework which can make Flash games ready for the platform in under a week.

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For whom the bells toll…Startup Stock Exchange is live!

STARTUP STOCK EXCHANGE LAUNCHED TODAY AT 08:00 AM EST

WILLEMSTAD – The Startup Stock Exchange (SSX) has launched today at exactly 08:00 am EST. With the push of the enter-button Ian Haet, co-founder and CEO of SSX; and René Römer, CEO of the Dutch Caribbean Securities Exchange (DCSX), symbolically performed the opening. With this action, SSX’s website and investment systems (www.Startup.SX) went online. (image:  Ian Haet (left) & René Römer (right) shaking hands, congratulating each other. In the photo Dick Erdmann, one of the members of SSX Governing Board. )

SSX is a regulated, global marketplace for startup investing and funding. Investors worldwide can buy shares of vetted startup companies in all sectors and in different stages of growth.

Worldwide many entrepreneurs are building excellent businesses but don’t have access to the funding they need. At the same time, investors of all sizes don’t have access to vetted companies and diverse early stage opportunities. SSX changes all that. SSX is the marketplace that brings investors and companies together to achieve both their goals.  – Ian Haet, Startup Stock Exchange co-founder

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