We interviewed Susana Garcia-Robles, a leading woman in the field of global entrepreneurship who also participated in the colloquium “Entrepreneurship Ecosystems of Latin America and the Caribbean”, within the cycle “Science in Motion”. In this note he tells where the regional challenges of the entrepreneurial world, affected by the pandemic, are focused.
Susana Garcia-Robles, current venture partner at Capria Ventures, began connecting with the entrepreneurial universe when that world did not yet have the popularity it has achieved today. Its merit was doubly significant because, in fact, it was linked to a strong gender commitment when the field was still dominated mostly by powerful men. In the 90s, Garcia-Robles promoted and strengthened the role of women in this activity and embarked on an outstanding professional career that today places her as one of the most significant references in the environment.
A graduate of Columbia University in New York, García Robles co-founded WeXchange, the first networking platform and pitch competition for high-growth female entrepreneurs in Latin America and the Caribbean, since 2012, and later did the same with WeInvest, a platform for women investors in the region.
He has more than 20 years of experience in seed fund and entrepreneurial capital investments in Latin America and the Caribbean, also building business ecosystems and working together with governments and with the private sector. She also became one of the main pillars in the design of the MIF/IDB Lab strategy for impact investment of seed and entrepreneurial capital in this part of the world, to the point that she has been nicknamed “the godmother.” of entrepreneurial capital in LAC.
On this occasion, UNESCO Montevideo interviewed her to find out how the activity is in the region, what impacts the pandemic had and where the main challenges that Latin America and the Caribbean must visualize to enhance their development are located.
Can Latin America and the Caribbean be defined as an entrepreneurial region?
Absolutely, entrepreneurial spirit and resilience have been proven more than ever during the pandemic. The region has entrepreneurs who come from all over, the obstacle is the lack of access to financing that makes it difficult for many startups to gain traction and scale. What in English is called “entrepreneurial grit”, that ability to reinvent oneself in the face of obstacles and come out “in good shape” is something that entrepreneurs in the region know very well, due to the number of crises of all kinds that we have gone through in our countries. I dare say that that is why there are good stories even with the pandemic, after the initial moment of shock in April.
Entrepreneurs and investors reacted, important rounds were closed and exits were achieved at attractive multiples. At the same time, it must be recognized that the ecosystems are still incipient in the region and there is a lack of coordination between the different actors that comprise it: government, regulators, academia, service providers (lawyers and auditors who understand VC), entrepreneurs, financial vehicles from incubators to capital markets, through angel networks, accelerators, company builders and seed and entrepreneurial capital funds, among others.
What elements or conditions are needed to enhance this development?
Some countries have more developed ecosystems, such as Brazil, Argentina, Chile, Colombia, Mexico, and others are undergoing incipient but promising development, such as Barbados, Jamaica, Peru, Uruguay, Ecuador, Bolivia, Guatemala and Costa Rica. . The entry of accelerators and company builders helped a lot to make access to financing more democratized, and women also entered into entrepreneurship with more force - this gender integration was very necessary to obtain better financial results.
But there is still a long way to go:
- There are countries that do not have venture capital or entrepreneurial capital funds,
- angel networks are not very active, or if they are, they invest in few companies,
- There are no banks that grant what in English is called “venture debt”: loans that are for young technology companies without assets, that can be customized so as not to impose an exaggerated burden in times of early financing, and that help the entrepreneurial team Do not dilute yourself too early in the fundraising process,
- The regulations of the different countries are not very friendly for this asset class and tax incentives are lacking for individual investors and angel networks, and
- The government should be another investor in some funds, with programs such as that of Mexico, Colombia, and soon Peru, where the role of catalyst for the industry is operationalized by investing together with the private sector, in VC and PE funds managed by professional firms in the private sector and where the government has no interference.
The lack of these elements makes a big difference: let's remember that an entrepreneur without access to financing is like an endangered species: he cannot survive.
Are you optimistic about what you can achieve?
I have seen the development of the region since 1999. Before, it took longer to create connections and build bridges, because the world was not as digitalized or globalized in its ecosystem approach. I have been observing for several years now – seven or eight – that there is a lot of dynamism in the region, a desire to invest, not only in individual cities or countries, but to grow expansion towards other countries in the region. There are funds from Mexico, Chile, Argentina and Brazil that have a regional thesis, such as that of the Pacific Alliance, or the Southern Cone, thus achieving cross-fertilization of more developed ecosystems with more incipient ecosystems.
In Ecuador, Peru or Bolivia, for example, there are startups, but there are almost no VC funds. But if a fund from another country has these countries as one of its target countries, the ecosystem speeds up. COVID accelerated the digitalization of the region and despite the lack of human contact, we are faced with more collaborators than before.
Can a prototypical profile of a Latino entrepreneur be defined or is this spirit transversal to all social and cultural classes?
The Latin entrepreneur, and I would almost dare to say that it is the entrepreneur in emerging markets, is familiar with technology, is innovative, but has a high dose of frustration: he walks through the streets of the city or community in which he was born or works, He wants to stay where he is and improve it, but he sees immense challenges: people without access to basic financing, education, telemedicine, decent housing, sanitation, energy... And he undertakes to solve those challenges. There is no one better to provide a solution to a challenge than the one who suffers from it. I dare say that this - rather than imitating Silicon Valley or Israel - is the secret room of Latin American entrepreneurship: high doses of innovation, use of technology and frustration that becomes the engine of creation of these companies.
Can anyone who wants to start a business?
I wish that were the case...Because of what was said above, the conditions are still not equal for all countries, and within countries, for all provinces, states or departments, etc. Ironically, sometimes someone from another country discovers entrepreneurial talent in a country that does not have a developed ecosystem and that is not supporting its local entrepreneurs. There are some funds in Central America that can invest in Ecuador, for example, but there are few in Ecuador promoting the industry.
What role do women play in the Latin American entrepreneurial world?
I think I have seen in the last eight years an awakening of female STEM entrepreneurship. I never imagined that the intrapreneurship that I co-founded with who is now a fintech entrepreneur living in Germany, Monica Pina Alzugaray, while we were both at the Inter-American Development Bank, WeXchange, would become the catalyst for many other initiatives. local around this topic. Of the 59 investment rounds that passed in the first half of 2020, 24 have teams with women, which also indicates progress in the industry.
When we started there were very few funds in the region with women on their teams, even fewer with women partners; the exception was NXTP at the time. Today we are seeing great interest from many fund managers in incorporating women into the firm's leadership, or into the investment committee: DILA, ALLVP, Jaguar Ventures, 500Startups Mexico, Adobe, Angel Ventures, Inversor Colombia, Magma, Cometa, Aurus Chile, Nazca Ventures, Maya Ventures, EWA Capital, Más Equity, VOX Capital, SP Ventures, the list has grown exponentially!
The pandemic also showed the power of female entrepreneurship in sectors such as education (Arukay, Lab4u, Mujeres en Carrera); health (UNIMA, Delee, Calling the Doctor, Eolo-Pharma, Woom Fertility, SouSmile); fintech (Nubank, Kushki, Conekta, Afluenta, Akredito,IMIX, Creci); marketplaces, HR tech and proptech (MiVideoCV, Alquilando.com; Bricksave, Canasta Rosa, Go Trendier, LOFT, Solides), all startups with teams made up of men and women.
And in the global entrepreneurial world?
I believe that LATAM will lead more in the coming years on this issue than Silicon Valley, for example...Latin America is positioned as the region that will lead female entrepreneurship in the world.
What depends on whether an idea can become a successful and viable project?
That a team of entrepreneurs is formed that is capable of turning the idea into a startup, that does not fall in love with the solution they have thought of, but rather the problem that must be solved, that they have an understanding of the market and their competitors, and that they do not accept investors who ask for a lot of shareholding but only give money, but rather that they go for investors who give them “smart capital”: help with strategies, open doors, share best practices, in addition to monetary investment.
At what point does the pandemic affect the entire entrepreneurial process?
The most affected companies, apart from the tourism, hospitality and travel sector, were those that had not incorporated technology into their business model and those that were unable to pivot and digitize at the beginning of the pandemic. Startups that had closed investment rounds were not as affected because they had a runway of 12-18 months. Others saw their revenue drop to zero in a month, and if they did not have cash in their cash, their life was shortened by many months... the recovery was not even: here it was essential to have agile entrepreneurs with vision. The big break occurred in April and little by little, revenues have recovered and the entrepreneurial capital funds that had money began to reactivate, first investing and supporting the good companies already in their portfolios, and then looking at new investments in equipment that they already knew.
Raising funds has had a great impact on startups and funds that were beginning their fundraising process, or that are managers for the first time, since investors have to minimize risks.
Are they reversible changes or will these modifications end up installing a new scheme when starting out?
I think the fundamental thing is that companies that do not have technology at the core of their models will have fewer chances in the future, since technology has saved us not only on a business level but on a personal level as well. Companies focused on the “Nice to Have” sectors will also have fewer chances because COVID has focused us on the resilient sectors, the “Must Haves” such as those that provide access to essential basic services in a pandemic or will not become even more relevant. We also know that although COVID will at some point become less important (when we have the vaccine, etc.), other crises will come, and in general, this has been a call to get back to basics, with more restraint in spending at all levels For example, many companies have decided not to return to physical offices, before this was unthinkable...
What role do public companies play in this process?
Both public and private companies have to adapt to this new way of conducting business, and ally with startups to innovate their models.
And the private ones?
These times are very relevant especially for corporations and how they could benefit from working with startups, not only investing in them but adding value to them (connections, opening doors, etc.) while learning from startups how to be more innovative.
What advice can never be ignored when starting out?
Entrepreneurship is a path in which sometimes you feel alone, other times you go through many economic or market challenges, the important thing is that you understand what it means to undertake and that this becomes your daily motivation, “full-life”. And that you look for others with the same vision and commitment to achieve it, despite the difficulties.