Angel investment in Latin American startups
Posted: Sun Dec 22, 2024 5:36 am
In a survey I recently conducted on my LinkedIn, only 24% of entrepreneurs in Latin America manage to obtain angel investment. During 2023, total angel investments reached $530.46 million , a notable decrease, according to latamrepublic.com . In contrast, the United States has 20 times more active angel investors and an average annual investment 16 times higher , as we discussed in our article on angel investment .
Concern about failure has become a growing impediment for entrepreneurs in the region. 54% of them do not launch their startups, despite feeling ready. This percentage has increased by 80% in the last decade, reflecting an alarming trend that impacts innovation and economic development.
Fear of failure has a significant impact on female entrepreneurs. 63% of them choose not to start a business for this reason, compared to 44% of men. This situation underlines the urgency of overcoming gender barriers in the field of entrepreneurship, in order to foster a more fair and equitable ecosystem.
Alarming statistics on angel investing
During 2023, 742 financing rounds were carried out in Latin America, with an average deal size of around $1 million . This figure is worrying, as it reflects a drop compared to previous periods. According to La República , italy whatsapp code funds allocated US$4 billion to venture capital in the region, indicating an adverse trend in investment by angel investors.
The lack of financing has a direct impact on the entrepreneurial ecosystem . The reduction in resources affects the creativity and progress of new companies, which leads to the loss of innovative proposals. As mentioned in our article on the entrepreneurial ecosystem , this reality limits the opportunity to activate our local economies and hinders the emergence of new alternatives that could be very useful for society.
Comparison with the United States: An abyss in investment
In 2021, venture capital accounted for 54% of total private equity investment in the US, according to lavca.org . This figure stands out greatly compared to the reality in Latin America, where angel investors are scarce. The disparity in the number of funders and the capital available is considerable. This highlights the pressing need for better access to financing in the region.
The investment gap has serious consequences for Latin American startups. Without the required capital, their competitiveness in the global market is affected. Emerging companies have difficulty innovating and growing. Attracting more angel investors is essential to close this funding gap. Only in this way can a more solid and active entrepreneurial environment be promoted in Latin America.
Concern about failure has become a growing impediment for entrepreneurs in the region. 54% of them do not launch their startups, despite feeling ready. This percentage has increased by 80% in the last decade, reflecting an alarming trend that impacts innovation and economic development.
Fear of failure has a significant impact on female entrepreneurs. 63% of them choose not to start a business for this reason, compared to 44% of men. This situation underlines the urgency of overcoming gender barriers in the field of entrepreneurship, in order to foster a more fair and equitable ecosystem.
Alarming statistics on angel investing
During 2023, 742 financing rounds were carried out in Latin America, with an average deal size of around $1 million . This figure is worrying, as it reflects a drop compared to previous periods. According to La República , italy whatsapp code funds allocated US$4 billion to venture capital in the region, indicating an adverse trend in investment by angel investors.
The lack of financing has a direct impact on the entrepreneurial ecosystem . The reduction in resources affects the creativity and progress of new companies, which leads to the loss of innovative proposals. As mentioned in our article on the entrepreneurial ecosystem , this reality limits the opportunity to activate our local economies and hinders the emergence of new alternatives that could be very useful for society.
Comparison with the United States: An abyss in investment
In 2021, venture capital accounted for 54% of total private equity investment in the US, according to lavca.org . This figure stands out greatly compared to the reality in Latin America, where angel investors are scarce. The disparity in the number of funders and the capital available is considerable. This highlights the pressing need for better access to financing in the region.
The investment gap has serious consequences for Latin American startups. Without the required capital, their competitiveness in the global market is affected. Emerging companies have difficulty innovating and growing. Attracting more angel investors is essential to close this funding gap. Only in this way can a more solid and active entrepreneurial environment be promoted in Latin America.