In less than a year, normal life has been drastically altered, with the COVID-19 pandemic already making a lasting cultural impact on humankind. For the commercial world, radical changes to the way business should be conducted have come at a startling pace. Yet profound change also brings great opportunity, with many of Latin America’s venture builders poised to lead the region’s recovery charge.
When much of the globe went into lockdown during March and April 2020, it halted international, national, and even regional business efforts. Investors, business owners, employees, and governments were left reeling from squeezed incomes and deep uncertainty about the future.
Yet, as the world increasingly adapts to the situation, and efforts to develop a vaccine show cause for encouragement, even despite the great difficulties faced in many countries and ongoing level of uncertainty, experts and individuals are feeling confident. In a recent poll conducted by Biz Latin Hub of executives and business leaders in Latin America, 93 percent of respondents reported that they expected to begin hiring soon.
That chimes with the eye-catching levels of optimism shown in Latin America by a recent McKinsey Global survey, with nearly 50 percent of respondents from the region expressing confidence that economic conditions in their home country would improve over the coming six months.
That represented a noteworthy increase in the optimism expressed in the region for the same survey two months earlier. It also highlights Latin America’s comparatively high levels of optimism, with only 37 percent of respondents in Europe expressing similar confidence for the future.
A major component of the positive outlook on the future economy of Latin America is the rise in venture builders. The region’s startup economy is thriving thanks to their innovations, not only in tech, but also in the business models they employ.
Venture builders are companies dedicated to building up startups. They are distinct from startup incubators due to the fact they have all of the resources, capital, and means to launch new companies independently, and generate their business ideas internally, meaning they are not beholden to demands of outsiders.
With venture builders in the region already helping to lead the way to a more prosperous economic future, and now contributing significantly to pandemic recovery efforts, Latin America’s business community has much to be optimistic about.
But to appreciate what venture builders are doing in Latin America today, it’s necessary to consider how they emerged in the first place, and the distinct benefits they bring.
Part of the reason confidence levels for Latin America’s economic future increased among respondents is the rapid growth of the region’s startup economy. In 2019 alone, startups raised nearly $5 billion in investment funding regionwide. Perhaps more significantly, startups secured reliable financial partnerships with major international firms like SoftBank.
The Japanese giant has dedicated $5 billion to startup development in Latin America, with $1 billion already distributed to the Colombian delivery startup Rappi. Further funds are slated to be distributed in late 2020 and early 2021.
With an array of investment and market opportunities, Latin America’s startup system has been able to grow at breakneck speed, with record levels of startup and investment activity seen in recent years. This growth has unquestionably been amplified by an explosion of tech innovation, with some of Latin America’s fastest-growing sectors including financial technology (FinTech), software development, e-commerce, and online education.
Venture builders offer distinct benefits to both investors and the region or country in which they are operating. While, as they have become more prevalent, Latin American governments have come to better understand these advantages and gains.
Much of the future of economic activity and prosperity will come through the strategies and businesses developed by venture builders. As they continue to grow, these benefits and advantages will become ever more apparent and impactful.
One major key to venture builders is that they are sustainable and viable operations. Because all operations, resources, and management are internal, this makes the startup growing process uniform and seamless. Essentially, the elimination of middleman, secondary parties, and other obstacles facilitates a more efficient workflow.
Beyond efficiency, venture builders are sustainable because they operate as their own internal support system. Each venture that the company takes on is run by the same team from the same resources. This creates a synergy across venture operations, which inspires confidence, creativity, innovative problem solving, and support.
The sustainability of the firm lives and breathes in this internal synergy born through the venture builder’s day-to-day operations. If one operation starts to suffer or hits a roadblock, the strength and resources of the others are there to provide commercial support and lift it back up.
In a region previously associated with volatility and inconsistency, this characteristic of venture builders is extremely attractive.
For some time, Latin America was characterised by uncertainty, eliciting hesitation and reluctance from investors. However, that image is changing, with Latin America an increasingly popular investment destination, and investors increasingly aware of the opportunities on offer.
Venture builders have helped create a sense of economic stability and steadiness, in a region once associated with political instability and safety concerns. Latin America desperately needed something to rewrite its commercial narrative, and the region’s startups have duly delivered.
Another major benefit of venture builders in Latin America is that they offer steady growth. Since business operations within a venture builder are conducted under one parent company, the growth and success of each venture thrives off of its counterparts. As a venture builder adds more viable enterprises to its portfolio, the collective opportunities for success across the portfolio are further compounded.
As individual ventures find success, they begin to grow as individuals. Thus, inspiring the overall growth and success of the venture builder as a whole. Once the venture builder feels confident enough in the progress of its portfolio, it will pursue another venture, meaning the company has access to steady, reliable growth. A cycle of success forms, growing further with each new venture that reaches sustainability, and contributes to the longevity of the business.
A mark of the success seen among venture builders in Latin America is the level of investment they have attracted, which has doubled year-over-year since 2016. Guaranteed, steady growth among venture builders should continue to have a positive impact on regional commerce in the future.
Venture builders are unique because they operate and run multiple business endeavors through a singular parent company. Each subsequent business uses the same resources and capital, and often even the same teams, providing a level of operational security many startups do not enjoy.
This is good for both the venture builder and investors, because access to resources and human capital will never be in question for any individual ventures. A single venture is not responsible for acquiring its own tools or teams, instead relying on the means and assets of the parent company.
This benefit is particularly attractive to investors because of the investment confidence it can provide. Typically, investing within the startup sector means navigating significant uncertainty and risk, especially when built on a model reliant on future funding rounds.
Venture builders wash away these worries by backing each venture they open with support, guidance, funds, and brain power. Investors pursuing deals with venture builders in Latin America rarely have to call into question the reliability of the operational supply chain.
Since venture builders have an impressive portfolio of operations, marketing becomes a much more feasible endeavor. As with other resources and human capital, individual ventures can drive each other’s successes within integrated and multi-channel marketing approaches.
Multi-channel marketing generally relates to targeting and reaching an audience through a variety of mediums. However, in the case of venture builders, another element of integration is added by the fact that distinct ventures under the same parent company can contribute to bolstering and amplifying the marketing efforts of others.
Another key element of multi-channel marketing is the publication of content on unrelated platforms, known as guest posting.
Guest posting is an incredibly effective tool because it allows the organization or individual responsible for the post to reach a greater audience and build brand awareness, while providing an alternative platform for the guest post producer to engage in the public conversation about their field, and as such demonstrate their specialist knowledge.
Guest posting also allows the venture builder or its individual ventures to establish working relationships with other organizations in their field, thus building the company profile within the business community. Through effective inbound and outbound linking within guest posts, the author is able to drive traffic towards their own operations, further amplifying brand awareness.
Investor confidence, like sustainability and growth, is a key indicator of success. Previously, investor confidence was not something commonly associated with Latin America. However, the emergence of successful venture builders and the growth of the startup ecosystem have inspired a surge of investor confidence and interest in the region.
Venture builders inspire investor confidence thanks to the combined effects of the aforementioned advantages. In Latin America, venture builders can count on an array of strengths and opportunities, which investors are becoming increasingly aware of. While, as venture building grows, so too does interest among prominent investors.
Ultimately, venture builders backed by confident investors will be a major driving force not only in Latin America’s post-pandemic recovery, but in a brighter and more lucrative future overall.