Identifying opportunities, seeking investment, and receiving support from both private industry and government can help entrepreneurs to survive the crisis.
Protecting new companies and startups, improving the innovative capacity of new businesses, and accelerating economic and social reconstruction to overcome the crisis caused by the new coronavirus pandemic are some of the recommendations suggested by the Inter-American Development Bank (IDB).
According to a survey carried out by the organization, the impact on young entrepreneurs and companies is huge. Half of those surveyed who had not yet started their business halted the process of doing so, 53% of those who were already selling stopped, and eight out of ten businesses in the region indicated that they were being affected by the crisis.
Although responses from organizations that support the entrepreneurial ecosystem have been slow in coming, governments must see startups as a key aspect of economic recovery in Latin America.
Bogotá ranks second in the region for intention of foreign investment in startups, with a total of more than $1.76 billion dollars during the period from 2008 to 2018, surpassed only by São Paulo. According to Juan Gabriel Pérez, director of the Invest in Bogotá promotion agency, the support of governmental institutions has been very important in benefiting the system and allowing Colombian businesses to have significant visibility.
“This is a city in which there are more than 30 startups that have already received more than one million dollars in investment from both local and international stakeholders. I believe that the pandemic is rapidly energizing many of these startups,” Pérez said.
However, the executive acknowledged that the role of governments and private industry will be key to the survival of startups during this crisis.
“Governments must see entrepreneurs as great allies, and as the future of the country’s business class, because they will generate wealth and jobs. They should help startups have a normal growth process supported by tools provided by both the public and private sectors,” he added.
Guillermo Elizondo, CEO and founder of Territorium, believes that the pandemic has taught many startups to increase the speed at which they can have new products available to launch, and to orient them more towards short term needs, as well as identifying where there are more opportunities.
Miguel Silva, product manager of the startup Frubana, believes that it is the responsibility of entrepreneurs to seek local and foreign investment to bring benefits to the region’s ecosystem.
For Julián Melo, CEO and founder of Ubits, the greatest challenge for entrepreneurs is to overcome the lack of preparation in the region when looking for investment in places like Silicon Valley.
“We have to sell ourselves as a region and prepare to compete as global entrepreneurs. Silicon Valley invests in companies around the world, and entrepreneurs must understand how the world of investment works. I think that there is a lack of preparation for this in Latin American entrepreneurs”, said Melo.