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Opinions are described Entrepreneur their contributors.
Launch economy appreciated almost $ 3 trillion worldwide in 2019. Although it is too early to determine where the estimates will fit in 2020, the figures are likely to look very different. The global economy suffers, and experts predict: decline that will have a lasting impact in all areas. In past recessions the overall decline in venture capital has been approx 25 percent an average of 12 months, which would mean a loss in today’s economic environment of $ 86.4 billion. In the first two months of this year venture capital In China alone, deals have shrunk more than 50 percent, suggesting that the effects of this recession may be even greater in the world.
The timing of the infection varies by region, and life in many countries is recovering to some degree of normalcy. However, in Latin America, the rate of infection continues to rise. For entrepreneurs in new markets as in Latin America, the steady increase in cases and the subsequent economic impact create difficult conditions, and they seek strategy and support by adapting to the “new normal”. Here’s a look at how construction companies can help.
A brief overview of Latin American countries Launch ecosystem
This year in Latin America the startup scene exploded. In just three years, investment in Latin American startups has grown almost tenfold: from $ 500 million in 2016 to $ 4.6 billion last year. Part of the record growth was due to the new one $ 5 billion Softbank Innovation Fund, which focuses exclusively on the Latin American market. However, even without Softbank’s contribution to the region in 2019, there was a record increase in funding.
Unfortunately, it will take a long time for startups to suffer economic downtime. Between the 4th quarter of 2019 and the 1st quarter of 2020, the number of laser transactions performed in Latin America decreased by 60 percent. As the spread of the contagion continues across the region, it is difficult to meet short-term opportunities such as injecting cash from investors and launch accelerators. Instead, entrepreneurs should consider alternatives such as working with company builders for long-term support and financing.
How builders of companies create long-term value
Company builders, also known as “venture studios”, brings together talents, investors and experienced entrepreneurs to simultaneously create many ideas. Their approach combines the stability of an established company with the creativity and innovation of individual startups, the development of ideas through a rigorous process, and then the creation of the most successful independent companies.
This facilitates the registration of new businesses
A new one is being created in many Latin American countries business complex, often requires extensive paperwork and numerous meetings to meet all legal requirements. And while some countries are starting to lift their restrictions, most there are still mandates for asylum at home. These restrictions further complicate the process of legal registration of a new company, especially for start-ups. Builders of companies that work with many startup ideas simultaneously are familiar with the necessary bureaucratic processes and can help navigate their repetitive processes and their business branding. In addition, they can draw on industry experience and existing infrastructure to help stabilize and launch new businesses.
Building investor confidence
Most of the company’s builders have also established relationships with people who can help navigate local legal requirements. However, legally creating a new company does not cost much if the business is unable to finance its activities. Investors in Latin America are known to be risk-averse, making it difficult for startups with innovative fundraising ideas. In times of crisis, this tendency to follow the tried and tested only intensifies, leaving companies with less access to finance when they need it most.
Developer companies help increase startup funding opportunities as they reduce perceived risk to investors. The builder model is designed to build successful companies using a structured process to generate and validate ideas that build on past efforts. As part of a company builder, entrepreneurs work on several startup ideas and test them before looking for funding outside. In addition, many startups held in construction companies are led by experienced entrepreneurs who have created successful businesses in the past, which can be an encouraging indicator of success for prudent investors.
Increase partner startups / corporations
In addition to bringing together experienced entrepreneurs, company builders are often partners with industry experts and large corporations. These partnerships are mutually beneficial. Corporations can keep up with the latest technology by working with startups, and startup founders are gaining access to industry, new market opportunities, and sometimes funding.
By involving more established corporations in the process of developing start-up ideas, construction companies create opportunities with less risk for regional corporate investors. Currently only 16 percent Latin America’s largest companies partner startups and more 80 percent these collaborations are short-term opportunities like a hackathon.
In today’s climate, larger and more established companies have realized the importance of moving their online operations to survive in the new remote work environment. Creating stable and sustainable partnerships can help attract large businesses to the digital realm in both the short and long term. In addition to modernizing traditional business approaches through technology, company builders can share their experiences and teach corporations how to be agile, innovative and flexible in responding to new challenges.
Closure measures around the world have revealed serious shortcomings in important systems in emerging markets, highlighting health deficits, global weak supply chains and a limited financial security network. These deep-seated challenges will only be addressed through innovative approaches aimed at creating destructive, sustainable change. Through long-term approaches to value creation, company builders create the perfect environment to achieve these changes.