Today I’m talking with Marco Giberti, President of Reed Exhibitions Latin America. In addition to his role at Reed, Marco is also a well-known investor in startup companies in Latin America as well as being an entrepreneur himself. He is also on the advisory board of the Americas Venture Capital Conference, which will be held in Miami in December. I talked with him about his perceptions of the startup ecosystem in Latin America from an angel investor’s perspective.
LASB: Many people have observed that the volume of startup companies being created in Latin America has increased markedly in the last year or two. Do you agree with this view? If so, to what would you attribute this growth?
MG: Yes, i agree and my personal opinion is the fact that Latin American accelerators like NXTP, 21212, Wayra and others are helping entrepreneurs in many countries to launch their companies and linking them with local mentors, angel investors, etc.
The overall entrepreneurial ecosystem is improving in Latin America, and it’s great news like this that is giving courage to new entrepreneurs to launching their own initiatives.
LASB: What differences, if any, have you noted between, say, startups in Latin America and those in Silicon Valley?
MG: Huge differences. I have the theory that there is only one Silicon Valley, and trying to clone this model in any other place is simply a waste of time and energy. I strongly believe in creating local startup communities based on local needs and opportunities, not trying to clone the valley model in other places.
The real world for startups in Sao Paulo or Ciudad de México is completely different. We need to understand these realities and help those entrepreneurs in a different way.
MG: I particularly like sectors like new media, leadgen, and education based on my own background and experience and I see tremendous growth opportunities in Latin America in these sectors. I also think that healthcare and marketplaces will have very interesting opportunities in the region.
LASB: What is the hardest thing about doing business in Latin America? Are there certain things that are notably harder in one country vs another? What pitfalls should investors look out for?
MG: Each country in LatAm is different, and talking about difficulties and opportunities in the overall region is probably not the right approach. We should talk about Brazil as whole and probably Mexico and after that the rest of the region.
Dealing with complicated tax and labor laws is obviously a main challenge in the region. If your startup is starting to generate traction and needs to attract talent is also a growing concern.
I think that a good investor should help the entrepreneur to grow his company, rollout the business into new geographies and scale the management team. I believe that a good entrepreneur will leverage the investor knowledge (particularly when the investor is an entrepreneur who has the experience), and be able to take some great short cuts based on good communication with the investor and board.
LASB: You’ve invested in companies, e.g. Fnbox and Idea.me, that are physically located far from your “home base.” How do you manage the challenge of investing in a company that is far away? And do you believe that American investors are getting more comfortable with the notion of tele-investing?
MG: I invest in people that I trust and I know regardless their physical location. I feel comfortable co-investing with brilliant and respected entrepreneurs and investors that complement each other and are able to build amazing teams.
If the company is near home it’s a bonus, but I will always consider investing in great teams even if they are away from home.
I usually learn more from the entrepreneurs. There is a clear advantage on being able to meet face-to-face on a regular basis and more value added when we are able to work as a team, but Miami is a great meeting ground for Latin American entrepreneurs. It’s a natural destination for many of them and always a great place to visit and spend some time. There is a fantastic growing entrepreneurial community in Miami with great mentors, investors and entrepreneurs. I’m confident that I will be able to interact with more local teams, leveraging the many opportunities for American startups looking to expand to Latin America as well as Latin American entrepreneurs looking to rollout into the US and US Hispanic markets. I see Miami as the perfect gateway to capitalize and help on these opportunities.