Mexico has an Angel Investor Crisis, and this is a threat to everyone!

Mexico has an Angel Investor Crisis, and this is a threat to everyone!

I am Rob Ryan, I’m a 50-year-old entrepreneur from the United States. I founded my fourth startup recently to support the growth of entrepreneurship in LatAm. In the past 2 years, I’ve mentored more than 200 entrepreneurs from 60 countries and given more than 70 speeches and workshops.

Rob Ryan en la Semana Nacional del Emprendedor

I’ve lived in South America, now I am living in Mexico. I spend my days talking to leaders throughout the economy.

Recently I had the pleasure to work with a group of Angel Investor in Chihuahua (Foro Norte Chihuahua). My purpose was to deliver a “Wake Up Call” speech to local leaders. Here is my summary:

Mexico lacks enough Angel investors to support its economy

  1. There is a sustainable entrepreneurship economy taking form, but it is always at risk
  2. The number of active Angel investors in Mexico is dangerously low! The number of founders being created is not being kept pace by the number of angel investors investing in the birth stages of business
  3. Mexico is the #2 economy in the region, with 130 million people. Yet, many estimate that Mexico has “maybe” as few as 500 active angel investors…
  4. By comparison, most estimate that California has 10K plus angel investors!
  5. Mexico doesn’t need to be the “next Silicon Valley”, but it can support its own innovation growth.

Why is this a crisis for Mexico?

  • Projects & founders die prematurely. Angel investment is the first small step in funding new projects.

When there is not enough early capital, projects fail at a higher rate, entrepreneurs give up or can’t survive long enough to reach Venture Capital investors.

  • Brain Drain.  Talented entrepreneurs flee their cities and country seeking the capital that they need to grow, wherever they can find it.

In fleeing, their talent, their ideas, their new products and the economic impact of their companies leaves. Thus draining Mexico of vital economic creation!

  • Lost Business Opportunity for Mexican companies. When founders are forced to chase seed capital outside Mexico, traditional Mexican industries lose out on early access to these new inventions, new models, new products or services.

Established companies need this access to compete in today’s 21st-century economy. This hurts the entire economic development cycle.

How do we change this and what would a more active Mexico look like?

  • Leadership from the top. More business leaders and wealthy families must get off the sidelines and activate a portion of their discretionary assets, yearly, into Angel investment of scalable, high impact innovative entrepreneurship. 

If you’re an active angel now, make it your mission to recruit (10) new angels from your networks. If everyone did this, we could explode to 5K in 12 months.

  • Commit 10-15% of your discretionary assets into Angel investment, per year, for the next 10 years! 10% is simply smart diversification.
  • Make it a national priority goal to grow to 5K angels in next 2 years. In each of the 31 states, make it a mission to add 162 Angels per state in the next 24 months. We’d hit 5K.
  • Imagine what’s possible. Estimates say that the average Angel Investor in Mexico is worth $1 million USD. If we added 5K new angels that would activate $5 billion USD in total net worth.

If on average each angel activated (10% of their assets yearly) we would release $500 million USD in funding into the economy.

Finally, if these angels invested at the average rate of 10-12 projects, we’re talking about collectively funding 50K- 60K startups in Mexico!

I am tired of the “Mexico has great future potential” memes I hear every time I give a speech around the country these last two years.

I call bullshit… It is time, today, to activate the present potential that is sitting in Mexico’s bank accounts.

It’s time to get to work on Mexico, for Mexico, by Mexico… for the good of everyone!

 


By: Rob Ryan, Founder en GrowthHax

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