The entire landscape of early stage funding is in a state of flux – new innovations in funding models are emerging to threaten the traditional status quo and the world has become a smaller place for those adventurous entrepreneurs willing to take a risk internationally.
An event held in London last week attracted a capacity audience of entrepreneurs keen to find out more about expanding their businesses internationally. The Going Global workshop looked at how the traditional barriers to setting up an international business have crumbled to the point where the micro-multinational can open a business on Monday and be trading worldwide by Wednesday.
But what really got me thinking was a message in my inbox a few days ago announcing that start-ups can now apply for $40,000 of seed capital.
Nothing unusual in that, but this offer was being made on Linkedin to entreprenurs interested in setting up a business in Chile. This offer could well suit those entrepreneurs with an adventurous spirit willing to spend at least 6 months in the country.
This wouldn’t be a bad thing, Chile has one of the best performing economies in Latin America and plenty of spectacular tourist attractions to explore when you’re not too busy! But let’s not get too excited by this latest gold rush for entrepreneurs.
The government in Chile has high ambitions to put the country on the global map by attracting entrepreneurs who can compete not only in Chile but also on a global stage. There is also the added bonus of being able to do business in English as well as Spanish which would have been a significant barrier to English speaking entrepreneurs in the past.
This new age of global co-operation has of course been opened up by the Internet and tools allowing businesses to communicate with their customers and build networks with each other wherever they are in the world.
But while the barriers of the past are crumbling, globalisation still presents challenges for business angels and start-up entrepreneurs to overcome. Attitudes particularly in the UK and Europe will need to change to take advantage of new opportunities abroad.
As we know 28% of angel investments in the UK are made within just 50km of home, so it would take a giant leap of faith for those angel investors to consider a business operating abroad. The reluctance of business angels to invest beyond national boundaries is firmly entrenched in Europe and it will take time for these attitudes to change. However, the emergence of crowdfunding will inevitably speed this process up by forcing traditional angel networks to look at global expansion.
One of the front runners in the globalisation of angel networks is Angels Den which currently has networks in Hong Kong and Singapore with ambitions to expand its operations further.
Despite the promise of offered by countries like Chile, challenges still exist for entrepreneurs too. These are unlikely to be the kind of challenges experienced by the Spanish conquistadores of the past, but even so, if you are an entrepreneur who wants to relocate abroad you will still need to get on a plane and get familiar with the local culture and make quality connections. This will inevitably be harder than it would be on home soil, so a new venture in Latin America will need to be carefully considered.
There will still be language barriers despite 80% of online trade being conducted in just nine languages. So as a business owner you will need to accommodate other languages to maximise your chances of success. By the same token if you are a business angel or a business angel network looking to invest in businesses abroad, experience of other languages and cultures will become an increasingly important consideration as globalisation gathers pace.
Tags: adventurous entrepreneurs, Angel investors, angel network, Angels Den, Business Angel, business angels, Early stage funding, English speaking entrepreneurs, entrepreneurs, Going Global workshop, start-ups