Are you aiming to finance your venture? Get to know 6 alternatives to do it
January 29 , 2019

​In the latest Global Entrepreneurship Monitor (GEM) report, Peru ranks first in the entrepreneurship spirit Index within Latin America.

Peru has an entrepreneurial spirit. This has been demonstrated by the latest Global Entrepreneurship Monitor (GEM) report, where we rank first in the entrepreneurship index within Latin America. This position explains our growth in this sector over the last years. Javier Salinas, director of Emprende UP, UP entrepreneurship and innovation center, points out that in the last five years, entrepreneurship in our country has grown by 45% since the regions with great potential need to be developed.
However, setting up a venture is not easy, it requires organization, time and above all funding. According to the same GEM report, 43% of Peruvians are willing to start a business in the next three years.

In this sense, Javier Salinas, director of Emprende UP, explains what types of funding there are in our country as well as which is the most suitable for you depending on the stage your venture is in: 

  • SEED CAPITAL.- Aimed directly at early stage entrepreneurs through programs that provide from 50 thousand soles, 150 and even 500 thousand soles. The State provides this support (through StartUp Peru) through the non-refundable resource modality, which allows the entrepreneur to incur expenses related to their venture that will allow them to finally go to the market and test their product or service. Beyond the amount given, being the program winner makes the ventures very visible, which makes customers, suppliers and investors want to contact them to learn about their proposal.
  • ANGEL INVESTORS.-Angel investors are those people with a surplus of capital that in an individual or participative way place their resources in companies in early stages of development and with a high potential for growth and risk. In addition to money, they also offer advice, experience and knowledge for entrepreneurs to achieve their goals.
  • CROWDFUNDING: This modality is just steps away from being available in our country through a crowdfunding law. It will allow entrepreneurs and micro entrepreneurs to have collective funding available today through the collection of smaller amounts that will be obtained from many investors through the purchase of Equity or their company's shares. Crowdfunding equity is a step prior to the network of angel investors, since it allows them to validate the interest of their market. Investors are going to have you on their radar if you have achieved a successful crowdfunding campaign. The law is expected before the end of the first semester. 2.jpg
  • CORPORATE INVESTMENT IN START-UPS OR CORPORATE VENTURE.- It arises from the need of a company to find innovative solutions in the market that will allow it to make a process or a product that has been made by an entrepreneur more efficient. This collaboration between startups and companies allows the latter to become shareholders of the venture. As an example, we have a Peruvian radio station and an online ticket sales company, who built synergies to do business related to the sponsorship of events, online ticket sales, etc.
  • NEGOTIATION OF THE ELECTRONIC INVOICE.- Factoring is a financing tool that allows companies to sell their invoices to a financial institution or Fintech so as to collect them instantly. If a company does not want to wait 30, 60 or up to 90 days to collect, it can do so immediately and improve its liquidity. This modality is not debt, it is not equity, nor loans, it is cashing the entrepreneurs' accounts receivable. This negotiation is completely formal and valid in our country.
  • RISK CAPITAL OR MICRO VENTURE CAPITAL.- It is an investment fund where startups or ventures are identified in the growth stage and are demanded certain parameters such as a minimum amount of sales and workers. This fund aims to invest money and be a shareholder, and then sell its stake. That is the fund's expectation: to sell its stake for a multiplied number of times. In our country it is not properly organized, but if there are private funds, they are small and are investing in a very limited way. This year, one or two Venture Capital funds are expected to serve entrepreneurs.

Finally, the funding landscape is complex for Peruvian entrepreneurs; however, it is important to learn about all the types that can be accessed. Crowdfunding equity is a modality that would provide a more far-reaching alternative for early stage enterprises. It advances at a safe pace and its prompt approval is expected before the end of the first semester.




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