2014: A New Era for Startups Beginning?
Ever since the recession, tech startups, in particular Latino tech startups, have faced difficulties with finding funding, networking with venture capital and simply getting their idea out into the market place, with less than 1 percent of venture-backed startups founded by Latinos.
But that difficult climate is about to change for the better, according to Forbes contributor and entrepreneurship expert Martin Zwilling, who recently said that a "new era for entrepreneurs and startups has begun."
Where does this optimism spring from? What are some of the positive indicators he cites? From rising IPO numbers and startup incubators establishing themselves all across the market, to an ever-diminishing cost of entry, many factors are improving the outlook for startups in general, and Latino startups in particular.
For one, startups are being assigned the kind of value by the marketplace that the dot.com bust tempered for so many years. An increasingly large number of startups in recent history are now valued at $1 billion or more, says Zwilling, citing a New York Times report that found at least 25 tech startups whose value has climbed in just a few years to mega-business status.
As a corollary to that encouraging news, the number of companies that went public with an Initial Public Offering (IPO) and made out with millions has hit a record for 2013: 156 companies last year made a net of $38 billion from their IPOs, which is a 65 percent increase over the past year.
On top of that, access to the market place in the form of app development costs or purchasing and running a website are at an all-time low, and continue to drop. Social media services also provide a platform to get a startup's idea out into the community, receive feedback, and build a brand -- all for free. And startup incubators and accelerators provide even more access in the form of networking, competition, and presentations to the companies that really matter, if you want to get your idea off the ground.
For example, in late November of 2013, a specifically Latino-focused tech startup incubator called Manos Accelerator held a Demo Day for seven Latino startups. Manos, backed by technology experts, business leaders, and Jennifer Lopez's father, held that seven-startup Demo Day in, of all places, Google's Googleplex -- easily one of the core central nervous systems of the tech world.
Networking and demonstrations are all for nothing if no one is willing to invest. But according to Zwilling, venture capital is loosening the purse strings again, funding about 1,500 startups in 2013, with Angel investors backing about 50,000 more. But those numbers of funded projects still pale in comparison with the number of pitches these firms and individuals get, so Zwilling offers the term "glocalization" as a strategy for startups still in the incubation phase. What does that term mean? Think about global problems that also exist within the local community, and work on successfully addressing it on the local level first.
Luckily Latino startups often begin on the community level, often offering more service-based functions like legal, financial, educational, and immigration services. In this case, Latino startups have the upper hand in 2014, often being able to contribute to the community while honing their startup at the same time.
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