I met with Daniel Marcos of Creditos123.com who provides financing to Hispanic customers. He now has a new project – applying venture funding to startup companies serving Mexican customers living in the US or in Mexico. He has experience having built an angel fund in 2000 and made eight investments. One of them has multiplied its sales by over 15 times in its 7 years of investment.
Daniel’s current fund is matched by the Mexican development bank at 35%. He has over $3M in the fund so far and it continues to grow. They are seeking a name for the group that will work in both the US and the Mexico market.
From the first one in the late 1990s to about 20 funds countrywide today, the number of venture funds in Mexico is growing. The other impact on the venture fund situation is the creation of the “AFORES” which is similar to a 401K program. There is now over $70B invested in the AFORES throughout Mexico. Soon, the managers of these funds will be allowed to invest some % of those funds into venture funds.
Angel funding in Mexico is not very large yet. There are two ways companies are started: large companies start small, stand alone businesses, or individual families start them. The Young Entrepreneurs Organization (YEO) has three chapters in Mexico. Most of the entrepreneurs in it are self-funded.