Gregory Clark is Managing Partner of Co.Vida a corporate social responsibility consulting and cause marketing firm in Panama. Greg began his journey to entrepreneurship through working in international development but when Panama’s official status was changed to middle income country and many of the international development organizations from abroad began to pull out of the country, Greg saw a gap that needed to be filled and became an entrepreneur.
“I saw this kind of niche, this hole in the market, this gap in the market,” he told me, “and I said, ‘how I can I fill that?'”
So he teamed up with two Panamanian business partners and created his online platform for cause-based projects and project financing.
Interestingly enough, since he tries to connect the dots for cause-based project financing, his biggest challenge as an entrepreneur in Panama so far has been trying to attract outside investment. According to Greg, small financing is tough to find. You have to be working on a project that needs $500k plus or you have to bring the money yourself. He says,
“[In Panama], you can easily launch something as long as you’re bringing all of the money with you,”
but if you need outside investment for your idea it’s very tough to find. “There are a lot of new organizations within Panama for startups and entrepreneurs…and it’s all about trying to create this entrepreneurial environment here in Panama but, at the same time, they don’t offer any real services to help push it forward.”
At the end of the day, Greg says, Panamanian business runs on who you know. As Greg sees it,
“Everybody knows everybody and networking is really the only thing that gets anything done in this country. The Panamanian networks are very strong and it’s all based on nepotism. At the end of the day if you’re not somebody’s cousin or have somebody’s cousin on your team, you’re not going to get the deal.”
This is especially true, he says, if your innovation is going to cause problems for an already established business whose owners are connected. “If you’re going to be a threat to an already existing company and you’re not tied into a strong network system, they will shut you down before you even open,” he says.
Another challenge that he’s discovered and that he’s heard other entrepreneurs complain about is collections. “Nobody pays their bills on time here,” he says, which can destroy a startup’s cash flow and put it in a precarious situation.
So, given all of these hurdles why does Greg think entrepreneurs are attracted to Panama? He has a few reasons. For one thing, Panama operates on a solid, pegged currency (they use USD) so expats from the United States don’t need to worry about currency fluctuations affecting their investments. He also sees the laws as pretty favorable to aspiring entrepreneurs.
“To start your own company here is literally just the swipe of a pen,” he says. “It takes next to nothing.”
Perhaps more importantly though, Greg thinks that many people see Panama as a land of opportunity. “Especially for expats coming down as entrepreneurs,” he says, “they see what there isn’t. They’re looking at all of the holes and instead of being more pessimistic…they’re coming down and seeing the opportunity. They’re saying, ‘Wow, they don’t have this. I can do that…This sucks, oh I can improve it.” Additionally, “the infrastructure’s already so much in place where it seems like a little America, a little Miami and Panama City is the safest capital city in all of Latin America.” Given that,
“[Panama] seems really enticing because…the sense of you personally can make a difference is really strong. So many people consider it this developing country still and you want to be on the verge, you want to be in the boom. You want to be able to say, ‘I was in the boom, I was in before the rest of the world was.'”