This week’s Startup Nomad interview is with Angela Cois, the COO and Cofounder of LastRoom. She’s an Italian who relocated to Mexico many years ago and has been involved in the startup community practically since it began to grow in Mexico. The idea for her company was actually born during a Startup Weekend back in 2010.
Like many of the other people I spoke to in Latin America, Angela says that a lack of capital is really holding the ecosystem back.
“It’s a big problem,” she told me. “There is money but it’s difficult to catch the interest of an investor. There are plenty of traditional investors…but e-commerce or digital tech companies are quite far from their knowledge or perception and they see it as a very high risk investment.”
In her opinion, this is especially true in the so-called ‘valley of death,’ the time between a startup company’s initial seed funding and when it can generate enough revenue to sustain itself. Here in Mexico, specifically, she noted that accelerator programs and other seed funds have helped improve access to the very initial seed money needed to create a minimum viable product and launch; between this initial investment and the time that the company is generating revenue and needs growth capital of $1 million dollars or more, however, there are almost no options for funding, “unless you know people.”
“It’s a pity that very good projects just die because they run out of money,” she said.
She thinks that aversion to earlier stage investments in tech companies can and will change, however.
“It’s a culture,” she said. “It’s a culture that is gradually growing the last few years thanks to events and to a lot of initiatives that people are doing to promote the ecosystem, but this kind of sensibility or culture is not so strong here [yet].”
She believes that the cultural change and the growth in access to capital must come from the people on the ground in the entrepreneurial ecosystem here, not from government initiatives.
“It’s a matter of entrepreneurs, of people,” she told me.”And of investors; because without money you can’t keep on trying. You could have the best business model but if you don’t have money you can try for 3 months or 6 months and then you have to stop, you have to give up…
…I think that this organic growth can come from both sides:,” she continued. “From entrepreneurs and investors. We have to learn, both sides, we have to learn a lot.”
Along those same lines, Angela expressed another common sentiment among the Latin American entrepreneurs with whom I’ve spoken: that the ecosystem needs to see local role models in order to reach its full potential.
“We need to learn a lot because we don’t have great role models here,” she said. “We are the first doing this. It’s not the same as Silicon Valley.”
So what is Angela’s advice to aspiring entrepreneurs?
“Start your own business when you have personal savings [to fund it] and when you’re more mature in how you utilize your personal resources” she said. “It makes you more serious if you’re trying to figure out the best way to spend your money, focusing only on your priorities and on your core business, and this is very important because it makes you more concentrated. It’s a great thing for entrepreneurs.”