Guest Articles

January 30

Eugenia Di Marco

Should I Stay or Should I Go?: Why Latin American Entrepreneurs Should Stay in the Region — And How Corporate Venturing Can Power Their Growth

Latin America is a region of paradoxes. We are renowned as some of the happiest people on the planet, with a pleasant climate, ample natural resources and a rich, diverse cultural heritage. Yet nevertheless, many young Latinos, including numerous budding entrepreneurs, are departing their native lands. A prime example is one of my closest friends, who left Argentina to pursue his entrepreneurial journey in the United States. His perspective is that Argentina offers little hope for aspiring entrepreneurs.

This raises several important questions: Why are Latin entrepreneurs emigrating from their home countries? Should they stay? Which stakeholders can help change this paradigm, and how? How has the economic turbulence the world has faced these past years impacted this trend?

Let’s break down these questions.


The Challenges Facing Entrepreneurs in Latin America

I am an international legal advisor collaborating with UC Berkeley’s entrepreneurial hub within the School of Law, actively involved in cutting-edge programs like SkyDeck, a Sequoia Capital-backed accelerator in California. I am also part of a Miami-based firm focused on empowering startup founders from Latin America and Europe looking to enter the U.S. market.

Many of the entrepreneurs I am helping on these ongoing projects have a tough choice: stay in their home countries, with their families and their community, or move away. When I ask those who’ve relocated to the U.S. why they decided to leave behind almost everything they had, it boiled down to six factors: institutional voids (i.e., gaps or deficiencies in formal institutions, such as the legal, regulatory or financial systems, in their country or region); complex bureaucratic processes; high taxation rates; a troubling deficiency in entrepreneurial education within higher institutions, leaving students unprepared to take risks and tackle problems with an entrepreneurial mindset; hyperinflation; and blatant corruption. For instance, at least 11 current and former Latin American presidents have faced forced exits, imprisonment or corruption investigations in recent decades. Additionally, in 2023, Argentina saw inflation reach a 32-year high, hitting over 124% in August, while Brazil’s credit card interest rates climbed to 450% (a six-year high). Due in part to these challenges, along with the scarcity of resources, 75% of startups in Latin America fail after no more than two years of activity. Clearly, these entrepreneurs have valid reasons to depart from home.

However, staying is not always the wrong choice. Adversity often serves as a catalyst for resilience and new creations, and entrepreneurs are by nature powerful souls who are passionate about taking risks, defined by their innovation and creativity. All the challenges mentioned above can serve to make the Latino entrepreneurial spirit even greater. And in the end, overcoming them is not always as difficult as it seems.

That’s why I advocate that these local entrepreneurs refrain from fleeing. Latin America offers several attractive pathways to support that can assist them in maximizing their potential, particularly in their initial stages. All it takes is a little push from some key stakeholders to take their business to the next level. But who can provide this aid?

Below, I’ll discuss one promising source of support that’s making an impact in the region by enabling corporations to help build Latin America’s entrepreneurial ecosystem: corporate venturing.


The Emergence of Corporate Venturing in Latin America

Corporate venturing has emerged as a beacon of hope for Latino founders. The practice entails proactive corporate engagement in supporting external innovation, particularly among startups, through investments and strategic initiatives like incubator programs or open innovation platforms. This approach fosters collaboration between these businesses, establishing a win-win relationship in which the weaknesses of each partner are counterbalanced by the strengths of the other. For instance, startups possess the agility to swiftly adjust strategies in a dynamic market, while corporations have the financial stability to ensure the scalable implementation of these strategies. This enables startups to inject innovation into a corporation’s portfolio, and when they lack funds, their corporate partner can provide them with crucial financial support.

The practice offers many benefits for Latin American entrepreneurs. The MIT Technology Review’s report (in Spanish) on corporate venture capital in Latin America highlights the untapped potential it can have in the region, despite challenges in translating intent into action on the corporate side. These challenges are rooted in internal factors like bureaucratic hurdles, traditional methodologies and a limited capacity to adapt to changes, as well as external factors such as the absence of a technological regulatory framework, and economic disparities among regional countries. But in spite of these issues, major corporations in in Chile, Colombia, Mexico and Peru are keenly interested in investing in tech ventures — providing a variety of potential funding opportunities to startups in these countries.

However, corporate venturing activism goes beyond monetary investment. It also encompasses valuable elements like knowledge exchange, mentorship and infrastructural support, including guidance on establishing effective operational processes, setting up efficient systems and optimizing overall business operations. Moreover, it opens avenues for startups to access global markets, leveraging corporations’ existing distribution channels or tapping into their global presence for market expansion. Additionally, corporate partners can play a pivotal role in aiding startups in regulatory navigation and offering crucial resources for research and development.

And it doesn’t stop there: Corporate ventures are not just about shared knowledge, but shared passion, dreams and victories. They open doors to a world of connections and networking events, where startups mingle with industry luminaries, potential clients and investors, forging collaborations that were once beyond their reach. These ventures are gateways to new resources, research facilities that spark innovation, and funding opportunities that breathe life into visionary projects. They can result in a vibrant ecosystem where startups are guided and propelled toward success, and where corporations share their industry wisdom, unraveling the complexities of markets and regulations, steering startups away from pitfalls, and illuminating the path to growth.


How Corporations Benefit from Corporate Venturing

Corporations also benefit from this venturing in several ways. First, it helps them stay competitive by providing access to the cutting-edge technologies and innovative ideas generated by startups, ensuring their relevance in a rapidly changing market. For instance, Mercado Libre, headquartered in Uruguay and often called the “Amazon of Latin America,” expanded its services beyond e-commerce by venturing into digital banking. The company’s financial branch Mercado Pago invested in an Argentinean fintech startup called Mango (which it ended up acquiring), in order to integrate cutting-edge financial services into its platform. By doing so, Mercado Libre ensured that its online marketplace not only offers products, but also provides users with innovative financial solutions. This move has allowed the company to stay competitive by evolving its platform into a one-stop shop for e-commerce and digital banking services, meeting the diverse needs of its customers in Latin America.

Second, corporate venturing offers opportunities for external growth by enabling corporations to explore new markets, expand their products and diversify their revenue streams. For example, Coca-Cola invested in AdeS, a Latin American plant-based beverage startup, to enter the growing market for plant-based drinks. By leveraging AdeS’s expertise, Coca-Cola diversified its offerings, exploring new avenues in response to changing consumer preferences for healthier beverages. This strategic partnership has allowed Coca-Cola to venture into innovative products and enter new markets effectively.

Lastly, when corporations strategically invest in educational programs that play a pivotal role in shaping the entrepreneurial landscape, it can yield significant benefits for them. This symbiotic relationship is exemplified by the collaborative efforts of corporations such as Mercado Libre and Globant, a technology services company with roots in Argentina and headquarters in Luxembourg. Through a targeted $50 million investment in the Buenos Aires-based edtech startup Digital House, the two companies pioneered the Certified Tech Developer program. This initiative, integrated into the broader framework of their corporate venture capital strategies, not only advances education but also showcases how corporations can reap diverse advantages by fostering innovation, attracting top talent, and strategically positioning themselves within the ever-evolving tech landscape.


The Need for Corporate Venturing in Difficult Economic Times

Returning to the economic challenges I discussed at the start of this article, I must emphasize that while there has been a recent deceleration in venturing activities in Latin America, mirroring larger venture capital investment patterns, it’s crucial to dispel the notion that it’s an inopportune time to launch or run a business in the region. This perception is entirely off the mark. Turbulent times often act as fertile ground for the emergence of exceptional companies, especially within Latin America, where local entrepreneurs demonstrate remarkable resilience. They possess an inherent ability to transform challenges into opportunities, harnessing adversity as a wellspring of strength and innovation.

It’s crucial to remember this: While some startups may become passive when economic headwinds rise, unexplored market potential awaits those entrepreneurial warriors who fearlessly navigate the storm. True innovation and enduring success often emerge in the face of adversity, illustrating the unwavering spirit of those who dare to defy the odds.

However, it is important to highlight that, in the pursuit of corporate venturing opportunities in Latin America, local entrepreneurs need not passively wait for corporations to notice them. Adopting a proactive approach is a must, and it’s essential for entrepreneurs to actively seek these collaborations and partnerships. They can do this by participating in networking events and industry conferences, identifying companies that align with them culturally and product-wise, then exploring these companies’ potential corporate venture capital branches. These efforts can be instrumental in forging meaningful connections with potential partners, while initiatives like startup accelerators and incubators can also provide valuable resources and introductions to corporations looking to invest in or collaborate with innovative ventures.

In summary, Latin America’s entrepreneurial spirit has the potential to evolve into its most potent asset. Embracing the practice of corporate venturing can power Latino enterprises’ growth, fostering collaboration and innovation between entrepreneurs and corporations, and forming an ecosystem where challenges are reframed as opportunities and resilience becomes the foundation for success. Through unity, Latin American businesses can redefine the region’s trajectory, making it a worldwide epicenter of entrepreneurship and innovation, while inspiring the world with their indomitable spirit and boundless creativity.


Eugenia Di Marco is an international legal advisor, and represents venture capital funds, angel investors and entrepreneurs globally, with a focus on Latin America, Spain, the U.K., Italy and the U.S.

Photo courtesy of Oleksandr P.




Investing, Technology
business development, corporations, innovation, partnerships, startups, venture capital