Although 2021 was not the best year, it has shown improvement in the activities of companies so the following year promises a positive outlook and even, it is considered to attract more investments, but being a small company, it is sometimes difficult to find them. Randall Castillo Ortega, the founder of Central American SME lender RACO Investment, provides some insight.
Transnational companies concentrated on strengthening their value chain to prevent disruptions like lockdowns in the initial year of the pandemic. This led to lower investment in Latin America.
To regain their appeal to transnational corporations, Latin American countries will need to invest more public money. A rise in prices for raw materials like copper and agricultural products could be a negative incentive. This, over time, doesn’t provide Latin America with sustained economic growth and employment.
According to Fundary, a collective financing platform, the acquisition of capital is faster for companies with two years of operation. This is especially true of angel investors, who have stood out in the business financial universe for investing significant amounts per company, being the main source of capital for them.
Another of the strong investment options are financial technology (FinTech) companies, which have continued to grow over the last three years. Asserts Castillo, “The percentage of growth of FinTechs in Latin America has been greater than 16%. There are now over 512 startups that make up the ecosystems that were added last year when, a year earlier, 394 were registered.”
Finance and technology have formed an unparalleled team that has not been seen before. It is important that entrepreneurs know and, above all, take advantage of this alliance to seek financing and attention from investors, approaching digital platforms to obtain the capital they need to grow in 2022.”
Therefore, for 2022 to be a favorable year in investments, there are three aspects that must be taken into account. The years of operation of the company are the first. The ideal is to have at least two years of operation, since investors hardly put their money in nascent companies or with less than the indicated time, due to the latent risks of having significant losses. Similarly, many FinTech companies have as a requirement to grant credits that the applicant has a couple of years of experience.
In addition to operational experience, an investor will always prefer to inject their money into a company that can show them a solid outline of how their staff works, with specific functions and well-defined goals. Asserts Castillo, “In this time of rethinking and organizing, do not forget to have an attractive and clear plan to attract your investment.”
A company’s data is very valuable, but rarely do microentrepreneurs have time to organize it or use it in some way that favors them. That is why it is important to have control of the state of health of the companies, the possible problems and solve them in the most opportune way.
The way to approach investors is simpler than you thought. The trend of growing your business in 2022 through FinTechs focused on crowdfunding will be increasingly strong, but, as you read, you need certain requirements to attract the attention of those who will put capital and trust in your company. Implement them and get the investment you need.