Reality Check

In his book, Principles, prominent investor Ray Dalio writes “truth — or, more precisely, an accurate understanding of reality — is the essential foundation for any good outcome.” In fact, the first life principle he mentions in the book is “embrace reality and deal with it.”

What is the reality of the Peru startup ecosystem?

First, investment dollars in Peru are small compared to the total in the region.

Data from Peru is from PECAP, while the regional data is from LAVCA. Importantly, the Peru numbers do not include Series A investment rounds in MiMediaManzana, Turismoi and Xertica.

Second, Peru is ranked in the middle of the region both in terms of investment environment and as a technology hub.

LAVCA 2017/2018 Scorecard

What does this mean for founders and investors in Peru?

  1. Focus on maximizing future potential rather than limiting risk (it’s hard enough as it is)
  2. Expect success to take longer, require more work, and involve more unexpected costs
  3. Augment the number of potential investors by seeking regional integration
  4. Seek to maintain future optionality by optimizing capitalization table over valuation
  5. Engage current investors and cultivate potential investors, even those that said “no” the first time

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