Mexico’s first government-sponsored seed fund debuts
One of the constant grumbles among entrepreneurs in Mexico is the lack of public resources when staring a new business. The Mexican Economy Secretariat has put forth an effort with projects like Mexico Emprende and Nacional Financiera (Nafin), the federal organization responsible for supporting the financing of small- and medium-sized businesses. The latter has been of the most active organizations in terms of modernizing its processes and seeking alternative methods of funding for technology companies in particular.
It’s cause for celebration that a few weeks ago, the Secretariat, Nacional Financiera and the Mexican Stock Exchange presented the first $22.6 million fund for Seed-Funding Co-investment.
This fund is directed towards businesses focused on innovation along two lines: investment vehicles such as seed-funding, incubators and accelerators and direct investment.
At the public launch of the fund, Hector Rangel Domene, Nafin General Director, said, “This is the first fund of its kind in Mexico and I believe the state, via the Economy Secretariat and Nafin, have an important role in laying the foundations and supporting the industry in developing an ecosystem and businesses.”
Even though this fund looks to benefit all business types – not just technology base ones – it’s a given this program will benefit not only entrepreneurs but also new investment and management ideas that have emerged over the past few years.
These resources will be directed towards projects that already have a business model but might still not have a prototype—their objective at this stage is to validate the market, test the concept and cover initial operation costs. These aspiring businesses must be less than three years old, be seeking capital between $7,522 and $376,092 and have an innovative product or service needing traction.
“The program’s objective is to establish short, medium and long-term public policies that allow the promotion and strengthening of innovation in processes and services in order to increase the national economy’s competitiveness,” said Lorena Martinez, Sub-secretary of Industry and Commerce for the Economy Secretariat.
While it’s good to have federal resources, it’s far from a Mexican business-generating panacea that will give power and strength to existing private initiatives in early stages that are looking to go to the next level. Thousands of start-ups fail because they spend their resources before reaching a balancing point. For many, this type of funding is the gas that allows them to go into the black. All in all, to have profitable businesses that generate employment and enrich everyone is a shared responsibility.
Emprende.la focuses on entrepreneurial innovation in Mexico.