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The Embassy in the U.S. seeks “Angel investors” for the Argentine SMEs

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The Embassy in the U.S. seeks “Angel investors” for the Argentine SMEs

Tags: Posted date: May 17, 2012 |

If from the top of my head I told you that I managed to establish a relationship between the angels and technology start-ups and renewable energy you would probably think that I was very distracted and have just mixed up two recent papers on mythology and futurism. The missing links in this reasoning, however, are the SMEs in our country, their search for funding and their enormous potential for development and employment.

The “angel investors” is someone who provides capital to a business at an early stage (start-ups projects) usually with a shared participation in the company. The angel investor covers the gap between the financing of a new business and a capital of higher risk (venture capital), almost exclusively for larger and consolidated projects.

“Angel investots” tend to be part of a second round of financing for “start-ups” with a high growth potential. According to some estimates, in the United States they represent even a larger flow of invested capital than the venture capital institutions (around US$25 billion).

For this reason, the Embassy of Argentina in United States has established a link with one of the main groups of investment angels in the region of Washington, D.C. (“Washington Archangels”) and during the last few days the Embassy hosted a day where small and medium entrepreneurs of our country presented four projects selected among the ten originally submitted.

These projects encompassed from software for retail projects and social networking exchange to renewable energy based on innovation, intensive knowledge of high added value, and whose development would allow the internationalization of companies. These projects´ investments total US$36.2 million. The average number of current projects funded by “angel investors” in Argentina is between US$50,000-150,000.

This initiative arose from the creation of the Under-Secretariat for Investment Development of the Ministry of Foreign Affairs in 2011, and the Embassies were given the responsibility to promote Argentina as a strategic investment destination and promote opportunities for foreign investments in the country.

Our diplomatic missions are thus beginning to play a leading role in the constant and proactive promotion of investments to potential investors, identifying opportunities, and promoting the competitive advantages that make Argentina an attractive place for a profitable investment in the world.

Through the identification of potential investors, the job involves, basically, the general promotion of Argentina as a destination for investment (“image building”) and the promotion of specific investment-oriented projects (investor targeting).

The Ministry of Foreign Affairs already possess an Investment Project Database (BaPIP), which is an “on-line” portfolio of investment opportunities designed to facilitate the linkage of potential foreign investors with investment opportunities throughout the country.

The productive investment projects in play are focused on the needs of small- and medium-sized enterprises and “start-up” projects. SMEs, as it is well-known, are, as a sector, the biggest producers and the largest employers in our country, but face as a challenge the need to bring outside financing, especially in the early stages, especially if such companies are dedicated to innovation and technological development, due to the risk involved.

Now you will believe me if I tell you that we know of a few angels willing to strengthen through investment the protection needed for the development of the Argentine economy, in particular, to keep the country away from other funds, vultures funds, that are motivated only by speculation, accustomed to buy assets in default situations for a few cents to later sue before courts for billions once a country is already standing on its feet.

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