Posting in Technology
MADRID -- New online platform EmprendeCapital connects Spanish and Portuguese business ideas with venture capitalists and angel investors.
MADRID--EmprendeCapital enrolls start-ups in their exclusive site to connect them with investors.
The three-person team of entrepreneurs are giving back by creating another start-up together, which this time helps start-ups gain capital.
"While being mentors of entrepreneurs, we saw a lot of important ideas that didn't become start-ups because they didn't have money," Tejuca says. "The most famous venture capitalists or business angels received hundreds of business ideas. There are many other people who like to invest, (but) just get the rejects."
"We wanted to help others find capital." This is the most time-consuming part. Tejuca says, "Your main issue should be developing your company, not working for capital."
"What I invest in a company is the partners," says Carolina Tejuca, one of the three founders of EmprendeCapital, which translates to "Entrepreneurs + Capital." She says that, with the right partners, "I think I could invest in all sectors." Tejuca is one of the three-lawyer team that started EmprendeCapital in November. "I do something I like and with people I feel comfortable and safe with. We are complimentary--they know things I don't know" and vice versa."
"I like to match entrepreneurs with investors," Tejuca says. "The platform for me is a the way of doing this, not the end goal," Tejuca says. Technology facilitates the link between entrepreneurs and investors.
Both sides must subscribe to join the EmprendeCapital platform. She believes you need to pay a little--150 euros for a six-month subscription for start-ups--to prove that you are truly committed and that you give value to the service. "I don't want millions of business plans--I want investable ones." Tejuca says she wants to take pride in the potential start-ups on the site, which is why they also act as mentors and go-betweens. Before accepting their fee, one or more of the three partners can meet with the entrepreneurs to see if they think it's feasible, considering the investors that are members already. About half of the entrepreneurs are turned down, without even investing the entry fee.
Tejuca says in Spain a new business idea is like "el ultimo codigo en el desierto"--the last code in the desert. She says that people are much less sharing of their ideas than in the States. Being apart of a pay-for-membership platform gives a sense of protection of both ideas and of the investors. Venture capitalists may want to be known, but it is more likely that angel investors want a bit more anonymity.
The platform itself is very heavy in details on both the entrepreneurial and investing sides. The business plan is extensive, including defending why you think your idea has a competitive advantage and why they should invest in you. On the investor's side, they can search the site based on criteria like exact location, type of industry and percentage of investment committed to the project. Ideally, she would like to see more than two investors in each start-up.
Currently almost half of the projects online are in the technology and Internet sectors, which are the most stable sectors in the Spanish economy in this moment. "Also because people from these companies feel more comfortable" with the technology.
If investors are interested in learning more about one or more of the business plans found on the site, she herself mediates the possibility--while protecting the anonymity of both sides--and advises the partnership. "This is not a social network," Tejuca says. If both ends approve, they meet. If there is a successful partnership.
EmprendeCapital receives 1.5 percent of the money invested. While so far investors have ranged from around 10,000 euros up to 5 million, the average investment is between 100,000 and 500,000 euros.
Not wanting to make any guarantees, Tejuca says that, "Being in our platform means that you will have access to people that normally invest, but that doesn't mean they will for sure."
She says that four years ago, in Spain, there was money for investment, but now there is next to none. However, the Spanish are certainly generating business plans for start-ups. In the last three months, EmprendeCapital has already spoken to hundreds of entrepreneurs, with about 60 passing onto the site with the potential of investors choosing them.
In Spain, if you are receiving "paro"--unemployment benefits--you have the option of "capitalizacion" which allows you to receive the majority of your benefits in one go to invest into your own start-up. You need to have developed a business plan. Tejuca thinks this is a good idea if you really are ready to put the effort in. A many-time entrepreneur herself, she believes that you need to be ready succeed or fail and to go through many pilots and prototypes, like they've done with the EmprendeCapital platform.
Tejuca also thinks that companies need to be born local before thinking globally. "We want to be very controlled. We want to have a good track record near here" before opening to other countries. She describes the Spanish business plan as "different" from other markets. They pay taxes on revenue, but exact sales of businesses and the like are kept from the public. This means profitability or lack there of is described in broader and less certain terms. "I cannot have a local view of Columbia," she says, so she needs seasoned entrepreneurs that live in each country to take EmprendeCapital further, when they are ready. Success in Spain and Portugal will then determine how they expand their company in the future.
So far they have about two successful pairs made, since beginning in November. Tejuca is confident of the success of EmprendeCapital because that's a pretty good track record, considering "This is Spain."
Mar 8, 2012