Relationship capitalism goes stateside

One of the interesting side effects of the Covid-19 pandemic and its ensuing lockdowns was the internationalization of Silicon Valley. Before, startup founders from around the world were practically expected to make a pilgrimage to tech’s self-proclaimed most sacred site or risk not being able to raise the money needed to grow.

With everyone locked in their homes, it made little difference if you were in Palo Alto, California, or Palo Alto de Abajo, in the Mexican state of Guanajuato. The webcam was the great geographical equalizer, and Silicon Valley started investing in earnest across the world.

But the transition to remote work was not universally good for fundraising. Iván Araiza, the Colombian co-founder and CEO of Mexican logistics startup, Cargamos, mentioned to me in an IRL meeting that local fundraising had become tougher. Why? Because Latin Americans put a special emphasis on meeting people face to face and building interpersonal relationships before doing business. Araiza reckons that local investors will invest three times less if recruited over a computer rather than cocktails.

Read the complete article on Rest of World >

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