Thanks to Covid Latin American and US startups, engineers, VCs and Limited Partners may do business north and south more now than ever before

After 18 years of professional experience in the venture capital industry, I believe Covid has accelerated a major shift that has created opportunities for more business to flow between Latin America (LatAm) and the USA. Miami has always been an important meeting point and hub for Latin America but prior to Covid, very few venture capitalists lived in Miami, West Palm Beach, or anywhere in South Florida. When I did a book tour event in Miami in 2016 for my second book Masters of Corporate Venture Capital at my friends’ startup hub The LAB Miami we could not find any VCs to join my VC panel because none existed. I was able to effortlessly populate the VC panel with VCs I already knew in every other city in the US on my 15-city book tour and as well as cities across Europe, Singapore, and China. I normally had 5 to 7 VCs on each VC panel. In Miami we could not find one and so we had a CEO panel instead which may have actually been better!

The “30-minute rule” has always stated that most VCs will only invest in a startup with an HQ located within 30 mins of the VC’s primary residence. With no VCs being in Miami, this location was always disconnected from the VC ecosystem in the United States primarily centered around Silicon Valley with other hubs in New York, Austin, Boston and emerging tech corridors. Miami and all of Florida was entirely cut off from the US VC machine that has fueled the growth of the global tech ecosystem and largest companies on the stock exchange today.

The days of Covid lockdown resulted in much of the New York VC ecosystem moving to South Florida out of necessity and many decided to stay. Insiders now refer to south Florida as “Wall Street South” with Goldman Sachs, Citadel, Tiger and much of Wall Street flying south for lower taxes and housing prices. Good luck getting those families back into that New York City kitchen and back to paying NYC taxes now that the genie is out of the bottle. We also have VC friends that moved from Silicon Valley to Miami during and after Covid and this trend continues despite the headlines of hurricane season. Add to this the ongoing stream of family offices migrating to Florida from the US and LatAm.

So now when a LatAm startup opens operations in Miami they have access to funding from our many VC friends from New York and Silicon Valley now operating in Miami and access to the networks of those VCs. We believe this is a watershed shift that means LatAm startups will now have access to future and follow-on funding not only from these newly relocated Miami and West Palm Beach investors, but those VCs are connected to me and everyone else from Silicon Valley, New York, Austin and all of the US. We are actually seeing VCs pop up all over Florida and not only in Miami.?All of the non-VC Wall Street types will bring more fintech, real estate and construction expertise and a new population of angel investors backing early-stage startups before and alongside VCs.

I personally moved from Silicon Valley to Austin, Texas along with Elon Musk, Oracle, and many other VCs and more are following me here. Austin, Texas is quickly becoming the second largest VC hub after Silicon Valley and overtaking New York City as #2 (where I had my second office after San Francisco since 2011). Austin is #1 in the US for new job creation with Orlando, Florida #2 with Austin leading by a 25% margin. We view Texas as the more natural location for Mexican startups and entrepreneurs to set up shop because they are already well established here spread across Dallas, Houston, San Antonio and Austin. During Covid and back-to-back Zooms, every week I had engineers dialing in from Cabo, Mexico, Santiago, Chile and other cool locations that made more sense than sitting through expensive depressing San Francisco lockdowns. Distributed teams don’t always make sense but for scaling engineering teams they make perfect sense. Not only did Wall Street move to Florida, but engineers moved everywhere. Now the concept of having engineering for a Silicon Valley startup located in LatAm is not so strange. The time zones sure work painlessly.

To us this means that more than ever it makes sense for US and Canadian startups to have some of their engineering in LatAm and as relationships develop across the region, American companies can consider going after customers in LatAm if their VCs have relationships across LatAm to bring rapid success.

Conversely, LatAm startups are better positioned than ever to work these relationships and head north landing in South Florida or Texas and be immediately connected to the broader US VC machine and market for global domination. We welcome a world where LatAm partners with the US and not only China to fund and support world-beating startups. ?

We are keen to hear from software engineering groups, corporations and families that want to help create the bridge between North America and Latin America ushering in a new era in startup success across the Americas and the globe.

We are also looking for partners to host our events and sponsor roundtable discussions and events in Sao Paolo, Mexico City, Lima, Santiago, Bogota, and Buenos Aires.?Get in touch!