How are SMEs capitalized in Mexico? Know the panorama of access to entrepreneurial capital
Private equity funds rank second as the main source of funding, only after banks and almost on a par with providers, who previously were the main sources of leverage for SMEs.
After the economic blow generated by the pandemic, businessmen and entrepreneurs have turned their eyes to entrepreneurial capital and private capital to obtain financial resources. For many SMEs, access to capital and investment alternatives remain a mystery and a path full of obstacles.
The accelerator and entrepreneurial capital fund WORTEV, prepared with the support of the Association of Entrepreneurs of Mexico (ASEM) the study Business and Money: Panorama of access to capital for SMEs in Mexico , which provides a complete overview of the perception of capital funds.
Among the main findings, more than 50% of entrepreneurs assure that their capital needs grew dramatically in the last year and private equity funds rank second as the main source of funding among entrepreneurs with 18.36% of Entrepreneurs surveyed, only after banks and almost on a par with suppliers (18.11%), which for many years were the main sources of leverage for SMEs.
The pandemic eliminated more than a million small companies, but the growth in the visibility of private equity funds and even the consolidation of the first Mexican unicorns, are achieving the interest of companies in these financing or funding alternatives.
“We are facing an encouraging outlook for the capitalization of ventures and companies that are transforming the future. In recent months we see more and more Mexican unicorns, because foreign funds have set their eyes on Mexico and valued the country's business models, "said Denis Yris, CEO of WORTEV.
Regarding the conditions under which SMEs obtained the capital, the study reveals that more than 31% of entrepreneurs obtained between 500,000 pesos and 1 million pesos in their last financing round, followed by those who raised between 1 and 50 million pesos. . While 58% said they were willing to give between 20 and 30% of their company to achieve that capital.
Undoubtedly, one of the main situations that resulted from the COVID pandemic were drastic changes in the forms and strategies of the business plan, so among the main objectives of entrepreneurs to obtain capital have been to increase their production and expand their business, translated into higher sales and increase presence in other markets.
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According to their attitude and perception about the different financing alternatives, the study divided SME managers into six main profiles: Organized, who have the best control over the financial objectives of their company. Determined and Strategic , who prefer to resort to formal sources of financing and Risky , Traditional and Reactive , who are unaware of financial plans and are less prepared in this area.
The cataloging of these profiles according to the study shows that in the current scenario, there are increasingly more prepared entrepreneurs and aware of the risks and opportunities that exist in this process.