The startup craze has become viral, globally: now, there is a breathtaking amount of money to be made as an entrepreneur by exploiting opportunities in the markets of developing countries.
Before getting to this lucrative prospect overseas, it is important to understand where this money-making opportunity comes from. The second tech boom has given rise to an epidemic of ventures being launched by ambitious entrepreneurs in the many startup ecosystems across the country: from Silicon Valley to New York and all the other entrepreneurship centers. In the last 10 years, trillions upon trillions of dollars have been made by young pioneers who turned bootstrapped operations into Fortune 500 companies or equivalent.
This market opportunity continues to flourish, as there is not only a significant demand for the products and services that startups create, but there is also a plethora of capital ready to be invested in these rising ventures.
This availability of investment opportunities is an exclusive result of the ever-dominant venture capital industry, which in recent years has turned into a “king-maker” of sorts. Why? Because it is the VCs who decide which startups will survive in the market, which products will change the world, and what entrepreneurs will - in the end - be left with billions of dollars to their name. Without venture capital, there would be no startup boom: the myriad amounts of ambitious entrepreneurs aspiring for success would have no platform to utilize in order to reach that supreme level of establishment.
Not much more needs to be said of the opportunity to make money right now in the United States via the startup industry (see: Why Entrepreneurship is the only option). But, what about the rest of the world? Europe is not far behind in entrepreneurial dominance, with London leading the way as their equivalent of Silicon Valley.
But what you may be surprised with is the massive market potential in the developing world that the smartest entrepreneurs and VCs are capitalizing on right now. And why shouldn’t they? Remember that by definition “Venture” means “to proceed despite the risk of danger” and “Capital” is “wealth used to create more wealth”. In the third world countries like China, India, and Indonesia, there is a renaissance occurring that has given birth to a variety of lucrative industries such as manufacturing, tech development, and engineering.
Sure, the risk involved with these ventures may be more extreme than in the United States, but that only means more potential reward. Undertaking entrepreneurial ventures in the developing world is not for the feint of heart: only the most Elite of entrepreneurs and Venture Capitalists have the talent, experience, and resources needed to reach success on a global platform.
Sequoia Capital is one of the most respected powerhouse VC firms in the world. Venture Capitalists from this firm lead an exemplary Elite lifestyle from entrepreneurial dominance to luxurious indulgence. Moreover, Sequoia Capital has made a reputation on undertaking opportunities that all others find too risky, and 9 out of 10 times, Sequoia Capital gets the last laugh as they apparently have the “Midas Touch”.
Therefore, it is only natural that they would be one of the leading entrepreneurial forces exploiting opportunities in the developing world. Sequoia is raising money for up to four separate venture capital funds, and each will be worth between $250 million to $400 million. The total amount being raised across all the funds is in the $1 billion range at the moment. It’s unclear when this fund raise will close, but word is that the appetite from LPs (the entities that invest in VC funds) is strong.
Right now, the focus of each these could be: A general venture fund mostly focused on United States companies, a China-focused venture fund, and a China-focused growth fund. Sequoia also is continuing its interests in both India and Israel, and is understood to be opening an office in Brazil, so its fourth fund could well be focused on venture funding in one or all of those areas, or the general international space. Earlier this year Sequoia closed on money for a general growth fund focused mostly on US companies, so that realm is not part of the current raise.
Not surprisingly, Apple – as a dominant force in pioneering entrepreneurship – has also decided to embark on ventures overseas. Apple, behind new CEO Tim Cook, is capitalizing on the lucrative potential in emerging markets. In fact, Apple made $22 Billion in revenue from developing countries alone in 2011, which is a monstrous gain compared to a mere $1.4 Billion in 2007.
The iPhone is creating a halo for the Macintosh, and for iPads. We see the synergistic effects of the markets not only in the developed markets, but in the emerging markets.”
Next, Apple will focus on Brazil, Russia, and China, where Cook said Apple’s sales were $13 billion last year.
I think it is fair to say that developing countries will provide the best market opportunity for entrepreneurs for the next several years, seeing how trendsetters like Sequoia Capital and Apple have already devoted so much time and energy into these endeavors. Now the real question is how will you, as an ambitious entrepreneur, capitalize on this opportunity so that you can reach that Elite level of success equal to leaders at Sequoia and Apple?
Ryan Babikian | Elite.