Fostering Investment in Innovation to Increase WealthBy Sofía Hanna | Thu, 02/17/2022 - 09:44
Q: Why is it so important to increase investment levels in Mexico?
A: When capital is channeled to strategic sectors, countries drive progress and create impact. Arkangeles is part of an industry dedicated to mobilizing such capital. The company seeks out investors for sectors looking to innovate, mostly focusing on startups.
There are two reasons why we should increase investment levels. First, it creates greater abundance of capital moving to problem-solving innovation, which also generates jobs and economic growth. Second, investment can lead to financial freedom by giving investors the ability to increase their wealth and improve their future quality of life. Wealth-based discrimination is a significant problem globally. By allowing people to invest in better vehicles and assets, you automatically accelerate their net worth. This helps to reduce the wealth gap.
Q: How are investment ventures helping to combat Mexico's inflationary impact?
A: There are two ways in which we can offset the inflationary impact. The first is straightforward and goes hand in hand with investment: investing in startups via a minimum viable portfolio significantly minimizes risks and maximizes the potential returns to 80 percent, according to US historical return statistics regarding angel investors. This trend is starting to replicate in Latin America. In fact, more capital is being invested in the region: Latin America closed 2021 with almost US$20 billion in venture capital. Most of this capital was invested in early and lead stages, which reduces investor risk and increases access to capital so ventures can grow. In turn, investors can generate an annual return of between 15 percent to 40 percent using a well-diversified startup portfolio. Nevertheless, there is a luck factor. The second way is by mobilizing more capital toward innovation. This generates progress due to entrepreneurs seeking to solve problems. By increasing a market’s offer, you lower costs and strengthen purchasing power.
Q: What is your perspective on investing in cryptocurrency and non-fungible tokens (NFTs)?
A: These are still considered alternative assets, although traditional cryptocurrency is becoming increasingly mainstream. Mexican statistics show that between 30 percent and 40 percent of the population has already interacted with cryptocurrency. The adoption rate of the internet in 1995 compared with the number of crypto wallets adopted globally today stands at a similar proportion. It is only a matter of time before alternative assets become part of our daily lives. Still, cryptocurrency is heavily speculative. Of the people investing in crypto, next to no one understands their protocols and peculiarities. Most investors simply speculate on supply and demand.
The adoption of cryptocurrency marks the transition to Web 3.0, which is an interconnection between the physical and the virtual world. That is where NFTs originated: they do not have a function but rather provide a right of ownership or access. By mounting commercial and ownership registries to blockchain, we can tokenize all companies, properties and licenses. All NFTs are cryptocurrency protocols that are technically startups. They are funded by private capital and always have a person behind them. That is something to keep in mind when investing.
Q: What strategies has Arkangeles implemented to contribute to financial inclusion and education in Mexico?
A: Everyone should educate themselves. Knowing where to invest is hard work. Understanding trends and changes in consumption patterns requires a lot of research, as well as a level of financial education. Traditional financial institutions show that educating their clientele is not their priority. Arkangeles has an investment academy focused on innovation and startups. In the future, we want to open this Arkeducation to different audiences so that people can learn about alternative assets and where to find them.
Q: What will 2022 look like according to Arkangeles?
A: Over the past five years, 48 Latin American unicorns have been born. This highlights a great potential for regional innovation and talent development. Previously, people bet on importing technology. Now, we are demonstrating that we have the local capacity to compete with sophisticated markets like Silicon Valley when it comes to innovation. Already, more than 40 foreign VCs invest in Mexico’s startup ecosystem, which boosts the market. In 2022, we will see more Mexican unicorns, as well as more value creation, higher wealth and better jobs. Startups will become a lever for growth in the region. Arkangeles invites everyone to invest differently and mobilize their capital into businesses that drive growth through innovation.
Our mission is to help people grow their wealth. The company launched a semi-automated diversification product for annual investment. We also launched Arkgroups, where each investor can create their own investment group, invite their friends and invest collectively. With this, we seek to make investment more personal.
Arkangeles is a multi-asset, crowdfunding platform that allows users to invest in top startups and other ventures in Latin America.