Xconomist of the Week: Linda Rottenberg on Global Tech Boom
Tech blogs typically cover startups in North America and Europe that want to be the next Facebook-style success, but the innovation ecosystem is far more diverse and far-reaching. Linda Rottenberg, CEO and co-founder of New York nonprofit Endeavor Global, has spent the last 15 years or so championing an effort to connect mentors and investors with what she calls high-impact entrepreneurs at high-growth companies in developing countries. Now Endeavor is advancing its mission through the new donor-based Endeavor Catalyst fund.
In February, Endeavor Catalyst made its first investment as part of a $2 million financing of software maker Globant in Buenos Aires, Argentina. Rottenberg says Argentina’s tech sector is thriving, even though the devaluation of the peso and political upheaval has made the country a challenging place to build businesses. Nine-year-old Globant, which has more than 2,500 employees around the world, is one example of an ambitious company in Argentina creating revenue and new jobs. Rottenberg says the momentum among high-growth businesses in Argentina can also be seen in such countries as Chile, Indonesia, Egypt, and Jordan. “Good ideas have no boundaries,” she says.
Endeavor Global looks for entrepreneurs in developing countries who can serve as inspirations for other startups that may have little homegrown support. Over the last fifteen years, Rottenberg’s organization has screened some 30,000 companies spread across fifteen economies around the globe. Out of that group, just 600 entrepreneurs from about 400 companies have been selected as Endeavor Entrepreneurs. They receive support through advisory boards, mentors, peer networking, and other professional services.
Endeavor wants to find more companies with the potential to have significant economic impact. In 2011, the 400 companies that Endeavor worked with collectively generated $5 billion in revenue and created 180,000 jobs. Rottenberg says those jobs pay two to ten times the local average wage.
To help increase support among investors for these growing companies, Endeavor is taking a more participatory role. Through the new Endeavor Catalyst fund, the organization invests up to ten percent of each funding round it chooses to participate in alongside other investors. “It is a way for us to encourage other investors to come in,” Rottenberg says. Thus far Endeavor Catalyst has raised $10 million and plans to raise $40 million. Endeavor does not take a board seat when it invests through the fund, she says, so it does not directly influence the decisions of the companies and the entrepreneurs.
High-impact entrepreneurs who are willing to take risks will drive innovation and create more jobs in today’s volatile world economy, Rottenberg contends. She says there is a belief that some growing companies in developing areas may even … Next Page »