Institutional vs individual investors, what is the difference?

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The incursion of new companies and ventures in Mexico strengthen their presence in the market. Currently, the Mexican entrepreneurial ecosystem stands out for its talent and attractiveness for everyone both institutional and individual investors. 

With this dynamism, we are increasingly seeing success stories and milestones of very early-stage companies with the ability to raise large amounts of capital for growth and even manage to be unicorns. 

Just as it happened in 2021 that the Mexican entrepreneurial ecosystem added 10 unicorns through private capital. An investment alternative that is emerging as the main ally of the ecosystem. 

This growth in the industry attracts the attention of new players, for example, institutional investors as well as specialized funds. Although also by individual investors. 

Investors in the private equity industry

So this type of investment in ventures currently poses an opportunity for individual and institutional investors, but what is the difference?

individual investor

He is an investor with his first investment portfolios. He is about a natural person who is determined to increase his assets. Generally, he does not have an investment strategy even though he is familiar with the basics. 

Like any investment, this person can invest in ventures through a fund specialized in the industry. 

The WORTEV CAPITAL Venture Capital Fund is one of the first in the country's industry to be open to investment by any individual seeking to create their assets and, in turn, detonate more Mexican companies. 

Institutional investors

The Institutional investors in Mexico are organizations or funds with expertise in the financial market.  They opt for long-term strategies and are willing to take more risk in exchange for better returns. International organizations and specialized funds also enter.

Here are examples of institutional and corporate investors: 

Each of these types of funds and institutional investors have large amounts of capital in search of sectors and ventures with potential and profitability.

You can also read: Corporate Investments, a partner for private capital.

Seedbed for entrepreneurs and investors

The entrepreneurial ecosystem in Latin America is one of the markets recognized for talent and innovation opportunities. 

The development of the region in the entrepreneurial ecosystem, mainly companies in initial stages, found it difficult to find investment alternatives, generally the capital to start these projects.  

The Latin American region is characterized by the conditions and development of ventures from an idea to a consolidated company. In recent months, the technological incursion accelerated innovation and the emergence of emerging companies in the region. 

Consequently, the region remains one of the benchmarks in the industry for general partners, institutional and local investors. For years past, Latin American countries have had a system that safeguards the development of a company from the moment it emerges as an idea to its consolidation. 

Countries like Brazil, Colombia, Chile and Mexico have programs and alternatives to stimulate the creation of more companies and consolidate their presence in the market. According to the IDB data detail, a determining factor in the development of these companies are the accelerator programs and incubator funds.

Mexico, the favorite in the region 

The behavior of this ecosystem in the region increases the interest of more investors in the ecosystem. While the region alone is one of the most important, Mexico is one of the most important. 

In the country, the development of companies is one of the pillars of growth and job creation. Hence, their development is a crucial part of the economy.

Additionally, during 2021, the incursion of more international funds and institutional investors such as Softbank Sequoia Capital, show the increase by investing in Mexican companies. 

Within the Mexican market, these factors make the country a hotbed of high-potential companies:

  • technology adoption 
  • Talent in the ecosystem 
  • Opportunities and needs of the Mexican market 

In less than two years, Mexico remains the second most important country in Latin America with a strengthened ecosystem. 

Its characteristics allow new and more companies to emerge in new markets, the incursion of technology and more unicorns have placed the Mexican market on the radar of other markets.

Factors that attract more institutional investors

With more growing ventures and seed stage startups. The role of more investors, both individual and institutional, to detonate this market is fundamental. 

  • New business models
  • Transformation of traditional and technological sectors 
  • Opportunity for investors
  • Profitability and scalability
  • Flexible investment alternatives 
  • Access to new markets

Private capital is an alternative in the sights of both institutional investors and international funds, as well as individual investors. Its potential and attractiveness make it one of the alternatives to any investment portfolio. 

WORTEV CAPITAL, as a venture capital firm, seeks the growth of companies in key sectors for the country. And we're among the first funds in the industry to make it easy for individual investors to participate. 

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The dynamism of the entrepreneurial ecosystem opens the door to both individual and institutional investors.

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