15. The opportunity of investing in Spanish tech
The
challenge I referred to in my previous post represents and excellent
opportunity for the cunning mid or small size investor. A Spanish tech start
up, based on the same idea as a US tech start up, and with a team of the same
quality, will be valued 20 to 30 times cheaper than its US alter ego. This is a
simple consequence of the law of supply and demand, with seed and early round
capital being in short supply in Spain. This means that your investment dollars
will buy you 20 to 30 times more equity in Spain, and therefore, if the
business succeeds, you will make many times more money. Importantly also,
moderate success will still reward you heavily, which it would not in the US,
due to inflated seed and early round valuations. I think the smart money will
soon start to spread to Spain and similarly under invested markets. Talent and
entrepreneurship are global, tech seed capital, not yet.
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