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.