Building a startup in LatAm is a lot like baking a cake—here’s the recipe

Building A Startup In Latam Is A Lot Like Baking A Cake—here's The Recipe Building A Startup In Latam Is A Lot Like Baking A Cake—here's The Recipe
building a startup in latam is a lot like baking a cake—here’s the recipe

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Today we had our Morning Coffee with Isabelle Foster is a Fulbright Research Fellow from Stanford University.

Contxto – Chile, Colombia, Mexico—these heavy hitters are generally some of the first countries that come to mind when people think about the startup ecosystem in Latin America. But, have you ever thought of Paraguay?

Turns out this small country of roughly 7 million people, often overshadowed by its two large neighbors—Argentina and Brazil—can provide a great template for starting a business in a dynamic economy.

Small but mighty, the country is trying to make its presence known in the Latin American ecosystem. A concentrated group of policymakers, private sector individuals, and civil society members are trying to work together to whip up a recipe for entrepreneurship that will reshape the country in the coming years. 

The ingredients

You need to gather all the ingredients on the kitchen table before you can throw your concoction in the oven.

Studying the development of entrepreneurship in other countries has given Paraguay a model to follow. Finance, policy, mentoring… these are some of the key ingredients which Paraguay is trying to add to its cart:


First and foremost, policy is often the greatest barrier or facilitator in sparking entrepreneurship. This was seen with the great success that Chile experienced, with its program StartUp Chile, and Colombia, with Ruta-N Medellín.

Last year, 2019, was an important year for Paraguay. Several key policy measures were put in place that will have long-term effects in facilitating entrepreneurship.

To start, the Ministry of Industry & Commerce created the Paraguayan National Entrepreneurship Directorate (DINAEM) to coordinate entrepreneurial initiatives in the country and to push for more business-friendly laws.

At the same time, the National Council for Science and Technology also created a new program with the purpose of supporting technology-entrepreneurship, an area which has often been lacking in the country.

Paraguay’s president also passed Decree 2314 in August of 2019, creating a new National Innovation Strategy, which will play an important role in coordinating innovation efforts and developing strategies for solving two national problems for the country.    

International Exposure

The entrepreneurial ecosystem in Paraguay has remained largely disconnected from the international community.

However, things are slowly starting to open up. WeXChange—an annual conference hosted by the Inter-American Development Bank (IDB) to support female entrepreneurs in Latin America and the Caribbean—was held in the capital, Asunción, during November 2019.

This brought hundreds of female entrepreneurs, mentors, and investors to the country, giving it a needed spotlight and moment of exposure. 

At the same time, one of the most successful government programs—like the Programa Nacional de Becas de Posgrado en el Exterior “Don Carlos Antonio López” (BECAL)—have played a crucial role in sending Paraguayans abroad to study.

Increasingly, these students are pursuing innovation and entrepreneurship degrees and many return to start their own enterprises in the country, crucially bringing back ideas and connections from abroad. 

Importantly, Paraguay finally joined the well-known Global Entrepreneurship Monitor (GEM), debuting in the 2019/2020 edition.

While the country currently scores low in the index, joining is a critical first step for increasing international awareness and benchmarking where the country is, so that it can make tangible efforts to improve in the future.  


It is what we are all looking for… but particularly in the case of startups, having a source of funding is necessary for the growth of a company. A small group of angel investors joined together for the first time in 2019 to create Red de Inversión Ángel Paraguay, comprised of 29 individuals.

Two key leaders in the Paraguayan angel investing scene are Vivianne Bernardes-Cibils and her husband Cristian Cibils, who run Cibersons International.

The two are entrepreneurs in their own right and are dedicated to fostering entrepreneurship in the country. Both are active in investing, mentoring, and working with other angel investors to provide more seed capital to fledgling entrepreneurs. 

At the same time, the Argentinean investor ‘Alpha Imperial Group’ started its Fondo de Inversion en Innovación de Paraguay (FIIP) in downtown Asunción in 2018.

Now and in the coming years, this group will play an important role bringing risk capital critical and also bringing international business expertise from Argentina to support, mentor, and connect starting entrepreneurs in Paraguay. Currently, the team is focused on FinTec, AgTec, and the InuranceTec sectors. 

And in 2019, Paraguay was selected as a new site for the United Nation’s Development Program (UNDP) Accelerator Lab.

This lab and its mighty team is playing a critical role funding projects related to innovation, economic development, and solving social challenges in the country. The group will have an outsized impact in providing resources, connections, and expertise to kickstart needed initiatives in Paraguay.

Mentoring & Skill Development

This is like the eggs—mentoring and skill development provide the needed protein to fortify the cake and help the ingredients stick together. As most studies on entrepreneurship will say, universities play a critical role in ensuring the success of entrepreneurship in a country.

Chile has a strong network of universities, such Pontificia Universidad Católica de Chile, which offer programs like Innovation and Entrepreneurship. While Paraguay has yet to offer any specific careers in this area, the leading university, Universidad Nacional de Asunción, has recently launched a few programs that should hopefully grow in size in the coming years.

One example is the Center of Innovation, a hub launched in December 2019 by the university’s StartUp Lab, in partnership with several government agencies. This Hub will serve as a coworking space for students as well as the public to work on projects, attend entrepreneurship events, and connect with like-minded people.

Conveniently, the group is also located next to the University’s Architecture School, which houses the FabLab. This center has all the modern technologies—from 3D printers to laser cutters—that will be extremely helpful in allowing innovators to experiment, prototype, and develop new ideas.

The Ministry of Technology, Information, and Telecommunication also created the program InnovandoPY in 2015. This program has the intent to support innovation and startups through three distinct programs.

These include: a startup acceleration program & annual pitch competition; ideathons; and hackathons. This startup pitch contest plays an important role providing recognition to the most advanced startups, building a community, and offering some more incentive for people to develop a company.  

Once again, the BECAL program plays a role in this space, as students returning from abroad are eager to share their acquired knowledge and skills.

Many teach at local universities, work at companies to support entrepreneurs, and volunteer in public events. Alongside these energetic young returners are a few other key organizations have also played an important role.

Examples include: KOGA Impact Lab, an IDB-supported group that hosts events and workshops for social entrepreneurship; Sistema B, part of the global B Corp. network working to encourage sustainable and socially-conscious businesses; and Penguin Academy, a coding school teaching people how to code, do data science, and use technology to solve problems. 

Mix it all together


Over the past few years, Paraguay has done a good job beginning to gather these needed pieces. Therefore, the next step—mixing it all together—is going to be critical.

Just like bread won’t rise if the flour and yeast aren’t properly mixed, ensuring that these different ingredients work together will be key for determining how well the cake is baked. In the past, government institutions, different organizations, and universities tended to work in silos rather than in close collaboration.

This has been a detriment, but things are starting to change. The National Innovation Strategy run by the Presidential Delivery Unit is developing a new Innovation Unit.

Once launched, this new unit will play a critical role in ‘mixing these ingredients,’ as it will be responsible for coordinating different actors and strategically organizing initiatives to increase innovation for the country.

Now—Time to let it bake 

And this is where patience comes in. For almost every eager baker, it is all too tempting to sit by the oven and check every few minutes to see if the cake is ready.

But patience is key. Paraguay has made good progress assembling these ingredients, but it will take time for the entrepreneurial scene in Paraguay to fully develop. With a young population and stable economy over the past several years, there is energy and momentum to make this happen, but patience must not be forgotten.

However, solace can be taken in the fact that it also took Chile, Mexico, and Colombia several years to get to where they are now. Therefore, the chefs in Paraguay should know that they are in good company, and that even though the timer has yet to beep, the cake is still rising.

Isabelle Foster is a Fulbright Research Fellow from Stanford University. She can be reached at her [email protected] or at her LinkedIn.

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