Those seeking capital often make the mistake of assuming that the best investor-candidates are to be found in the major money centers. While it is true that many top-tier venture-capital and family-office investors have offices in New York or London, the ability to access those names may be limited. One reason is that they are routinely flooded with investment proposals. Your time and energy may actually be more rationally spent outside of those entrepots.
The big change over the past 20 years is that emerging markets are now a source of investment capital, not just a destination for it. That has turned traditional theory upside down; many learned that capital flows from the North to the South, more or less. That notion now seems quaint. Much of the global growth we have seen has been generated by the developing world. As the cake has grown in size, so has the wealth of nations like Chile and Korea. Keep in mind that the economies of the developing world are now larger than all advanced economies combined.
For those seeking investors, there are percolating pools of liquidity to be tapped in unexpected places. We have sourced deal capital in Dalian and Kolkata, not to mention Buenos Aires and Cairo. That reality is now turning capital identification into a global sport. The bad news is that you may need a hefty travel budget to find the right match; the good news is that investors everywhere want commanding opportunities. Local deals do not always fit risk-mitigation requirements. Better to find a supportive stakeholder in Kuwait, than an antagonist one in Hong Kong. ■
Learn more at The Brookings Institution.
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