Under the Trump administration, there will likely be challenges for the U.S. tech industry when it comes to attracting foreign talent.
But it’s never been a better time to start a company, said Dave McClure, a prominent Silicon Valley venture capitalist.
“The general trend for start-ups under Trump or anyone else is still fantastic,” according to McClure, who was interviewed on stage this week at South by Southwest, the tech, music, gaming and film conference and festival in Austin, Texas.
McClure is a founding partner of 500 Startups, a global venture capital seed fund firm. Since its inception in 2010, the firm has invested in more than 1,500 technology companies in more than 60 countries.
It also takes investors, start-up founders and Silicon Valley executives on several tours each year – dubbed “Geeks on a Plane” – to burgeoning high-growth technology markets. Its next trip will be later this month to four cities in Africa — Lagos, Nigeria; Accra, Ghana; Johannesburg and Cape Town, South Africa.
Some aspects of 500 Startups’ work have become more uncertain since President Donald Trump took office, such as whether the firm can bring foreign entrepreneurs to the United States, as it does for its four-month seed program, McClure said. The United States is “shooting ourselves in the head by limiting immigration,” he said.
But when McClure looks out across the world, he sees entrepreneurship as a global phenomenon not relegated just to U.S. tech industry hubs or even hot spots such as China and Western Europe.
One sign of whether a region has the potential to take off is whether there are large investors beyond those offering an entrepreneur initial funding. Another sign is whether there have been successful “exits,” which can be when a company is bought by a larger firm or has a successful public offering.
Some countries might tout their number of entrepreneurs or point to high tech industrial parks as signs of a growing innovation ecosystem. But McClure looks at another measurement – the number of venture capitalists per capita. The United States and China have the most venture capitalist per capita, he said, whereas countries such as Brazil and Mexico have just a handful.
But as the U.S. government helped plant the seeds of Silicon Valley, foreign governments can step in and help a region’s start-up culture take root, he said.“Get that cycle going,” he said. “And that’s what gets the cycle going in other parts of the world.”
As for people interested in investing globally, by all means, write the checks, he said. The key is patience.
“If you are going to do international investing, you have to do it for the long haul,” McClure said. “You need to wait three to five years before it takes off.”
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