What is Xcala?
Xcala is a platform that seeks to catalyze early-stage investment with the general purpose of increasing the access of dynamic businesses to funding through angel investor networks in Latin America and the Caribbean. Xcala arises thanks to an alliance between the Instituto de Estudios Empresariales de Montevideo(IEEM) and the Fondo Multilateral de Inversiones (FOMIN) of the Inter-American Development Bank (IBD).
Many businesses fail once the financial resources provided by family, friends or personal savings run out. This is a result of the limited access to alternative sources of funding that would allow these businesses to reach the next level.
Access to funding in early stages of development is essential to increase the probability of success for businesses; therefore Xcala seeks to foster the link between angel investors (operating through networks) and dynamic entrepreneurs.
Currently an acknowledged market failure commonly referred to as “funding gap” affects the funding of new businesses as well as businesses in early stages of development. Normally this gap is merely considered a problem of equity availability, but in fact it is a problem of supply and demand. This gap can be narrowed by venture capital investments or angel investors, through the sale of shares or through debt offerings or bank loans.
On the one hand, entrepreneurs need training and education on how to transform their ideas into projects that attract capital; on the other hand, a large percentage of angel investors are business men who have managed family run businesses successfully, but they are not familiar with innovative processes.
Dynamic and fast-growing entrepreneurships create the largest number of qualified jobs in the region and foster innovation, which is the growth engine for competitiveness in developed countries. This project seeks to narrow the funding gap so that a maximum number of companies may have access to further stages of business development.