How can you invest in emerging markets?

2 Risk management

Emerging markets are also prone to volatility, uncertainty, corruption, political instability, and social unrest. These can affect the viability and profitability of your investments, as well as your ability to exit or scale them. Therefore, you need to have a robust risk management strategy that includes due diligence, diversification, hedging, contingency planning, and exit options. You also need to be prepared to deal with ethical dilemmas, legal disputes, and reputational issues that may arise from operating in these markets.

3 Local partners

One of the most effective ways to invest in emerging markets is to partner with local entrepreneurs, investors, and stakeholders who have the relevant expertise, network, and insights. Local partners can help you identify and evaluate opportunities, access resources, navigate challenges, and build trust and credibility. However, finding and working with local partners also requires careful selection, alignment, and communication. You need to ensure that you share the same vision, values, and expectations, and that you respect and leverage each other's strengths and differences.

4 Innovation models

Investing in emerging markets also requires adapting your innovation models to suit the specific contexts and constraints of these markets. You may need to adopt a frugal, lean, or inclusive approach that focuses on delivering value to the customers, solving real problems, and optimizing resources. You may also need to experiment with different business models, revenue streams, and distribution channels that can reach and serve the target segments. Additionally, you may need to consider the social and environmental impact of your innovations, and how they can contribute to the sustainable development of these markets.

5 Learning mindset

Finally, investing in emerging markets requires a learning mindset that embraces curiosity, humility, and openness. You need to be willing to learn from your own experiences, as well as from the local context, customers, partners, and competitors. You need to be flexible and agile, and ready to adjust your assumptions, strategies, and actions based on feedback and data. You also need to be aware of your own biases, blind spots, and limitations, and seek diverse perspectives and inputs that can enrich your understanding and decision making.

Investing in emerging markets can be rewarding and fulfilling, but also complex and challenging. As a venture capitalist, you need to have a clear vision, a solid strategy, and a strong network to succeed in these markets. You also need to have a passion for innovation, a tolerance for risk, and a hunger for learning. Are you ready to take on this exciting adventure?

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?