Estonia, Latvia, and Lithuania became independent of Soviet rule in 1990, and have undergone a rapid transformation into modern Western democracies. Over the ensuing 25 years they’ve grown a successful venture ecosystem, a process from which the author draws useful lessons for other regions.
The key factor in this story is the enabling role of public entities – government organizations and International Financing Institutions (IFIs) – in empowering the creation of the venture ecosystem. The article outlines the three phases of the ecosystem’s growth, and shows the influence that investing bodies such as the European Bank for Reconstruction and Development (EBRD), the U.S. Agency of International Development (USAID), and other IFIs have had on getting the process underway and driving it forward. The influence of these bodies is not limited to making capital available; they also empowered the education of the local venture players – government institutions and VC fund managers. The IFIs have the patience and long-term outlook needed to get the ecosystem firmly underway, at which point local VC firms can begin to fund, sponsor, and educate local entrepreneurs and managers.
The outcome of this successful evolution is that the Baltic states now enjoy a vibrant venture ecosystem poised to drive the economic growth and sustainability of the region’s economy.
Appeared in CVR Issue 2 – History of Venture
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