Pitches and a Shifting Landscape in Havana

Orlando Zambrano sends us his latest dispatch on entrepreneurship in Cuba

The last few weeks in Havana have been busy for Alter and important for Cuba. We’ve begun the process of selecting ventures for our portfolio, thus entering the second-to-last phase of our country launch. The process is exciting for both the Alter team and for the entrepreneurs. In our first round of invitations we asked 6 companies to present their pitches to us. We’ll add a few more to the candidate roster this week.

As I type, I’m sitting next to our CMO John Powell in the lobby of the Habana Libre, a storied and iconic Hotel in Havana that has become Alter’s in-country hub. We’re preparing to receive the first company pitch of the Cuba launch. John has joined me here in Cuba after a stint in Myanmar visiting Alter’s portfolio companies. In a few short days, he’s had the opportunity to see and experience much of Havana.

Today we’ll be hearing from the teams behind Clandestina, an apparel design company that is working to build a sustainable brand that reflects uniquely Cuban characteristics, and Kewelta, an offline advertising and social media platform. Once all the candidate companies have had the chance to present to us, the Alter Selection Committee will select the best ventures by the end of next week.

All of this is taking place amidst a complex regulatory environment that’s been evolving in real time. In the last week, Cuba’s government announced a freeze on the issuance of new licenses for many private sector activities. A few days later, a local magazine reported that the government had asked the country’s largest cooperative to shutter its operations. In subsequent statements officials have reiterated that this move should not be viewed as a halt to the process of economic reforms, but rather as a temporary pause in order to devise regulations that promote more orderly development of the private sector.

The optimistic view is that the ministries that regulate cuentapropista — entrepreneur — activity in Cuba will not only develop new regulations around taxation and business operations, but will also enact reforms that have been widely discussed (and in some cases ratified), but not yet codified. Chief among these would be a law that creates legal personality for small and medium enterprises — marking a significant step for the development of the private sector and opening interesting options for investment, financing, and even the buying and selling of businesses. We cautiously await the results.

Signing off now. It’s time to hear the first pitch…