Puerto Rico’s Evolving Entrepreneurial Landscape: Insights from the Mastercard-Endeavor Survey
A recent survey conducted by Mastercard and Endeavor has revealed a significant shift in Puerto Rico’s entrepreneurial environment. The findings highlight that Puerto Rican entrepreneurs consider community and networking their top business advantages, closely followed by proximity to markets and competitive operating costs. This illustrates not only the strengths of the island but also its growing appeal as a vibrant hub for innovation.
A Turning Point for Entrepreneurship
The report, titled “2025 Ecosystem Scan: Catalyzing Entrepreneurship and Innovation in Puerto Rico,” paints a picture of an island in transition. It documents the transformation of a once-nascent startup community into a burgeoning engine of economic activity, characterized by resilience, creativity, and favorable policy frameworks. According to the report, Puerto Rico is at a “defining moment,” showcasing the potential to rise as an innovation hub in the Americas.
Growth in Startup Revenue
The survey mapped more than 500 active startups and surveyed 69 high-growth ventures, revealing remarkable revenue growth. Between 2022 and 2024, median incomes among Puerto Rican startups surged from $75,000 to $500,000, with average revenues reaching an impressive $1.45 million. Mastercard attributes this trend to what it describes as “broader financial sustainability and top-tier performance.”
Challenges in Accessing Capital
Despite this notable growth, access to capital is cited as a primary hurdle for many entrepreneurs. A significant 45% identified it as a “major or critical challenge,” with nearly four in ten stating they have never secured external financing. Héctor Jirau, Executive Director of Parallel18, emphasized that Puerto Rico’s biggest challenge is the lack of formal venture capital, which has stagnated around $74 million since 2021. The diminishing presence of traditional banking—reducing from 10 to just three insured banks since 2009—has further complicated the financing landscape.
Human Capital: Strengths and Challenges
Puerto Rico boasts a strong pool of human capital, as evidenced by the fact that 63% of founders had C-suite experience prior to launching their ventures. However, many startups report ongoing challenges in hiring technical talent, with software developers and business-development professionals being the hardest to find. This challenge can be attributed to the island’s ongoing brain drain, where skilled individuals leave for better opportunities elsewhere. Abarca Health CEO Jason Borschow articulated the opportunity that this talent challenge presents, suggesting that creating conducive environments could reverse this trend.
Agility in Adversity
The resilience of Puerto Rican startups has been evident through repeated crises, including Hurricane María and the COVID-19 pandemic. Innovative ventures like BrainHi, Raincoat, and Uva! emerged to address emerging demands, ranging from telehealth automation to AI-driven customer service solutions. Uva! co-founder Laura Tirado noted that AI technology has enabled a leaner operational model, which is essential as 56% of entrepreneurs cite rising costs as their primary concern.
Supportive Policies and Ecosystem
Puerto Rico’s unique U.S. territorial status, together with its dollarized economy and bilingual workforce, continues to attract both founders and investors. Incentives from Acts 20, 22, and 60 provide a competitive edge with benefits such as a fixed corporate tax rate of 4%, full exemptions on capital gains, and significant R&D credits. These measures have reportedly generated over 100,000 jobs and around $1 billion in net revenue for the government.
Emerging Industries: Fintech and IT
Fintech and information technology startups represent roughly 25% of Puerto Rico’s entrepreneurial ecosystem. The report notes that the growth of these sectors is driven more by innovation than by financing. Entrepreneurs are tapping into their creativity and forming strategic partnerships as key growth drivers.
The Role of Accelerators and Mentorship
Accelerators like Parallel18 and Grupo Guayacán play a crucial role in nurturing startups. Notably, 46% of startups reported receiving support from incubators, and 82% of founders benefited from mentorship—one of the highest rates in Latin America. This high-touch approach demonstrates the importance of community networks in fostering successful ventures in Puerto Rico.
Community and Networks as Key Advantages
The survey accentuated that community and proximity to markets are among Puerto Rico’s greatest advantages. Approximately 24% of founders identified the island’s entrepreneurial network as its major strength, while increasing involvement from the diaspora—particularly in mentorship and investment—further underscores the supportive environment.
A Vision for the Future
The Mastercard-Endeavor study envisions Puerto Rico as a potential testing ground for scaling innovation across the Americas. With over $1 billion allocated for broadband expansion and a commitment to achieving 100% renewable energy by 2050, the island’s ongoing digital and energy transitions could serve as catalysts for heightened entrepreneurial activity.
By fostering an inclusive, innovative, and sustainable future, Puerto Rico stands on the brink of a transformative upcoming chapter in its entrepreneurial journey. The strengths and challenges highlighted in the survey offer valuable insights into paving the way for sustained growth and development in the region.
