By VINOD SREEHARSHA


MENDOZA, Argentina - While the Buenos Aires stock exchange was tumbling to a five-year low in October after the government announced it would nationalize private pension savings, Felix Racca was 960 kilometers away, coolly discussing the prospects of a start-up with Daniel Caselles.


Mr. Racca had provided the seed capital for Mr. Caselles’s company, Authen- Ware, which makes biometrics software with security applications for banks and insurance companies.


To outsiders this may seem like an unusual time and place for entrepreneurship. The pension grab was seen as an admission that Argentina might not meet 2009’s debt payments, approximately $20 billion.


After the government’s 2001 default, lack of access to credit became a way of life here. The country remained largely cut off from global capital markets and foreign investment.


As a result, Argentine entrepreneurs started looking inward, and over time created a nascent start-up ecosystem with local venture capital funds and well-funded investors.


According to the 2008 Venture Capital Observatory Report, $25 million was available last year from those funds and investors. Gabriel Jacobsohn, the report’s author and a business professor at the University of Buenos Aires, expects that figure to hold steady this year despite current economic uncertainty.


The volume is small, much less than 1 percent of Argentina’s gross domestic product, but it represents a sharp cultural shift. In the past, family inheritance and government contacts often determined who started a business. Now, slowly, Argentines are beginning to trust and invest in each other.


Several of Argentina’s new financiers began their own start-ups during past crises and not only survived but thrived, with little support.


Mr. Racca is one such veteran. He and his partner, Emilio Lopez-Gabeiras, founded Intersoft, Argentina’s most successful software company, in the early 1990s, surviving hyperinflation, stagnation and multiple currencies.


Mr. Racca says he wants to ensure that his compatriots“do not have to go through what I did.”

A catalyst for the evolving start-up culture here was Endeavor, the United States nonprofit that fosters entrepreneurial networking in the developing world. Endeavor’s first success was in Argentina 10 years ago, just before the country’s last financial collapse.


Today it remains a strong presence here. But the entrepreneurial ecosystem here is now entirely locally run, mostly by people with middle-class backgrounds.


The founders of Globant, an information technology services company based in Buenos Aires, estimate they will take in $40 million in revenue this year.


Indicative of the changing values in Argentina, Alejandro Mashad, Endeavor Argentina’s director, said,“Globant’s four founders could sell their company today and each have a private jet, but they want to build a company in Argentina.”

Google, a Globant client, cited Argentina’s emerging entrepreneurial spirit as a justification for its decision last year to base its Latin American operations in Buenos Aires.


Alberto Arebalos, Google’s Latin American spokesman, says this developing culture“will not change despite the ups and downs of the economy.”

An Argentine, Mr. Arebalos listed some of the tumult that Argentine business has endured in the last decades:“We have had at least five or six different economic plans, with completely different politics, a closed economy, an open economy, privatization, nonprivatization, a fixed dollar, a floating dollar, a controlled dollar, an uncontrolled dollar, brutal devaluations, increases in tariffs and frozen tariffs.”

The lesson, he said, is “one goes nuts or one becomes a survivor.