Ep. 315 How I Raised It with David Alvo of Impacta.vc

Who's the best entrepreneurs in Latin America?

Yeah, Mexican startups are getting better. Colombia is like the new trend. Argentine have the mindset that they can like really go global.

Hi guys. Welcome to How I Raise a podcast. The show we get an inside look at how real entrepreneurs and VCs raise capital for their businesses. I'm your host, Nathan Beckert, and today's episode is with David Alvo of Impact vc. Impacta is a Latin America VC fund and a accelerator. This one is fun because David is the man when it comes to the Latin America startup and VC scene and we dig into what's going on down there. Also some fun points on which countries produce the best startup founders and a lot more. If you're tuning into this podcast learning how to raise capital for your business, be sure to check out foundersuite.com if you're a startup or fundingstack.com if you're a VC or advisor. Both platforms will give you access to an awesome collection of tools for raising capital, including a massive investor database, a new Get Intro tool to get warm introductions to those investors, a CRM to manage arrays, a virtual data room to run due diligence, plus pitch deck hosting investor updates, email tools, and much more. Last but not least, if you enjoy this conversation and think someone else would too, please share it with them and hit that subscribe button to get all our latest episodes. Thank you. Now sit back and enjoy this chat with David. Welcome to How I Raised it, the podcast that goes behind the scenes with entrepreneurs who've raised capital. We uncover the tips, tricks and techniques they use to get investors to write a check, strap in and turn it up. Hi, welcome to another episode of How I Raised it produced by foundersuite.com and fundingstack.com today I have David Alvo of Impacta coming to us from Latin America. David, how are you and where are you? Good.

I'm excited to be sticking with you, Nathan. I'm in Chile. Santiago, Chile.

Very good. Well, let's just jump right into it. What is Impacta Impact?

This is a venture capital firm that invests and supports impact driven founders from Latin America. We invest, we have two active funds and we also support with programs around fundraising, around revenue, around expansion to other countries and also we do a lot of events. We have a huge event here in event in Chile and we also travel to all the tech weeks all over Latin America. We try to create connections between our network.

Yeah, I love it. Full disclosure, I go in every now and then and give talks to your Impact Accelerator. Program. I love all the people who are attend, they're so like passionate and exciting and excited. Yeah, it's. Don't take this the wrong way. It's almost like the stereotype of, of the Latin America, very passionate founders. You know, the energy is great, so it's really cool what you put together with impact. Let's pick apart little bits of the business. So maybe let's start with the accelerator. So talk about that a little bit.

Yeah. So I'm a previous founder and I also ran the most active accelerator MVC in Latin America for four years. And one of the things that I saw NXTP labs during between 2014 and 2018 and as a founder, I saw myself in many accelerated programs in Norway, in the US in Argentina and several places where I was that I talk about marketing and I still didn't have a product or I talk about structure and I really had the structure ready. And so I was losing my time. But since these accelerators were investing in my companies, I will go just to create that relationship. But I was wasting my time. Right. And I saw myself doing then later acceleration programs, this type of acceleration programs to more than 80 companies from Latin America. And I saw that, you know, on their faces and I thought, you know, this has to be some, it has to be different. And so the way that we do it is that we create programs that are challenge specific and the program is a playbook. So you can actually fundraise if that's your challenge. I need to fundraise. It's not something that you just take notes and then read those notes and say, okay, so how can I, how can I fundraise? This program is a playbook where we teach you, we give you missions that you can, that you have to do every single week. And you end the program with the round close with hopefully oversubscribe, but not always. But 70% of the companies fundraise after the program. So that's the type of programs that we do. And this program is mainly taught by me and people like you that know better than me and in some areas of the fundraising process and we're bringing like the best entrepreneurs to Latin America so they can actually pitch their playbooks on scaling on and different challenges that all the companies that I invest are facing. Right?

Yeah, I love it.

Cohorts of 100, 150 companies at the same time, all is online. And so that's, that's the way we became the biggest accelerator, accelerating more companies year over year in Latin America.

Okay, let's get on to those numbers. So 150 companies per batch. And is that once a year or twice a year?

That's once a year. The fundraising program. We also have revenue strategy program for B2B SaaS companies. That's around 50 or 70 companies each cohort. We also have an expansion program to the U.S. that's 15 companies. We actually do the trip to Miami and we also do other type of activities I would say to help our founders connect with their customers or talent investors. And so that's also a way to help companies.

That's amazing for these 150 companies. Is it the typical accelerator model where you're getting X percent and investing a little bit? Or is, or is it a different model? What's the model?

It's a different model. It's like a SaaS, but it starts and ends within the program. Right. So you pay monthly. And we take companies away from the program because they're not doing the missions and we can see that they're not going to be able to fundraise and they also can drop out. We give grants or, I don't know, to say that they don't have to pay for like 50% of the companies. They don't pay anything on this program. So we charge only the money that we need so we can actually run the program. We don't make money out of this. It's part of the strategy. We see more than a thousand companies every year and we cherry pick less than 0.5% of the companies to, to invest in those companies from the funds that we run. And it also creates a community and, and we, we also level up the, the skills of the founders so we can have a better and more solid ecosystem in Latin America.

Yeah, really interesting. So you had a thousand companies kind of applying or, or getting involved. You're taking 150 of those, they're going in the accelerator program and then you're investing, cherry picking the very best of the best. So very clever deal flow model for your, your fund. Right.

It's being copied now and it's good. And I teach the other, other business that I try to do the same. I tell him how we do it and how we, how we see the deal flow.

What, what are you seeing? And these companies are coming from all over Latin America, right?

Yeah.

Where are you finding the best entrepreneurs? This is gonna, I wanna, I want to stoke a little rivalry here. Who's the best entrepreneurs in Latin America?

Yeah, that's, that's, that's really one. So there's, there's I would say there's four main, I would take Brazil out of this because they speak another language. It's another way. And they, they don't need to expand to other countries. So they live in Brazil and they develop their companies within Brazil. Okay, but you saw, you have Mexico. Yeah, In Mexico you have the biggest market. And so the traction of the Mexican startups are way better than the rest of the countries. Right? You will see like thousands of users or tens of thousands of users in the first months and you will see like, oh, this traction is amazing. But it's also, you know, you can, you can extrapolate that to Chile that we're like 18 of the population of Mexico and that's obviously that's going to be a different traction. So that's, that's one thing Mexican startups are getting better traction. Colombia is the, like the new trend. And, and, and what we've seen in Colombia is that now you have the second generation of founders that went, they went through Rappi, they went through the like the hobby and the other unicorns that you have out there that were mainly, mainly, mainly Colombians working on those companies in, on early stages. And so now they're creating companies and they have now what they didn't have 10 years ago when I was investing also in Colombian companies. They had now a global vision and regional vision from the start.

Interesting. Yeah.

Before, beforehand they, they will, they were like Chileans. We also Chilean have a problem that we, we don't, we don't believe in that we can actually do like level stuff. There's more and more. But at the beginning we didn't have that mindset, right. And Colombians didn't have either at that time. And now they, they have it. They had the mindset, they know how to create companies and build those companies into 1 million and 10 million recurring revenue. And so that's a really good thing. And they have 30 million people in Colombia and they also have now a stronger ecosystem. They are now working together with, within accelerators, incubators, VCs and other, other, you know, players for them from the ecosystem they're working together and you can see that they're doing better stuff and they're getting traction. That's really good things. That's new. Three, you, I will end with Chile in my country. And, and three, you have Argentinians. Argentinians have the mindset that they can like really go global. Right. Actually I just had a conversation with Argentina that said I was in Guatemala last week, this week and, and he said to me, the best way to make money in this world is still is to buy an Argentinian for what it's worth and sell it for what they, they think they worth, right?

Yeah, that's funny.

But because they, they are, they are like the best of the world that always in everything you say. But do you know? I don't know, I don't know. Do you like to drink whiskey in Argentina? Yes, we're the best. They're all drinking whiskey. Why? They're always the best. That's their mindset. They have Messi, they have Madonna, they have that. And so that's the mindset of the Argentinian. But in the previous years, the last, last 10 years, they didn't have like a good economy, really bad economy to do business, right? And so that you have a mindset, you have like the skill and the mindset. So that's a really good mix. But they're really good, right? They have really good education, public education. So everyone, everyone can, everybody can learn at a good quality. They have really good mindset, but the ecosystem is not that good. And so they were going to different countries, they were going to Colombia, they were going to Mexico, they were going to the U.S. they were going to Europe to create those. So you don't see many companies in Argentina except for obviously Mercado, which is like the biggest company in Latin America. You won't see many Argentinian startups doing like great stuff. But they, because they were Colombian startups created by Argentinians. But in other countries, right? And in Chile happens the other way around. We have the best ecosystem. We have more VCs per capita than any other country. We have the government supporting early stage companies and funds. You have like really there is. So even if you have a government from the right or the left, you will see that institutions are reliable and they don't change. And so you can actually plan, right? Yeah, in Argentina it was really difficult to plan and now they're in a better position. Argentina now with Melee, and they're really in a really good position. I would say like in two years from now we'll see a really, really, really great Argentinian entrepreneurs. And that's for sure. For sure. And in Chile we have the best ecosystem, really professional, you know, we like to do business, but we don't believe in ourselves as much as the other countries. And so we, we many times we play small.

Yeah, interesting, that's fascinating. Yeah.

So what am I looking now? Chileans with global mindset, Argentinians with previous startups so they know how to do stuff, creating new stuff. Right now I'm looking Colombian companies to invest right now because this is the best moment to invest in those because they don't have many VCs and they have many new companies and so that's a good opportunity for us. And also Mexico, obviously, it's, it's a, it's a great place to see companies because that's like the only country besides Brazil that can actually play the BC game within, within one country.

Really fascinating. That's a great kind of synopsis of, you know, power players in the startup world. I love it. I can see a visual of like the Four Horsemen. Right. You've got the Four Horsemen in those four countries. And does your, your 150, 150 companies that are part of the program, are they pretty equally distributed amongst those four or is it pretty weighted on Colombians or, or what?

Yeah, it is pre weighted on Chile.

Yeah.

Because my network and many of my, you know, half of my team is in Chile. Yeah. And so we, we move that more. But it's, it's being weighted every time. Every year is less Chilean and more Latin American. We have like, I think this year is from 14 different countries doing stuff in Latin America. We have people from Europe, people from the U.S. but I would say it's like now it's like 40 Chile and, and maybe then 20 Mexico and. And then you'll have Colombia, Argentina, Uruguay. We have a lot of Uruguay because one of my partners is from Uruguay and, and I've been traveling from. To Uruguay and we also have a lot of Central. From people from Central. Is Central America. Now America from Central America. Yep. Because they don't have many accelerators and the only way that they can actually learn in Spanish, it's, it's within with our program.

Yeah. Anything happening with like Peru and Bolivia or are those just more tourist. Tourist focused countries without startup scenes?

I don't know. Uruguay and Ecuador are the countries that are behind the other countries that I, that I told you. But I think, I think they will need a few more years to be more consolidated with more VCs and growth capital and everything that they need. Yeah. And Bolivia, it's, it's, it's really good now because you have Marcelo Claude. You know Marcelo Claude.

I do not know who's that.

He's, he's a guy that created like two companies that are the best of the world. He created T Mobile and another like Bright Star to like huge companies. Huge. And he was, he was part of Softbank I see. I think. And now spite of Bicycle Capital, they, they manage billions in venture capital. And he's from Bolivia and now he's, he started to, to create things for Bolivia and his mission is to build Bolivia. Right. And so there's a lot of attention in Bolivia. I think in the coming years we'll see more development over there.

And interesting. Are you finding, you know, you're investing in some of these companies too. Are you finding a lot of variation in terms of valuation? In other words, like our Colombian companies, Cheap Mexico companies, more expensive when you're, when you're actually negotiating like terms.

Yeah, yeah. So Argentinian companies, they, they're worth like a million dollars before they start, right?

Sure. Right, yeah.

Because of the mindset, right? Yeah. I'm seeing now a more because venture capital, we've been trying to copy Silicon Valley and the US market. When you see you create your Excel as a VC and you say, I'm going to invest in 20 companies, one is going to be a big hit valued at 2 billion and that's going to pay the whole fund in Latin America. With the exit size that we have in Latin America, you need like more companies to be sold so you can actually return at the valuation that you see on, on precedent seed, like 5 million and 10 million. Right. And so what we're seeing now in Latin America, medica my generation of venture capital, is that we have to, we have to have more exits and we have to invest at lower valuations at the beginning, right? Yep. And, and, and I've seen in, in Chile, just in Chile in the last month and a half or maybe two months, we, we've, we've had like six exits or seven exits and it's like, ah, you have an exit. Yeah. But if you see the return of the last investors, they lost money, right? Yeah. And the first investor, they, they made like 5x. And with a 5x, I'm not doing anything as a VC, right. Even if I invest in the first stage. So what I'm pushing also in this program that with 100 and 150 company in the cohorts, I'm telling them we don't need much more money to create good companies. You don't need to raise 2 million, just raise less at a lower valuation and bring the people that can actually help you go to the next stage. And because the exit at the end, you will have an exit of 100 million. And if you have 100 million exit, you, it's, I can applaud you for a month. You Know, it's really, really, really good exit in Latin America. Right. So the only strategy that will work if you're Investing like a 10 million valuation, the first round, you have to sell those companies in the US or in Europe. If you want to sell those companies in Latin America, you need to, you need to start at a lower valuation. And I think I'm getting lower and lower, lower valuations because they understand that they need to bring investors. This is, there's less capital. We need, we need, we have more opportunities and we invest in better opportunities. And so they realize that they cannot go a year and a half trying to raise at a 10 million valuation. They have to raise at a 5 million valuation, but much quicker with money in the bank and go to the next round.

That's interesting. The whole dynamics are a little bit different from, to summarize what you're saying, versus Silicon Valley, which, you know, most venture funds are betting on or, or betting on, they will have one giant unicorn that returns the whole fund. You're a little bit more like spreading bets. Lower valuations, lower exits. But enough of those kind of makes up for.

But we are, we're more resilient. Think about this. I started my fund in 2021. I invested in 14 companies. You know how many died from those companies? None.

One. No.

Two.

No. None, none, none.

One was dying. And now it's a, you know, a zombie that is making more money than they made when we invested. So it's, it's still not dead. And so we're like more resilient. We.

Sure.

So it's, it's.

Yeah.

Failing is worse seen here than in the U.S. yeah, in the U.S. it's. I failed. So great. What did you learn? What do you took from that? Here you failed. It's like it's a really bad thing. And so we try not to fail and we're more resilient with those companies.

Couple questions because this is pretty interesting. Just to understand the dynamics of that market. Are you finding. Two part question. Are you finding that most of the startups that are applying and that you're accepting are, are building a global business from day one with plans to expand, you know, globally or to the US and related to that a little bit, are you finding that a lot of the companies are like clones of us or Silicon Valley companies, cloning them for the Latin America market, but they're focused more on the Latin America market? Do you understand the question? I guess I could flip that around a little bit too. Right?

Yeah, yeah, yeah, yeah. So I would say yes, you have global vision of the founders now, but I would say more is a regional vision because most of the problems that we're solving, that we know the problems better our, our problems from Latin America and you don't have those problems. Right. And so that's, that's, I think that's the, the most seen thing is that companies that start from day one to be regional, regional companies. You know, it's really easy. I'm a regional company and I'm, you know, I'm structured only in the US In Chile. And what do you do with your flames from 14 different countries? They pay on, you know, by stripe, via stripe or whatever in the US or they transfer to Chile and I do an invoice from Chile and they pay the taxes over there. So it's not. You can be regional without having a structure, you know, you know, structure in every, each of the countries that you're, that you have clients. So that's one thing that it's better and better for us. Right. So we can create regional companies without all the hustle.

And you like if someone comes to you pitching a regional focus business like we're solving a problem for Latin America market. It's not a U.S. problem necessarily. You like that you'll invest in a.

Company that's absolutely, absolutely, absolutely yes. The other type of companies that you see that you have a really good market is the Latin Latin people in the US it's all the people that speak Spanish. That Spanish speaking population in the US is huge and they have more money than Latin Americans. So that's a better market to pursue. And those are problems that we, we understand because that's, that's my cousin living out there in the US or my aunt or you know, and so we can connect to that. But we here are really good at taking, taking technologies from the US So you would say there's foundership and there is a software software Parafundadore Capital. I trust more on founder fee because it's. Thank you. It's in English and It's from the U.S. it's probably better, right? So if there's a problem that you have and we have, we're more likely to use your technology. So we have over, we have WhatsApp, we have Facebook, we have. So we're not Chinese, we're like doing our own stuff. We're Latin America. We're really easy to conquer. So we're like everything that comes from abroad, it's, it's really welcome and has trust by their own Right. Even in the pictures, you. You would say like, hi, I'm David. I'm from this company and we already have one client in Europe and one client in the US you don't have to even say the name. That's like huge. You have a client in the US And Europe and you. If you say, I have a. A client in Bolivia and the other one is in Paraguay, it's like, how much money can you. So. So we trust more on stuff from abroad. So if you have a problem that it's outside and in here, Latin America, we will probably use your. Your solutions.

Yeah. Interesting. Okay, one more question on the rivalry. I like to get this rivalry going. Which country has the best engineers and which country has the best, like, hustlers, you know, go.

All right, all right, all right.

I don't want to get you in trouble, but I'm putting you on the spot anyway.

The best engineers, yeah, I would say are in Chile, but they're not cheap. So if you're looking for, you know, a good place in terms of technical and price, you will look for Argentina in Colombia, maybe. And that's what I would say. And the other question was the hustlers.

Hustler. Who's got the more hustle. Hustler culture.

Yeah, yeah. I would say Argentina, they have so many problems that they are really used to get to solve problems. And then. So here it's. It's. It's easier. It's not easier, but it's more. Is let. Less adrenaline doing business. Right. So if you say, okay, let's do this, you will probably do that, Right. And in Argentina and other countries, maybe let's do this and then, okay, let's sign. No, no. Maybe. Maybe I'm thinking about doing something else. Let me tell you next week. And maybe I'm thinking about it. So it's. It's more difficult. And they are obviously more used to that. Right? We love to work. You will see 10 years. I'm at a cowork right now. It is Friday, and I'm sure that at 7pm you will have like 40 people still working out here. I stay until like 2am on Tuesdays and I, and I, and I see people working out here. We love to work and, and maybe Brazilians, they love more the beach. And Argentinians, maybe they love more the, the parties or football. And Colombia's more. They like to dance more. And so they have other interests.

I love it.

I love it.

Yes. So Chileans have the best work ethic and.

Yeah, absolutely. Yeah, yeah. But it's a small country.

Yeah, very cool. I. Yeah, I've been to Argentina and Chile, and I love it. I mean, they're both great places. I haven't been to Colombia. That's on the, on the to do list. Very cool. Maybe talk a bit. I want to get into the fundraising about raising your funds, but maybe just talk for a second about the. I guess it's the Miami soft landing program. You're helping these companies kind of make the jump over to us or just understand the US Market or what? You tell me.

Yeah, so what I was telling before, the exits in Latin America are not big enough. And with our first fund, we're trying to prove that doing well is the best business you can do. So we actually need, like, really good returns. And so we need to create this, help these companies in Latin America invest in those companies where they are here with smaller markets, small, smaller caps on the safe, and we help them develop their company and, and in the US So we can have the exit out there. Right. And so we have CORFO here, which is an agency from the government that was supporting accelerators, taking companies from chile to the U.S. and so we took that grant and we're helping companies go to the US early stages. So many of the companies, they come back and they see, you know, they spend $10,000 and they say, okay, this is not the place for me. Instead of spending a million of a 3 million round and then realize that it's another place. So that's. That's one thing that they're doing, but where. What we are doing is building our connections to the US and so I travel to you two times a year to the US My venture partners and part of my team are traveling all over the US So we can create the connections. So when it's time to sell our companies, we have the right connections out there to. To sell those companies. That. That is strategic. Strategic part of creating this program in the US and also because Miami, Miami is the capital of Latin America. Right. It's the good thing about Miami is that it is close to the U.S. right?

Yeah, yeah. Like on. On your website, you say, where did. I just saw it? Miami is the new Silicon Valley of entrepreneurship, which you hear a lot about. I mean, especially during the pandemic, Miami had its spotlight moment. Right. Where a lot of VCs were moving to Miami from Silicon Valley. I think some of them have moved back. I don't know. But, you know, there's definitely a lot of action going on in Miami, which is Pretty cool.

And it's also, you have a really huge Latino community. And so you're from Chile, you're going to Miami. Hey, I arrived here. You will be welcome. And you will be, you know, you will have open doors. And it's easier to start in Miami than other, other places where you don't have many connections and you don't have a network of Latinos helping you. Right.

Yeah. Miami is just a fun town too. So it's like. I see.

That's another thing. That's another thing that we love about Miami.

Okay, one more question before we talk about raising your fund. But you mentioned 70% of your accelerator companies raise capital of that. What percentage raise capital from outside Latin America? I guess what percent raise capital from us? Or is it pretty much all of those guys are Latin America?

No, I, I would say maybe 20. Maybe 20 of these, these companies fundraise from. From VCS from abroad.

And, and what are you finding? What's the pattern of those 20%? Are they, they speak fluent English, Good English. Okay, what else?

Yeah, that's. And they have an opportunity in the U.S. because if you're looking for a VC based in the U.S. investing in the U.S. if they're investing in Latin America, those are VCs that see the opportunity in Latin America. And most of those VCS are later stage. And so for the type of companies that I'm in, I'm helping. There's not too many VCs from abroad investing in early stage in Latin America. Really. Really A few. Right. And so the type of business that they're, they're fundraising that I'm thinking about, these companies, they, they are from the US Investing in the US and so these are the type of companies that really have a market opportunity out there. Right? Yeah. And. Or like angels from the U.S. but that's. The trust is in the founder. I, I trust you as a founder in Latin America solving a problem that I don't know about, that you know about. And I'm investing in, in you, not, not the company because I don't know the, the market. Right. It's a really different market, the Latin American market to the US market of.

Are those 20%, are they typically setting up an office in the US before they get invested or, you know, any other patterns you're seeing, they speak good English, they're solving some global market. What else?

So accelerators, I would say that's the only way that you can actually go out there, while when you are invested from, from there, from learning, coming from the U.S. but no, many, many of this. So I'm, I'm not sure I will have to look to see if there's a trend.

Yeah, yeah.

I would say, I would say if you're invested by a VC firm invested in, in the US you have to create your, your you know, headquarter or an office out in the U.S. are.

You seeing, you mentioned accelerators. Are you seeing some of your companies graduate from your program and then go on to Y Combinator or techstars or some of them, you know. No.

And that's one of the things that we're trying to do right now to create those connections so we can, you know, create intros for these accelerators in the U.S. it's, it's every entrepreneur, we teach them, you know, look for the accelerator that is better for you and the better in the best market and go out there and apply. So that's, they go out where they think they should apply. We're not like helping them on. Okay, these companies are really good for textiles this generation. These companies are for Y Combinator and we, and we try to create those connections. Well, we're building that. So if you're from Y Combinator or Plug and Play or Tech Stars or whatever, this accelerators from the US and you want to receive entrepreneurs from Latin America, contact me, look for me and I'll, I'll, I'll give you each of, in every company that it's, it's good for you.

You should also talk to Wave, Wave Accelerator in Tampa Bay. They have a lot of, I do some talks there and they have a, a lot of good lat. Latin America focused or you know, they're in Florida so there's just a natural concentration of Hispanics and stuff. So. Right, last thing, give any tips for just in case there are any Latin America startups listening that are interested in pursuing like US Investors. Do you have any tips? One or two tips for them. Other things we haven't talked about or have we covered?

Yeah. So you have to speak English. Yeah, you need to, you need to tap the market. So for example, using funders feed in founders that you have, I don't know how many yet, but 120,000 investors. That's what I remember from the last, from last time.

181,000 investors total.

Yeah. Yeah. Thanks. And so obviously if I'm looking for investors out in the US I will look for a database like that with a software that is created in English and so I can actually run as a US based company. Right, that's, that's one thing. And the other thing is to use your network and create your network and create connections because you, you will need. So there's three things that every entrepreneur needs to be successful. Capital, connections and knowledge. Right. And so in connections, if you don't have connections, you have to travel out there and create connections and be, you know, kind to people and help them, you know, and, and create those connections so you can actually open the doors that you need to be open for your, for your business.

Yeah. Good stuff. Very cool. I like it. Let's talk about raising your fund. So you've raised two funds and the first fund was a $7 million fund and you mentioned that was from 73 different LPs and then second fund was a $5 million fund from a single LP. So maybe talk about doing those. Why did you go through so many LPs? The first one, why'd you go single LP? The second one. Just share the story of raising those two funds.

Yeah. Yeah. So when I decided to after, after these two impact driven companies that were doing really well, I decided to create this fund and I started with my fundraising process the same way that I did for my previous startups. Right. So that's list of LPs, all of my connections from LinkedIn, all of my connections on WhatsApp, all of my connection from school, from college, from previous works and all on one list. And I started, you know, first batch of people that I'm going to invite. And so I run up my typical run fundraising process for startup but this time for my, for my fund. And as a startup you will, you will reach VCs, accelerators and many types of investors. And in this case I only had like high level individuals. I didn't have like too many family offices and fund of funds. Not there's. There was no way and more institutional investors, they don't invest in such smaller small funds. So that was a waste of my time. Yeah. So I ran my process. I started with my, my, my low hanging fruits and I made the first close at 2.5 million. Right. Really good, really fast. One of the things that I did to, to, to make that first close and invite people to, to see the business that I was, I was creating, I warehoused which is a way that you can actually invest not money in your fund, but shares of a company that you previously invested. And I had my shirts in Butterfly. Butterfly was at that moment, it was not unicorn, but it just raised the series B. And so I warehoused like 30,000 shares of that company at A series A valuation. So I was giving a markup to all of my investors from day one. And that company was really, really, really sexy at that time. Right. And so I, I made this first close giving away a portion of my shares at a previous valuation of Butterfly and doing two other warehouses of other two companies that me and my partner what had in our personal portfolios. And that gave me the first close then I had. I was lucky enough that this Butterfly company became a unicorn right during my fundraising process that I already committed to to invest at a serious A valuation. So I was giving a 78 x 8 times investment on that investment and I got a second close of 2 million. And then the Silicon Valley thing happened and everything went down and I still kept the fundraising process harder and harder. It take me five more meetings to, to fundraise half of money in the same time was really hard, 10 times harder to fundraise. And so I, I kept going, going and, and I realized later, not soon enough that the best way to bring more piece to my fund was to ask for introductions that for the current LPS that I had in my fund and I was not taking care of that. And so I ended up fundraising 7 million with 73 LPs where 33 were introductions from the previous LPs. Right? Really huge effort. I pitched to more than 250 potential investors. Even though 73 out of 250, it's a good number, it's not bad. But yeah, it was a huge, huge effort. And the way we saw ourselves is that so this is a really, really difficult job to fundraise. And so we need to position ourselves in a place where people will come to invest and they will need help. So we position ourselves as the best networkers, the best accelerator or the biggest accelerator and the most purpose driven VC in Latin America. That was our position and everything that we built was around being there so we can, when we need to fundraise the next fund, we will say we're the best at this and this is the most important thing today to invest in the companies that the planet will invest and help the founders doing do the best things and have the best connections from Latin America. And we were doing that and one guy came from Mexico and said, you know, I was just accepted 5 million to invest in early stage companies and we want to support these companies with connections and events and acceleration programs and we think you are the best. Can you invest my money? Three meetings. Three meetings, five minutes.

Wow. So really just go into a little more detail on that. This, this guy was. How did you get connected with him or how did he hear of you?

A company from my portfolio was invested by, by this fund. They did at the beginning of their. They're an ngo, a huge NGO from Mexico. They work with, with low income families. They started investing in Latin America. Then they stopped. They started investing only in Mexican companies. They started doing more late stage, not late stage versus A and B. Right. And they would invest in tickets out there and then decided to come back to invest in Latin America in early stages. And when they made that decision, like two months before that, I was introduced by our, our company that we have in common. And I helped the company, I helped the guy, you know. Are you interested in Chile? Yes, we're thinking about doing things in Chile. And I said, you know, come and I'll present you to everyone that you want to meet and asking nothing in return. I was just helping this and this fund that they were investing in later stages, series A and B, just to create that connection. And maybe one of my companies in my portfolio will be later invested by them. So that was, that was my, my intention to, to help this guy. And I helped the guy come to Chile. I organized a really good lunch with really good entrepreneurs and guys. We had fun. And that was, that was my connection. Then he came later. I just, I just helped him with one introduction, with one meeting. That was it. I was just helping help him. And the third time we, we met, he was here like, hey, you have half an hour, I need to speak with you. All right. And he told me, you know, I have this money, I need you to invest. Can you do this?

That's amazing.

I said, that's it? I said, yes.

What's the name of the, the fund or the LP or if you can.

Disclose it, it's yeah, Impact Ventures. PSM is stand for Promotora Social Mexico. Okay.

Huh. Very interesting. And going forward, I mean, you can't talk too much about the next fund, but are you thinking of doing another single lp, a combo? Like, where does this go? You know, how do you think about like LP constitution and makeup for, for next funds?

Yeah, yeah. So we can run a process of pitching a lot of investors. We can, we can do that and we also can convince like big tickets, like 5 million tickets to invest in our funds. So we, we proved those both things. So we do a mix Right now the type of LP is different because in the, in my first fund we had a lot of high net worth individuals or you know, people invest in 25k 100k, 200k. And now we're for raising a bigger fund. And so we'll, we'll try to, to invite more families, more institutionals and obviously fund those funds from all over America, including, including the U.S. yeah. And we'll invest in the best type of companies that we invest in. The first fund, the first fund was really agnostic. We invested in really different problems being solved by different type of entrepreneurs. And we know what, it's working better and that's the type of companies that we'll invest in. The next fund. Yeah.

I mean in some ways it's almost like. I don't know if this is part of your pitch, but you're almost like an index fund on the Latin America startup ecosystem. Right? You're investing in your fund and you have a big funnel of thousands of companies applying. You're accepting certain amount, you're investing the best of those. So it's kind of like a index fund of Latin America. Are you, do you have competition? Are you the only game in town or are there other sort of Latin.

Yeah, when we started we were really unique. Now we have, we have a. Many VCs that are early stage. I've been helping them also. They're part of the VC lab, you know the VC lab. Yeah, yeah. So we have, I, we had a lot of Latin American GPS going, going out there and part of this, I've been a mentor out there and so they're, they're trying like not to copy but try to do what works. And so they have. Now we have a lot of VCs doing programs so they can have a deal flow. Right. And that is happening right now in terms of impact. We, I, I'm also an LP and the other funds that are doing impact also. And so I'm really connected with these guys. But I think we're unique because I'm, I'm the only VC that is in this space that is a previous founder and so, so I had that experience and, and how to run companies and how to grow them.

Yeah, very cool. I like it. Well, we're almost out of time here. Do you have any. This is the question I love to close with. Any other tips for Latin America founders that are looking to maybe raise capital either from Latin America or from abroad? Any. Just other tips we haven't covered or what advice would you give your younger self if you were doing this all.

Over again and go for it. Perfect. All right, so advice for founders in Latin America. So we're really new in this game and so there's a lot of founders that they think this is sexy in terms of, oh, they race around and they're, they think this is a great life. This is a really a life that you will be doing more effort than anyone else, right? And so you need to understand that that's one thing, the other thing that investors are not like investors. We're not a category. You will need to understand which type of investors are incentives. You know, who is making the, the call, who is there, who is the money coming from. You know, it's the angel is really different from a vc, from a corporate, from a family office. And so you do the research, go to acceleration program that teaches you, teaches you about fundraising. You know, all the content that you have on your social media is really good too. So if I don't understand anything about this industry, I need to really understand that because this industry is about fundraising, you know, burning money and take big markets in a short time. And if you want to play this game, you need to understand the rules. And so understand the rules before you play the game, right? If not, you're gonna lose your time and probably someone else's money. That's, that's my tip. And what, what's the advice that I would give myself? I think there are two things. One is that you don't know everything, right when I started it was, I was really self confident, but too much in a way that I wouldn't be looking for advice. I will take an advice, but only if someone gave it to me without asking and that really made sense. And now I'm really, I'm really humble in terms of, you know, I think that my idea is a good one, but I need to speak with someone else that already did what I'm trying to do. And you have enough entrepreneurs in Latin America that I really did. So and, and people like to help. So my advice is, you know, every time you're doing something that is going to be challenging, this is the first time you're going to do it. Go some for go, go find someone else that already did it and ask for help and they will get that help and it will save you many much time and effort and energy to do the things right. That's one thing. And the other thing that I would say is it's not about money, it's about how much you can give of what you have. And so I found myself seven years ago and I would love to be myself. I'm being myself now, but I was trying to be someone else for many Years and trying to make money, because I thought that was the success of life, and it is not. Right. And so my advice will be, find yourself, and once you know who you are, give that for free to everyone and you will receive more than you. You will be giving.

That's interesting.

That's.

That's great advice. I haven't had any. Anything like that on this show, so. That's great. I love it. I love it. All right, my friend. This is super fun and interesting. I love listening to the. The different. The countries, you know, Mexico versus Colombia versus Chile versus Argentina. It's always pretty fascinating stuff. This is great. If people want to learn more, it's Impacta vc, right? Is that the best place to send people in? Impact vc?

Yes. Yeah, that's it.

So there you can learn about your programs. You can. I believe you can apply, right? Is that where people apply?

Yeah. Yeah. You can apply to the programs. You can go to the event that we have in Chile. We're organizing the Tech Week, and we also have these funds running and trying to invest in the best companies solving the biggest problems in Latin America.

Yeah. Very cool. I love it. I'm gonna make it down there one of these. One of these times and. And see it live. I don't know if I can make it.

Can we have it? Can we have you here?

I would love to. I would love to. I gotta make it happen. I gotta find a excuse. But yeah, it'd be great. It'd be really fun.

Maybe next we can organize it. Maybe we can organize for next year and we'll. We'll find a good excuse not just to have fun, but also to do business.

Exactly. I love it. No, it's cool.

All right.

Good Impacted vc. David, thank you so much. Super interesting. I'll catch you after your next fund and we'll see how the. The models evolved and see which company or see which country is on the ascendancy and which ones, you know, declining. We'll see how that's changing. So appreciate it, my friend. Thank you very much. Over now.

You too. Take care. Bye. Bye. Bye.