Our model is to quickly identify the best ideas and entrepreneurs from the hundreds of companies available, put them though a short but rigorous due diligence process, offer them competitive, fair and clear terms and fund them immediately in progressive, milestone based tranches. We prioritize deal flow; our goal to be an integral part of an ecosystem delivering meaningful numbers of successful exits from the region every year. Our experience in Chile shows that the lack of seed level funds, an extremely long due diligence process, onerous terms and slow disbursement of committed funds kill promising firms that should have a high chance of success. We are determined to give entrepreneurs better options to support them in building success.

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Cost

Low cost is an immense advantage in building companies in Latin America. Engineers and designers are the first hires for any firm and are the necessary element in developing a competitive product in a rapid time frame. The average salary of an engineer in Chile is essentially a third the cost of the Valley, and they are readily available. We are interested in companies that are able to build sizable teams that are able to ramp up quickly with an idea, and turn on a dime when a pivot is necessary. A comparable Silicon Valley based firm will be forced to make choices and compromises as their resources will necessarily be more limited.

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Regional Expansion

We are focused on Spanish-speaking Latin America, with a combined addressable market of 300 million persons and a common language and similar culture. Two countries bookend the potential: Mexico, with a population of 111 million and strong ties and proximity to the U.S.; and Chile, approaching developed world status, with a stable legal and financial regime, a government supporting entrepreneurialism and a nascent and growing network of accelerators, incubators and angels supporting entrepreneurs. Together with Colombia, Argentina, Uruguay and Peru, these countries enable a large enough market for a startup growth path to success.

Companies that can gain traction rapidly in one market and translate that into expansion into other markets is therefore crucial. We look for companies that can dominate a single market within one year – and can then expand and dominate other key markets within two years of single market dominance. Our implementation strategy is fixated on this expansion, as it will enable exits on a much more rapid basis.

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Support

Our position as the gatekeeper between accelerator/incubators at the base and large institutional venture capital firms at the higher end is far more likely to yield higher returns, something like the model pursued by Andreessen Horowitz and Google Ventures. Like them, we believe that selecting companies conforming to a clear set of selection guidelines and then providing considered and consistent professional support and mentoring increases dramatically our chances of success. Thus we provide substantial follow-on mentoring in management, design, engineering, legal and other business skills through agreements with firms in the region as well as outside mentors and investors.