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Bad luck with investors?Bad luck with investors?Bad luck with investors?
Bad luck with investors?

Bad luck with investors?

Maybe this is why. Check what Gabby Cazeau, Matias Van Thienen, and Gabe Vasquez said about what they consider in founders before making an investment.
Regina Pernaz
Content Specialist
Published
October 27, 2022

When we asked Gabby Cazeau of Harlem Capital what she thought about most when writing a check to a startup, she quickly responded: investing is about people. 🫶

"There's the financial side of it, of course. But behind all of that is people. How they make decisions and how they feel. What are their motivations and their fears."

But it's not just finding anyone that's fine, I guess, and swiping right. Matias Van Thienen of Founders Fund said he gets really excited about an investment when there's genuine energy from the founder – the type that screams long-term vision and dedication.

"All generational companies come from founders that are doing their life's work and want to make their vision a reality."

So, Chris, how about we leave those flow charts aside for one minute and answer this:

When you think about your business, what is it that makes you tick?

Numbers are important and that's not questionable.

But let's just say that investors have developed a good nose for detecting when a founder is in the game just for the money or the status. Because it smells like a lot of bullsh*t. 🕵️♀️

And like hell they'll invest in somebody unlikely to ride the winds when the storm hits.

Yep, facing investors sounds scary. But we know you got this!

If you're not getting lucky with them, you actually might be needing just a quick fix on your approach.

📌 Here are 3 things you should double-check about your business and how you pitch it to investors. And trust us, THEY ARE paying attention to this. Because it's, like, their money, you know?

👉 Your why

  • Why are you building your company?
  • What's the vision that you're trying to bring to life?

If you have chosen your business out of a pile of ideas just because it was the least bad or because that's where the money's at, that's not the way, José.

According to Matias, that's a bad recipe for starting a company.

👉 Your company's why

  • What does your customer actually value about your startup?
  • If you reached PMF, how would that benefit your end user?
  • Do you know your clients better than they know themselves? And if so, what's their astrological sign?

Understanding not only the founder’s why but also the company’s why for the end user is essential when evaluating early-stage founders. That's from queen Gabby herself.

👉 Your pitching framework

There is a concept that's dear to Gabriel Vasquez, from a16z. It's the Idea Maze. 🌟

Basically, founders should know their market and strategy so well that they have an eagle vision of their segments – and know damn well how to get out of this maze, and even what walls to move if necessary.

"We want founders that have thought about the problem so well that there's nothing on the pitch I can ask them that they don't know the answer for."

According to Gabe, the best founders have clarity of thought and a framework for the key points they want to touch on.

That makes all the difference when pitching – especially to people that don't have a lot of context about your company. That's how investors like Gabe size up the kind of founder they want to back.

📌 Gabby, Matias, and Gabe talked even more about investing in Latin America at Vamos Latam Summit. They touched on:

  • How has the current market redefined their investment decisions?
  • Who invested in the seed round of a 9-year-old company?
  • What do they expect from the LatAm market for the next 10 years?

Want all the answers? Go find them out!

Watch the investors on YouTube
Listen to them on our podcast

The fellows ask

In our first Latitud Night with Felipe Mansano, attendees asked:

📌 What is the minimum runway that should be accepted in a startup? And what is an acceptable burn multiple?

It depends a lot on the market situation.

In the current market, it’s really important to have a minimum of 12 to 18 months of runway. Felipe advised founders to extend the runway and sometimes sacrifice growth because of the present fundraising scenario.

And what about the burn multiple?

Anything above a 2.5 multiplier would be really bad.

You should try to improve it before trying to fundraise – or even before scaling up your business.

👉 Latitud Nights is a fresh – and free – monthly event in which we invite some of our Explore Program's speakers to share their knowledge with the community.

If you crave this kind of info on a daily basis, why don't you become a fellow?

Learning + networking + meeting angel investors don’t sound so bad, right?

Apply to the Explore Fellowship

Before it's too late!

Hot News Ahoy! ⛵

🚀 Do you want to be a fintech?

Argentinian paytech Menta raised a US$ 6 million Seed round led by Base10 Partners to help B2B companies become fintechs.

🚄 Vixtra will move faster

Vixtra, a trade finance fintech based in Brazil, raised US$ 3 million in a pre-Series A round led by Valor Capital to accelerate the transaction volume in its payment and credit solution for international trade.

-> 🦄 Every time your friends subscribe to our newsletter, an investor becomes excited with an excited founder and they go and get excited together. So ask them to subscribe!

Stay tuned

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