Investment strategy- 101 on VC fund raising for lat am

transcript

BRINGING THE ENTREPRENEURIAL SPIRIT TO EARLY STAGE INVESTMENT IN LATIN AMERICA

VANESA KOLODZIEJ | MANAGING PARTNER | @vanesak www.nazcaventures.com @nazcaventures

The Art and Science of

Fundraising vanesa@nazcaventures.com @vanesak www.nazcaventures.com @nazcaventures

ABOUT NAZCA VENTURES

•  Entrepreneurs’ Fund

•  Santiago and Buenos Aires-based

•  5 Partners, All Entrepreneurs

•  LPs in Latam and US

vanesa@nazcaventures.com @vanesak www.nazcaventures.com @nazcaventures

OUR TRACK RECORD •  Started 7 companies

•  Sold 3

•  Participated in 1 IPO

•  2 Latam roll-outs

•  Have done 10 investment

•  Founded/ lead 2 main entrepreneurial NGOs in Lat am

PROFESSIONAL INVESTORS

•  Accelerators

•  Angels (Individual or Groups)

•  VCs

ACCELERATOR

•  Fix time, money, %, terms

• Mentoring/ Contacts

•  Demo Day

ANGELS

•  Their own money

• Much time/ contacts/ industry expertise

•  No structure

• Other people money

•  Contacts/ Portfolio

•  Structure

•  Follow on

•  Asset class with the higher level of risk

•  Limited Partners: write checks but do no add value

• General Partners: write checks AND add value: management

FUND’s 101

•  Philosophy

•  Partners

•  Rounds

•  Portfolio

•  Investment Time

PARTNERS

•  Limited partner: add any value?

• General partners: what are their domain expertise

•  Payment: Management fee 2% + carried interest 20%

•  Brackets of returns

FUND’s RETURNS

•  Portfolio approach: 90% will fail

•  30/30/40 investment spread

•  Potential for home run

•  1 company would pay the whole fund

MATERIALS

• One line

•  Elevator pitch

•  Teaser

•  Deck

•  Financials

STAGES •  Intro

•  Teaser

• Meeting

•  NDA/ Financials

•  Due Diligence

•  Non Shop/ Offering Letter

•  Term Sheet/ Convertible Note vanesa@nazcaventures.com @vanesak www.nazcaventures.com @nazcaventures

INVESTMENT READINESS

•  Legal Entity

•  Bank Account

•  Shareholder Agreement

•  Lawyer

•  Accountant

•  IP Fillings

EQUITY INVESTMENT

•  Valuation Previous to Investment

•  Purchase of Newly Issued Shares

•  Term Sheet, Stockholder Agreement

• Minority Protections

•  Board seats

CONVERTIBLE DEBT

•  No Valuation

•  Issue of Time-limited Debt

•  Convertible or not in Next Round

•  Cap, Interest, Discount, Expiration Date

TS vs CN •  Takes more time

•  Valuation

•  More expensive

•  More protections

•  Bigger deals

•  Faster

•  No valuation

•  Cheaper

•  Less protections

•  Smaller deals

NEGOTIATION POINTS •  Common or preferred

•  Seniority

•  Interest

•  Vesting

•  Golden Parachute

•  Stock Options

•  Board Seats

•  Pro rata

•  Participation

•  Termination

INVESTORS’ SOURCES

•  Angel.co

•  Thefunded.com

•  Lavca.com

•  Crunchbase.com

•  F6S.com

WHAT VC’s LOOK FOR

•  Huge markets

•  Competitive advantage

•  Business + Sales + Tech

•  Recurrent revenues

•  Economy of scale

•  No capital expenditure

HOW VALUATIONS ARE DONE

•  Growth Potential

•  Market Size

•  Market “Hotness”

•  Number of Competitors

•  Money the company needs

•  How much will needed next

•  % owned by previous investors

•  % wanted by new investors

VC’s IN LATAM

ACCELERATORS

QUESTIONS?

ABOUT NAZCA VENTURES

•  Entrepreneurs’ Fund

•  Santiago and Buenos Aires-based 5

•  Partners, All Entrepreneurs

•  LPs in Latam and US

•  Starting Early 2013

OUR TRACK RECORD •  Started 7 companies

•  Sold 3

•  Participated in 1 IPO

•  2 Latam roll-outs

•  Have done 10 investment

•  Founded/ lead 2 main entrepreneurial NGOs in Lat am

HOW WE INVEST

•  Technology (B2B mostly)

•  No copycats

•  Regional/ Global Potential

•  $250-$750k Co-investment

WORK WITH THE BEST LATAM ENTREPRENEURS WHILE CREATING VALUE

FOR INVESTORS, ENTREPRENEURS AND

SOCIETY

BRINGING THE ENTREPRENEURIAL SPIRIT TO EARLY STAGE INVESTMENT IN LATIN AMERICA

VANESA KOLODZIEJ | MANAGING PARTNER | @vanesak www.nazcaventures.com @nazcaventures