Category: Latin America Startups and Investing

Magma At Two Years

Two years ago my friend Diego introduced me to Francisco the head of one of Chile’s family offices. Francisco told us that he wanted to invest in startups and high growth small businesses not only because he thought Chile needed a fully private early stage startup fund to help entrepreneurs be successful, but also to potentially change how Chilean investors look at startups by showing them the way forward.

After working together for about six months, Francisco, Diego and I announced our first two investments, officially launching Magma Partners, a US$5M early stage investment fund powered 100% by capital from the three of us.

Our original plan was to invest in 4-6 companies per year, but we were inundated with qualified companies that needed capital, monitorship, connections and feedback from people who’d done it before. We received over 150 applications (more…)

Case Study: Ecommerce Opportunities in Chile and Latin America

Una versión de este post fue traducido a español por @Joseia (muchas gracias!) y apareció en Pousta con el nombre Conversamos sobre cómo montar tienda online con alguien que aprendió DEMASIADO al respecto.

In late 2012, I met up with two ex startup chile friends over beers. Like most beery conversations between entrepreneurs, the conversation devolved into new business ideas. All three of us had seen ecommerce’s steady growth in Chile and were certain that it would continue to grow toward levels seen in other developed markets. After a few more beers, one of us said, “why don’t we just start a small ecommerce business, it’s the best way to learn about the market and see where the real opportunities are.” (more…)

Full Stack Startups in Latin America are a Massive Opportunity

Latin America is the perfect market for full stack startups. I’m convinced of it after living and working in Latin America for the past four and a half years and am even more convinced after having met, worked with and reviewed over 600 startups in the past year and a half as managing partner of Magma Partners in Santiago, Chile.

So what is a full stack startup and why am I convinced that Latin American entrepreneurs should be exploring full stack startup business models?

First, lets start with a definition. Chis Dixon coined the term Full Stack Startup in a blog post in March 2014. He says that a full stack startup is a  “…complete, end-to-end product or service that bypasses existing companies.” It bypasses the old, existing hierarchy to be able to control the entire experience. According to Dixon:

Prominent examples of this “full stack” approach include Tesla, Warby Parker, Uber, Harry’s, Nest, Buzzfeed, and Netflix. Most of these companies had “partial stack” antecedents that either failed or ended up being relatively small businesses.

So why are companies following the full stack method instead of the old school method of partnering with large companies? (more…)