Francisco, Diego and I first started working on Magma Partners in December 2013, which means we’re just passing our 3rd birthday. We originally planned to invest in 4-6 Chile based companies per year, but quickly found that demand for private capital, high quality mentorship and a bridge to the US market outstripped our modest goal.
We like to be the first check into a startup and invest an average of $50k initially, with the capacity to follow on with $250k more in two niches:
- B2B companies that serve the Latin American market
- Startups whose tech team is based in Latin America but whose primary market is the US.
In 2016, we invested in 7 new companies, moved to new offices in Santiago and expanded our presence in Colombia and in the US. We’ve honed our expertise in helping Latin American startups derisk the jump to the US market and have had our first successes helping B2B companies in Latin America negotiate significant deals with legacy companies.
We also focused on building out our networks in Colombia, Mexico and the US. As more of our companies started to expand outside of Chile, it was the logical next step to live up to our promise of helping entrepreneurs with more than just money.
As we turn 3, here’s some of our 2016 stats: (more…)
Una version de este post aparece en español con el titulo Lo Que Debes Saber Antes de Invertir en Startups. También fue una charla (video).
As startups and tech investing has gone mainstream with things like AngelList, Shark Tank, The Social Network, the proliferation of accelerators and incubators, and the celebritization of founders and VCs, more money has flowed into the industry.
Most non professional investors interested in startups are starting to dabble in early stage companies as angel investors. Friends often send me deals they’re think about investing in, asking for advice.
Here’s a concrete example of a typical question from a successful entrepreneur friend looking to invest:
I am starting to look at some investments in startups that have proven initial product-market fit and revenue traction with positive gross margins. I have found some great opportunities [and] I am only targeting businesses that meet my personal criteria. My biggest concern is how I should evaluate the businesses from a valuation perspective. Is there any guide suggested on this?
I personally am finding companies that claim to have a higher valuation than my own company which has greater revenues and faster growth rates, etc. So, that puts off a bit of an alarm in my head but I realize it’s normal in the VC world. I don’t really know how to value a VC backed start up.
I decided to share my answer: (more…)
Property Simple, a company that helps real estate agents sell and capture more properties, is our first portfolio company to make the jump from Latin America to the US market. Adrian Fisher, Property Simple’s founder, moved to Los Angeles full time a month ago to continue to help real estate agents sell more faster.
Property Simple helps real estate agents in two ways.
Property Simple’s first product allows real estate agents to improve their personal branding and stay top of mind within their network by automatically posting property listings and unique agent information to an agent’s own social media profiles like Facebook, Twitter, LinkedIn and Google Plus. By posting automatically, agents stay top of mind in their personal network, which are the people most likely to refer a seller to them, without having to spend 30-60 minutes per day on posting on social media. (more…)
Edoome (AngelList profile), a social learning management platform that turns classrooms into an online community so teachers, students and parents can communicate and collaborate easily and securely, just signed an agreement to launch Edoome in all of Chile’s public school system. In the next few months, 200k+ teachers and 3M+ students at 12,000+ Chilean public schools will start to use Edoome, making students’ and teachers’ lives easier and better. The majority of teachers who use Edoome save more than two hours of planning and preparation time per week, letting them focus on what they do best: teaching students.
This agreement is a big step forward for Edoome, as it brings an entire country’s education system into the Edoome platform. In addition to this agreement, Edoome has been growing quickly in Mexico, Spain, the US, Ecuador and Colombia over the past 6-12 months and now has more than 75k teachers and 150k students using the platform. Edoome just recently did a soft launch in the US and is growing at 20+% monthly. (more…)