How To Raise Venture Capital From Magma Partners, Ep 64

Venture capital, especially in Latin America, can often seem like a black box where founders have very little access to information about what happens on the inside of the firm. I’ve gotten so many questions about how to apply, when do it, pitfalls to avoid and so many more.

On the last episode of Crossing Borders, I interviewed Komal Dadlani, CEO and cofounder of Lab4U. One of her conditions for the podcast was that she could then turn the microphone around on me and ask all the questions she wanted to know about venture capital…of course I said yes! It was a great to share what we’ve learned in five years of VC and share how to best raise venture capital form Magma Partners. This episode is a combination of the questions Komal asked me and the most common questions I get via email, Twitter, Facebook, and LinkedIn.

As Komal wondered, many entrepreneurs ask themselves how VCs analyze companies that they are considering for investment, and why they choose to invest in a specific companies. Others are curious about dilution, deal structure, or even the operations of the Magma team.

This episode was an opportunity to answer those questions. If one person asked, then at least ten people were probably thinking the same thing. Check out this episode to hear me answer Komal’s questions and delve into the most common questions I get on social media.

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Why Magma Partners Loves Corfo But Doesn’t Take Its Money

Walmart’s acquisition of Cornershop for $225M set off a firestorm in Chile. Everyone from politicians to investors, columnists to entrepreneurs has thrown in their two cents.

Why didn’t any Chilean VCs invest, when 2 of the founders were Chilean? The debate got hotter when Oskar and Dani, two of Cornershop’s founders, shared their perspectives on Twitter and in interviews, and a prominent reporter used the acquisition to bash wealthy Chileans.

Some have turned Cornershop into a referendum on wealthy Chilean businesspeople. I’ve written about the Chilean extraction vs. value creation mentality. That’s a part of it. Others have seized on Chile’s conservatism. That’s also a part of it. Others have blamed CORFO, the Chilean government agency that supports new businesses and venture capital. Others blamed Chilean VCs for missing the boat. They also deserve some blame, although a Chilean fund did invest $500k into the Cornershop founders’ previous startup Seahorse, and multiple Chilean angel investors invested in Cornershop.

I got multiple requests for my perspective from entrepreneurs, investors and family offices from around the region. What happened? They also asked why have Magma Partners been the only VC fund in Chile that hasn’t taken CORFO money?

I love CORFO. CORFO created and supported Start-Up Chile, the world-changing program that brought me to Chile back in 2010. It indirectly showed me the opportunity to create Magma Partners in Latin America.

I also love CORFO because it’s made up of well-meaning, smart, dedicated people who are doing their best to change Chile for the better. Thanks to everyone involved. You’ve truly changed my life.

I also love CORFO because CORFO backed funds are blocked from investing in many of the best deals in Latin America. Since 2014, Magma Partners has invested in 42 startups across Latin America. And we found that CORFO blocks much of Magma’s Chilean from at least 40 of our best investments.

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Ep 55 Pedro Pablo del Campo: Building Bridges Between Latin America & the USA

Pedro Pablo del Campo is a Chilean entrepreneur, and the newest addition to our Magma Partners team. Born in Punta Arenas, one of the most Southerly cities in the world, Pedro Pablo traveled the world in his youth since his father was in the Air Force and then a commercial pilot. From a young age, Pedro Pablo was eager to be involved in early-stage enterprises and has gone on to founding or joining early teams of several startups and nonprofits bridging the US and Latin America. In 2016, he joined the Techstars team in Austin as the Business Development Director for Latin America, a position they created just for him.

Pedro Pablo has now brought his passion for supporting Latin American entrepreneurship to Magma, where he will be helping manage our portfolio and evaluating future investments for the fund. In this episode, we discuss Pedro’s non traditional career path, his start in the nonprofit world, how a cold email got him connected to the Techstars network, and what he thinks of the maturing Latin American entrepreneurial ecosystem.

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Ep 53 Diego Caicedo: Streamlining Small Business Finance in Latin America with Portal Finance

Note: Portal Finance recently closed a $200M deal with one of Latin America’s largest investment banks, BTG Pactual, to provide financing to small and medium businesses across Latin America. They were also winners of Magma Partners’ Latin America wide Fintech competition in 2016.

After growing up in the Bay Area, Diego Caicedo left Popayán, a small town in Colombia, at age fifteen to go to university in Bogota, then dropped out two semesters before finishing his degree in engineering. Why? He had a plan to build a massive, vertically-integrated coffee company that bridged the US and his native Colombia. Three years later, a strong La Niña year wiped out the coffee industry and he was back at square one.

Diego has never been one to give up after his first failure, though. In this episode, we talk about how he rebounded after closing his first business, how Diego became an entrepreneur in Chile’s mining industry, then how he realized the opportunities in Latin American fintech and started Portal Finance to help small businesses get liquidity when they need it. Diego is a lifelong entrepreneur with a lot of lessons to share with people just getting started, so check out this episode of Crossing Borders to learn more about how Diego does business across Colombia, Chile, and the United States.

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