Caterine Castillo, Neivor | The Challenges of Raising Capital for the First Time [Ep. 65]

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Raising capital for the first time usually takes longer than expected and can be a frustrating process. Understanding how investment funds think, selling your market’s potential, and explaining your business model clearly is a real challenge if you have never done it before, and today’s guest, Caterine Castillo, CEO and cofounder of Neivor, had to face that.

Caterine told us what was hardest for her about raising capital, which quick wins she recommends focusing on, and whether a lead investor is necessary or not. We also talked about the particulars of her business model and what strategies she used to communicate and convince investors of her market’s potential.

Neivor is software specialized in the administration and management of condominiums and, to date, has raised more than USD $5 million from capital funds such as Softbank, Magma Partners, and Marathon Ventures.

Thanks to Oscar Garzón of Neivor and Nathan Lustig of Magma Partners for the excellent question suggestions.

What You Can Learn Today

  • What vertical SaaS is
  • How to raise capital for the first time
  • Tips for landing a lead investor

If you like the podcast, the easiest way to help us is by leaving a review with ⭐⭐⭐⭐⭐ on Spotify or Apple Podcasts. It takes less than 1 minute and helps us convince the hardest guests to land, such as David Vélez, CEO and founder of Nubank, whom we would love to interview.

Youtube Timestamps*

About Caterine and Neivor

  • [1:21] - How did Caterine arrive in the world of startups?
    • She worked 13 years in fintech and in the corporate world
    • Her cofounders were working on Neivor and Caterine decided to join
  • [2:04] - What is Neivor?
    • It is a housing ecosystem
    • With Neivor, condominium managers can make their work easier
    • Tenants have access to the same information as the managers
    • They have 100 condominiums as clients in Mexico and Colombia

Vertical SaaS and Neivor’s Market Size

  • [3:30] - What is a vertical SaaS?
    • Vertical SaaS products solve multiple needs in a specific niche
    • Horizontal software solves problems across different industries
    • Neivor has developed many features thanks to its users’ demands
  • [6:11] - How big is Neivor’s market?
    • In LatAm, there are around 26 million condominiums
    • In money terms, it is a market of USD $16 billion
  • [10:11] - Neivor’s fintech products
    • A condominium’s finances are very important
    • Usually, tenants make payments to the condominium with bank transfers
    • With Neivor, managers and tenants can send and receive payments on the same platform

Challenges of Raising Capital for the First Time

  • [13:49] - Lessons from raising capital for the first time
    • They focused a lot on perfecting the pitch and their presentation, and that was a mistake
    • It is necessary to sell the why of the startup
    • Choosing investors goes beyond the monetary value they can contribute
  • [17:06] - Early wins in the process
    • Focus on closing the deal
    • Landing a lead investor for the round is not mandatory
  • [19:38] - Advantages and disadvantages of having a fund that leads a round
    • The lead investor is a great support for growing the company
    • Funds with a low investment ticket do not offer as much support
  • [23:23] - What to do if I cannot find a lead investor?
    • Trust the process and keep moving toward the goal
    • Ask yourself what actions should be taken to convince the funds in the future
    • Ask the funds for feedback to understand why they are not joining the round
    • A ‘no’ now does not mean a ‘no’ later
  • [29:18] - How to prepare an investment pitch
    • Iterate the fundamental idea of the pitch
    • Constant validation with users
    • Synthesize the information, without leaving anything important out
    • Focus on the conversation with the funds, not on the presentation
    • Identify opportunities for improvement
  • [34:14] - Strategies for communicating about market potential
    • Make the opportunity and the market size clear
    • Explain user behaviors
    • Focus on the problem and the solution
  • [39:38] - How to stay motivated during a fundraising process
    • Prepare for the good, but even more for the bad
    • Be clear about the goal of the round
    • Avoid comparing yourself with other startups’ processes
    • Build a good network of contacts

Tweet Round

  • [45:58] -
    • Recommended book: De Cero a Uno, by Peter Thiel
    • Changes in Latin America’s startup ecosystem: set egos aside, and avoid unnecessary comparisons with other founders and other startups
    • Founder to interview: Raphael Kappeler of Reworth

Episode Mentions

You can find Caterine on LinkedIn and Twitter

Recommended book: De Cero a Uno, by Peter Thiel

Founders to interview: Raphael Kappeler of Reworth

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