Santiago Zavala, 500 Startups LatAm | Starting a VC Fund, and the Opportunity in Seed-Stage Investing [Ep. 1]

The audio and video are in Spanish. These notes are a translation.

Today, the startup ecosystem in Latin America is at an unmatched moment. Every year, we see more people passionate about getting involved in technology projects with the potential to improve the lives of millions of people. But 10 years ago it was not like that. There were few entrepreneurs and even fewer investors. That is why we are excited to welcome one of the pioneers of the Latin American ecosystem, Santiago Zavala, cofounder and partner of 500 Startups LatAm, in the launch episode of the Startupeable Podcast.

500 Startups LatAm is the most important startup accelerator in our region, whose portfolio includes Clip, Konfío, Platzi, among others. 500 is one of the most active startup investors in the world and, in LatAm alone, has invested in more than 200 ventures. You cannot miss the entire episode.

What You Can Learn Today

Process of creating a VC fund
State of the VC industry in the region
500 Startups LatAm selection process

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How to Be a VC in Latin America

[1:47] - How did Santiago arrive at the world of startups?
- Santiago’s successes and failures within the entrepreneurship ecosystem
[2:29] - Creation of his first startup investment fund: Mexican VC
- Who was the fund’s first investor?
[4:31] - Origins of Mexican VC
- Why were startups not taking off in Mexico?
- Who is David Weekly and why was he important for Mexican VC?
[8:20] - The challenges of creating a Venture Capital fund in 2011
- Did angel investors from Silicon Valley want to invest in Latin American startups?
- What was the Latin American context for entrepreneurs like in 2011?
[9:54] - Santiago’s experience raising a VC fund for Latin America
- What was the fundraising process like?
- The importance of contacts in Silicon Valley
[14:35] - How did the process of raising capital change between fund 1 and fund 2 of Mexican VC?
- What is an investor’s track record?
- Hack for raising capital and working with startups at the same time
[18:10] - 500 Startups lands in Mexico and LatAm
- The relevance of partnering with Latin American businesspeople to invest in startups
- How do you build an entrepreneurship ecosystem?

The Venture Capital Industry in Latin America Today

[23:39] - The progress of the startup ecosystem in LatAm over the last 9 years
- The learning phases of Latin American startups
- Are we ready to compete globally?
[29:00] - What changes do we need in the entrepreneurship ecosystem?
- The democratization of access to opportunities today
- Entrepreneurship as a function for making a better world
[36:16] - Venture Capital funds’ lack of technological expertise
- The main reason startups fail in LatAm
- How can investors with technology experience help?
[37:52] - A new mindset for starting companies and investing in startups
- Diversity in the startup ecosystem
- Breaking traditional structures in order to collaborate and invest in talent
[42:22] - PR and Content Marketing in Venture Capital
- Why have VC funds in Latin America done little PR?
- 500 Startups’ principle: Do things, tell people
[47:17] - How does the Venture Capital industry work?
- Designing the size of a VC fund
- Limited Partners (LPs), who are they?

The Missing Middle: The Seed Stage

[50:08] - Opportunities to improve the Venture Capital industry
- The Kauffman Foundation’s research
- The opportunity to invest at the seed stage
- Why have VC funds in Latin America stopped investing at the seed stage?
[55:43] - How are Latin American startups raising seed rounds?
- Other resources: founders, angel networks, family offices

500 Startups LatAm

[58:51] - Selection process at 500 Startups LatAm
- Types of investment at 500 Startups
- How does the Somos Lucha selection process work?

Tweet Round

[65:50] -
- Vertical where Santiago would like to see more startups: Developer tools
- Recommended books: What the Dormouse Said, Accidental Empires
- Changes in the startup ecosystem: the democratization of access to capital
- Investors to keep in mind in LatAm: Anna Raptis (Amplifica Capital), Armando de la Torre (Poligono Capital)

Episode Mentions

Investors mentioned: David Weekly of Mexican VC, Anna Raptis of Amplifica Capital, Armando De La Torre of Poligono Capital