A mindset of helping founders build quality investment rounds is embedded into our investment process at AVP Ventures. When we meet startup founders our first goal is to help them build a quality round, not to decide whether or not to invest. We trust that if we play a role in supporting the startup putting together a successful round, we will be a part of it. For the most part, this has worked out for us. Our fund has been able to invest in great startups and, at the same time, achieve a multiplier effect on capital invested. In order to be successful, startup founders in Latin America need a lot of things to go right. Raising an early stage round in Latin America is one event that can derail a startup. Founders often seek money from curious, but inexperienced angel investors or well-intentioned, but small venture funds. These angel investors and funds are often located across multiple countries and often too willing to sit on their hands and wait for the round to come together before committing. These factors mean that fundraising can take so long that it sucks the life out of the startup, or a taking on new investors can mess up the cap table, creating repercussions down the road. At AVP Ventures, we seek to empower startup founders by having our investment serve as a catalyst for their early stage investment rounds and by making sure our investment goes farther than just the money we put in.
We seek to empower startup founders by having our investment serve as a catalyst for their early stage investment rounds and by making sure our investment goes farther than just the money we put in.
Open investment process
After our initial sourcing of investment opportunities, 25 or 30 in a given month, we have calls with founders, and select investment opportunities that fit within our investment process. Typically, this is 10% of opportunities we see. For these selected startups, we invite the founder to present their pitches to our wider community of investors and advisors. We support the matchmaking process by facilitating introductions and conversations with potential investors. First, numbers. These selection committees get founders in front of multiple investors early on, giving them a chance to get in front of as many investors as possible in a short period of time. This results in maximizing efficiency of fundraising by reducing the number of cold emails and calls and increasing the interactions with qualified, active investors. By providing an open, inclusive process, we give startups an opportunity to build momentum around the round. Second, expertise and value-add. Our selection committee provides startups the opportunity to hear feedback from our panel, which often includes other founders or sector or functional experts. With more investors, founders can leverage multiple networks, experiences and perspectives in order to make decisions on how to best grow and efficiently scale their businesses. The individual investors that invest alongside the fund are typically corporate executives and board members of local and regional companies with a presence in Peru. Finally, co-investors. One of the key efforts of our team is to support founders and their startups by promoting a co-investment with funds and angel investors. This limits the amount of time founders need to spend fundraising. Due to our investment team’s strong network within Latin America’s regional startup ecosystem, we can support efforts to find value-added co-investors for investment rounds. The round structure we propose to founders opens the door for co-investors to join at the same terms as our fund. All-in-all, we believe transparency is a competitive advantage. We seek to remove friction from the fundraising process and facilitate the free flow of information, helping the startup raise money – all before deciding whether or not to invest.
For those opportunities in which we do decide to invest, we proactively propose terms to startup founders while aiming to invest with co-investors. This stance allows us to lead rounds despite not being the largest investor in the round, by being an early price-maker. Once terms are agreed, we share our due diligence materials with prospective investors. The immediate goal, now aligned with the startup, is to put together a great seed round, with as great investors as possible, for what the startup needs now, as efficiently as possible. Of the 17 investments we made, we acted as lead or co-lead investors in ten of the investment rounds . The fund is the first investor in Emptor and the first fund investor in Quantum Talent, Get on Board, Somos Moto, Culqi, Slik and Fitco .
The result of this lead effort is that both angel investors and funds join the round to create the multiplier effect. We consider part of our multiplier effect only those co-investors that enter at the same time and valuation, economic terms as our fund. Examples of this include Rebus, Fitco, Quantum Talent, Somos Moto, Culqi, DB Menos, LQN and Prestamype.
For the portfolio company financing rounds where the Fund has acted as the lead investor, the Fund has had a multiplier effect for the investment round. For each $1.00 that the Fund has invested in rounds in which the fund sets the investment terms and promotes co-investment, portfolio companies have raised a total of $6.20 in capital in the same investment round. This facilitates the round in a nascent market where trust is low and transparency is unusual.
We believe transparency is a competitive advantage. We seek to remove friction from the fundraising process and facilitate the free flow of information, helping the startup raise money – all before deciding whether or not to invest.
The collaborative and transparent approach of the investment process helps to secure additional funding. The fund has structured syndicated investment vehicles whereby co-investors may consolidate their investment under the investment team’s management. This structure is beneficial for startups as it provides an organized corporate governance dynamic and a cleaner cap table. To date, we have structured two syndicate vehicles for Fitco and Rebus. This highlights another way in which the fund’s investment process creates added value for the startup. This strategy also has proven to help us as investors. Later on, we will need work to help the startups raise significant capital in subsequent rounds. For now, this round puts them in a good position to get there.
 These include: Culqi, Emptor, Get on Board, Slik, Somos Moto, Fitco, Rebus, Quantum Talent, LQN and Prestamype.
 Prior to the fund’s investment Culqi, Slik and Fitco participated in accelerator programs Wayra, UTEC Ventures and 500 Startups. Quantum Talent received investment from WAYRA prior to the fund’s investment.