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- [00:00]
A
Yeah.
- [00:01]
B
Purposely gone after women, even though I have been told by several people like Anna that is the wrong strategy and that women don't have money, women don't care about investing, so. But that has been a purposeful strategy. That's. I mean, and I think as a fund manager, you know, for people here looking to start their own funds, it's, you know, what does your definition of success look like?
- [00:28]
A
Welcome to the Investor, a podcast where I, Joel, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. Even though it's not your style, but, you know, we'll. We'll. We'll kind of make it organized, too. I'll try to have some structure to the, to the discussion as well. But look, you're here. Excited to have you here. So, you know, for the other people, we're going to let other people join in, but we've got Ana Raptis here from Amplifica Capital. Did I pronounce that right?
- [01:15]
B
Pretty good. Pretty good.
- [01:16]
A
Okay. No, my. It's maybe my accent, you know, that maybe threw you off, but you are located in Mexico. We met through just kind of some common communities. Specifically, I think it was Transact global. So there's just a lot of great communities for the emerging manager movement. People are now able to start their own funds, build community and content around that, and plug into each other's ecosystem. Welcome to the show. Thanks for popping in on Cinco de Mayo, even though I learned that they don't celebrate that in Mexico.
- [01:54]
B
Thank you so much for the invitation here. Yeah, no, we don't actually celebrate Cinco de Mayo in Mexico City, but it's great to know that people in the US Are celebrating it and drinking a tequila and having some guacamole.
- [02:08]
A
Well, hey, you know, let's jump right into it, you know, just really excited to have you here and, you know, been, you know, really happy that we've been able to find some ways to collaborate and find some synergies, and that's. That's what it's all about, you know, helping each other out and supporting each other. So why don't we kick it off and maybe start with your background, you know, maybe where you started out in your career. From my understanding, you did not grow up in Mexico. You kind of traveled to a couple different countries. So maybe just walk us through your story and how you ended up in Mexico and how you started Amplifica, and then we could just take it from there.
- [02:41]
B
Excellent. And I will try to gauge by people's faces the one that I can see, like, if you're actually interested or really bored. And I need to cut it short. So back to the things that. The forces that have really influenced me in my life. I grew up in a family business environment, and I think that was a fairly traumatic experience for me because I saw my father just working all the time and traveling. So he started this business with his brother. Right. So it's a family. Family business. So I grew up. But the good thing about that, Well, I was always involved in a business environment and always learning. And that was just kind of like our daily conversation. And from a very young age in a, you know, my. My dad's family business was this, you know, fish processing factory. So. And my dad grew up, like, selling cucumbers and tomatoes. And so he wanted to make sure that we understood as well, you know, how money was made. So my job was working the fish factory, like, you know, packing prawns. Have you ever thought of a more boring job in the world? There probably isn't, like, so I used to kind of like, count the seconds away and doing it. And that's how kind of I learned about business and how I earned my pocket money and learned that it's not that easy to make money. Right. And one of the things that's always been really interesting to me is economic development. And I was a real nerd in the. When I studied economics in Australia, spent my time in the library reading the World Economic development reports. And so when I finished my economics career, I went and worked internship at the UN in Bangkok. And I was actually also on the side teaching economics at Tamasat University in Bangkok. And that was a really interesting experience for me because, first of all, I know this is going to go on YouTube, but between us, it wasn't the best experience working at the un. It wasn't like I wasn't actually solving the problems of the world that I thought I could do. I saw a lot of, you know, bureaucracy there and. And thought, okay, this is not exactly that I want to do. So it was a great learning experience for me. Then I did my master's degree, and then I went and worked at. I worked at the World bank, and I was still very interested in development economics and how we can, you know, help other people. So that led me to move into the energy space because clean, efficient, safe electricity is something that people need access to in terms of, you know, for economic development, to grow their businesses. And the people at the World bank. To me, Anna, you are a high energy person. Why don't you go out to private sector for a while and see how that is. And so that's how I started working, developing energy projects, large scale infrastructure. This is 20 years ago. So at that age, like natural gas was the transition fuel. And so I was working on natural gas projects, which was interesting at the time, Maybe it's not 20 years later, but that's what took me to Mexico. Mexico was looking to develop new infrastructure and that's how I ended up in Mexico. And so that's been a very interesting experience for me because in terms of like, how did it help me get to vc? Well, those kind of projects are very capital intensive and you really have to understand project finance, corporate finance, and how you make a business kind of work. So kind of like fast forward years, I was outside of Mexico for a while and coming back and I was really impacted by the negative dialogue around Mexico. And I was like, I want to be part of positive change, I want to help change this dialogue. And so I had been an investor pretty much my whole life. And how did that happen? You know, kind of like saving up my pocket money. And then when I went and did my master's degree at the U.S. that's when, you know, when you could first really start opening. You know, this is like 20 years ago. So you know, you could open Charles Schwab account, you could start doing that much cheaper trading. And so I started doing that. And so when I, you know, I really believe that we learn by doing, by, you know, making mistakes. And so I made plenty of mistakes and I also had success. So, you know, I invested in some companies that went broke in the, you know, dot com boom. And I've gone through various economic cycles and what I've seen is, you know, things go up and down and they go down afterwards, they tend to go up again. So don't panic. Right. And so when I came back to Mexico and I was very, I mentioned I was, you know, very interested in how could I make a positive difference. I really wanted to get into the impact investing space, but that was very immature here in Mexico. And so I started investing in a couple of funds that didn't have the exact thesis that I was looking for, but it helped me learn. And because Mexico, you know, the venture space in Mexico, I would say, you know, between us is about, you know, 20, 30 years behind where the US is sure I could enter, you know, put a small amount of money and get, you know, like invest in a fund. And, and the funds in Mexico where I invested have really helped me learn as an investor and also was an initial source of deal flow for me.
- [08:26]
A
Yeah.
- [08:27]
B
And so then I started investing directly in companies. And I've always been, you know, when I'm doing these direct investments, I'm motivated by having, you know, making a positive difference, being able to, you know, add value to the companies investing in. And so I started investing initially in financial inclusion before it was trendy and called fintech. That's where I started. And you know, then I started to notice, you know, get greater sensitivity and understanding of who was at the investment decision making table. And what I mean by that is that people, people had said to me, anna, you seem to enjoy doing this. Why don't you start your own fund? And I said, well, I'm not really interested in taking on the responsibility of other people's money and sounds a bit scary to me. And I also saw that Mexico was an undeveloped VC ecosystem and I saw a lot of people starting out as fund managers and I didn't really see what unique value proposition I could add and how I could differentiate myself until I went to the US and that's when I really realized how isolated I was and I wasn't connected to where I needed to be connected. And I went to an amazing meeting of the Angel Capital association meeting in Boston in 2018, and I met all of these amazing women who were starting their own funds. And that's when I realized, hang on a minute, all these people doing stuff in Mexico aren't like me because they're all men. Right? Yeah, I had so, you know, I had seen. Then I really helped me understand through also this conference. I went to all these people that I spoke to what I could bring in terms of value add and something different because I did not see at the time in Mexico any female fund managers starting their own funds. So then I spent a couple of years doing research because this was April 2018 and now we're in, now we're three years later because we're in 2021. Right. So I spent time. The problem I wanted to solve was getting more women to invest. Right. So talking to different platforms, angel groups, clubs, understanding how they're set up, why they were set up, and that led me to create Amplifica as a fund. Now the reason why it's as a fund, you know, and you know, for the people on the Call who are thinking about setting up funds. It's set up as a fund because the level of, you know, maturity of investment experience in, in Mexico is quite low. So it's really important to look at who your audience is and how you want to help them and how you want to serve them. Right. So I didn't feel that if I set up an angel group or some kind of syndicate where people could invest in a couple of companies and maybe not get a diversified portfolio, I was worried that they could end up with a very bad experience. Sure. And that's what often happens with angel investors. In order to have a good experience, you need to invest in a broad range of companies and have a portfolio, whereas if you just rest in one or two, you could just lose all your money. So I wanted to have a structured discipline approach where we have a well structured portfolio. And that's why I started up set up as a fund and not as a club, not as a platform, not something else. It took me a long time to set it up for different reasons. I knew by September 2019, you know, that I definitely wanted to fund. Mexico was undergoing fiscal changes towards the end of 2019. So I had to look into different structures. You know, do I use the us Do I use Canada? And I spent a lot of time talking with, you know, different lawyers about that. I interviewed about in at least 10 different law firms when I was looking at structuring my fund quotes from between, you know, 15,000 through to $150,000 fund structuring. I didn't choose the cheapest and I didn't choose the most expensive. And then I also spent a long time looking at fund administrators.
- [13:14]
A
Yeah, that's important.
- [13:16]
B
So. And a lot of these decisions, it took me a long time because I'm also a sole gp. And why am I sole gp? Well, you have to look at. I love to collaborate, I love to work with other people. But when you think about setting up a fund, it's a huge amount of risk, it's a huge amount of commitment, and there are not many people who are willing to step out of their careers and give up a paid job to a job that is going to pay nothing for several years. Because when you're setting up your first fund in an emerging market, you're unlikely to raise more than $10 million. So, you know, it's a very challenging situation. So. And that's another reason why it took me so long. I was the only one reading, reviewing the LPA agreements. You know, I was the one talking with the choosing a lawyer. I was the one with the fund administrator. In the end, you know, I looked at lots of different fund administrators, all kind of pricing. I chose to go with Carter. And I've been really happy with CAR because they really supported me in the pre close process. And now it's just so great to know that I just send my documents to them and they put it into the spreadsheet and I need to check it and stuff. But generally it's right. So I'm very happy with them. And then the other thing that I have done that's helped me in my journey, knowing that here in Mexico there's no one else that looks like me or is doing something like me, it's connecting to other people in the US from who are diverse or underrepresented fund managers. I think Mac has been part of your program, right?
- [15:07]
A
Yes. Yeah, he has been. Yeah.
- [15:09]
B
And like Mac has been amazing.
- [15:11]
A
He's been amazing. Yeah.
- [15:13]
B
Like a real source of inspiration for me because kind of like another outsider who people would say, Anna, I'm sure people told Mac he was crazy when he started doing what he's doing. And the same thing people said to me. So having other people who are a little bit out there and a little bit different to follow has been a real source of inspiration for me.
- [15:35]
A
Yeah. Look, one thing that you said resonates with me, right? I mean, we're not doing this. We are doing it to provide hopefully, you know, outsized returns and return capital. Right. But you could make a lot more money just working at JP Morgan or working at a big company or private equity. Right. I mean, so, you know, I listened to some of these discussions with some of these emerging managers on, you know, I think it was like Samir Kaji's podcast. I mean, if you really do the math you're making, some of these people could be making close to minimum wage. If you really factor in all the hours that you're working and all the time you're putting it in. So in the beginning, in the early days, you're doing it for a certain purpose. And it's not always, you know, for financial return because you really, it is a startup, right? So you're building a brand, you're building a website, you're getting community. I mean, it really is a small business in the beginning. So it's the uber startup that invests in startups. Right. So there's. You're really starting from zero to one and you got to do it for the right reasons. And I think, you know, it's really inspiring when we see people like you just get up and start, you know, even though there's a lot of research and planning, you did it and that's, you know, that's all that matters. Right? So.
- [16:56]
B
Yeah, no, that's. That's exactly right. And the, the purpose behind Amplifica, for those people who are, you know, in the audience and understand the context, is that, you know, Mexico was ranked 124 out of 156 countries in terms of economic participation and opportunities, women. So when I think about, what am I doing, why am I doing it, like, yes, we are there to generate outsized returns for our investors, but we have a much bigger mission. And it's about precisely that. Through the existence of Amplifica, through our investments in our community, increasing the opportunities and participation of women in the economy. And how are we doing that? Well, one part is, at this stage, 80% of our investors are women. And that's unheard of in a fund in Mexico or Latin America. Normally, you see, if people try hard, they get 5 to 10% women. Right? But we have purposely gone after women, even though I have been told by several people, Anna, that is the wrong strategy and that women don't have money, women don't care about investing. So. But that has been a purposeful strategy. That's, I mean, and I think as a fund manager for people here looking to start their own funds, it's, you know, what does your definition of success look like? I think it's very. That's something that I was questioned by some of my LP beforehand, and I think that's really important to define. So. And, you know, when we invest and, but not just through our investments, through our whole, you know, being, we used a. Use a very broad gender lens. We use six different gender lens. So we're looking at women as investors, women as entrepreneurs. We're looking at the supply chain, our own suppliers, you know, are they consistent with our values and vision? For example, you know, when choosing a law firm, you know, I wouldn't work with a law firm that didn't have female partners. So. And then the other things, goods and services that, you know, do the companies produce goods and services that, that improve the lives of women? What are the, you know, what's the diversity in the team that we're investing in? What are, you know, the, what's the, you know, the labor policies of. In the companies we're investing in? Not everything has to be perfect on day one. And if we try to make everything perfect on One day, one, you know, we wouldn't achieve anything and we would be in anything. But it's a journey, right? So we're looking at, that's what we're, you know, there's what, that's what we're looking to achieve through our investments. And it doesn't mean that we only invest in female founders because as people would know here, like 90% of investments go to all male teams. So when we look at, we want to increase participation of women, we also can invest in those all male teams if they show intentionality, that they understand that the lack of diversity is a risk. And we can help them with that through our investment.
- [20:18]
A
Yeah, and we have a few people in this group here. In my emerging manager program, I have seed fund managers. These are people that have actually sourced capital, started the fund and then there's pre seed. That means people that are thinking to start their fund, they're really having, you know, they're really serious about it. But they were probably where you were a few months ago or maybe even a year ago, where you're still kind of doing source selection, right? You're trying to choose the right attorney, trying to choose the right fund admin. So you know, taking a step back, I think you started talking about this, which is like, think about what success means to you. What are some other frameworks that helped you think about why you're even starting a fund? Like, what's the point? You know, should people start with like a mission statement? Should people think about maybe what their, what their long term goals are? I mean, what, what do you think helps? And then maybe I think a few other things because you're, you know, you're always thoughtfully thinking about planning is, you know, what are the other tools and frameworks. So I would think, you know, just to tee this up, one thing is probably a strong idea of portfolio construction, right? Are you doing a $5 million fund? Are you doing a $10 million fund? How many investments are you making? So should they go to that level as well? And you know, so I guess high level frameworks and thoughts about like even thinking about doing a fund and then maybe some of the artifacts, like maybe, you know, a fund model or anything else, maybe, maybe kind of that package, if you have that to maybe unpack, that might be helpful to maybe tee up some questions and comments.
- [21:54]
B
Yeah, sure. So once I'd gone and had my transformational moment by going to the conference, my objective was very, very clear and more I started to speak to people. It was very clear to me the Lack of representation and what it means when they're trying to do something and they don't see anyone that looks like them. And that's been the same for me. I had to find people that look like me or that I could identify with that could help inspire me and help me say, yeah, what you're doing makes sense.
- [22:35]
A
And this wasn't. And real quick, this was not a female angel investor conference. It was just a big angel investor conference. But you were surprised to see so many females as fund managers from, you know, comparing that to Mexico. Is that kind of what would hit you?
- [22:52]
B
It was an Angel Capital association conference and on the side they had other things and that's when there was a meeting of Next Wave, which is a female focused fund and also a portfolio which have been on the side. They had this, but also. And they had some very powerful speakers there, women speakers talking about finance. They need to have more women investors. And what are the consequences of not having women investors? He was hearing all those messages and understanding them for the first time because honestly I, I didn't know that data because I didn't see it because I was investing myself. Right. I mean, and I think, you know, just as an aside here, I think often, you know, people who are a minority working in the environment don't always notice that they are because it's a survival mechanism. Like, I mean, I was energy industry for 20 years. I was often the only woman in a meeting. Don't think about that all day or night because if you did, you might get a bit miserable. Right? So you just like blend in, like.
- [24:02]
A
And you don't feel well, maybe. What's weird too is you kind of look outward, right. So you don't see yourself, right. So you just see whoever you see. So you forget that you're actually in the room, right. Because you're like, this is all the people that you're looking out.
- [24:14]
B
Well, that's exactly right. That's exactly right. And then talking about long term goals, I mean, yeah, I mean, I get those kind of questions like, Anna, this is kind of ridiculous. You're starting a fund so small, you know, what's your plan? Funds like that size don't work. Like, yeah, like I'm not. My ambition is not just to create, you know, a 5 or $10 million fund. This is a long term vision where we create multiple funds and we're going to grow and we're going to get, we're going to empower and help develop more and, and inspire more and more female fund managers. So that when we look around, you don't say, oh my goodness. In Mexico, there's no female fund managers over a million dollars. You can say, you know, there's 10 of them, there's 20 of them. So we want to be, you know, helping other people as well. So that's our long term goal to, you know, develop more funds, get to a viable level. And what you typically see is you see people starting out there. I mean, I'm a first time fund manager, so an emerging market, it's a challenge to raise capital, but I know that I need to, in order to get to the second fund and the third fund, I have to have a first one. Right. So, you know, knowing that having this first one is not the end game, that's, you know, that's really important. And LPs will ask, it's like, you know, what are you doing this for and what is your plan in the future? And so I think it's really important to have, have that.
- [25:45]
A
And I feel like they can probably tell if you're just telling them what they think they want to hear. What do you think they want to hear versus being authentic. Right?
- [25:53]
B
Yeah, yeah, no, I'm sure that's the case. I'm sure that's the case. Yeah.
- [25:58]
A
And then what, what would you recommend to have in your toolkit as you get started? Obviously, probably like maybe a couple levels of a pitch deck and you know, maybe a one sheeter fund model, any, anything else, you know, as you start hitting the road and starting to fundraise.
- [26:13]
B
I think that's, you know, that's a really great question. You know, it depends, depends on who your potential LPs are. And for my case, you know, my LPs have been people I've met and I've told my story to about what I'm doing and why I'm doing it. So I started off with a one pager. There's some advice that I got from friends, fund managers in Mexico City was not don't just send your deck around. And I think that's good advice because you want to be able to control the narrative and tell your own story. And I think that's very, very important. So what I developed was a one pager which kind of captures the essence of the bund. And then I send that around and if someone's interested, I'll follow up with a call and then I will use the deck as kind, as a tool and talk to that. But you know, use the pages that I need so that the conversation really Flows because it's hard to make a relationship with people through zoom and it's hard to engage people. So it's really, I found it's really, really important to try and have a sense of people actually interested in what you're talking about. And really helps when people have their cameras on because otherwise you don't know if they're just, you know, sending emails or checking messages or if they're interested in what you're talking about. So also other things that are very helpful to have some kind of CRM. I use HubSpot and that's been really, really important for me to be able to keep track because I don't know about anyone else on this call, but I'm terrible with emails. And I find that I get this inbox and, you know, I don't know, can't find the emails, don't know which ones to. But with HubSpot, I can go in there and say, okay, this person, you know, when did we last talk? What's going on? I think that's really important to have something like that. And I just use the free version of it, so that can be helpful. The other one is DocSend. I have used that so that, that's the way that I always send pitch decks to know if someone has engaged with it. That also helps, you know, HubSpot people, you know, if people have read their emails that you send them or not. Although I have been told by some people that work in institutions like, you know, Morgan Stanley and others like that, that they don't like DocSend and don't send me a pitch deck via DocSend, otherwise I'm never going to open it. So I think you have to be careful and flexible. You can have the, you know, 80, 20 rule. I'm going to send it out to, to everyone by, you know, you know, via Docs. And if it works, it turns out they don't. They won't read the document up with them and then I'll, you know, I'll be flexible and I'll send them and ask them just not to pass it around because it's really important to be able to control who and how is getting your, your deck.
- [29:27]
A
Yeah, no, that's, that's good feedback. And you know, I got similar advice from some of the LPs. So they, you know, one thing that they said is if you do use DocSend, just enable the ability to download because most of these institutions, they have to store all of this stuff in their archives. But an interesting piece of feedback that's something new, which I thought was brilliant, is if you personalize the deck to the LP, if you write the LP's name on it, it's going to be harder for the LP to share it because then they're sharing it and it's almost like it was given in attention to you. So there'll be probably. I mean, maybe not maybe they maybe doesn't matter. But I thought that was pretty interesting. I feel like I would probably be less, you know, likely to share it around because then it's kind of got my name on it. So it's almost like it was intended for me. So maybe I was in, you know, maybe it indicates that I was interested in it as an lp. So I thought that that was kind of a new piece of advice that I got that I thought was pretty funny.
- [30:27]
B
So that's really interesting. Where do they put the name like they put in the footer or they put the front.
- [30:32]
A
On the slide. On the front slide. It's like attention to Anna. Thanks for meeting me. So, you know it's going to be difficult for you to share, right? Because then it's like, wait a minute, like, why is your name on it? So then people know that like, you know, it was, it was definitely like personalized for you. So they may just be more reluctant to kind of just, you know, spam it out, kind of going back to your narrative. So again, you know, it's just new piece of advice. There's some benefits to running this, this emerging manager program. You get kind of creative advice sometimes.
- [31:01]
B
So, you know, I think that's a really good idea because only take you an extra minute to do that.
- [31:06]
A
Yeah. Also, I mean, the plus side is it shows that you made it personal for them too. So maybe in, in at the same time, you know, maybe the person feels special because it's like you prepared this special thing for them and in reality you just swap the name. Right.
- [31:20]
B
So yeah, they are really good. That's really the point. The other thing that, because we are, you know, a lot of our LPs don't have a lot of investment experience, we're doing a little bit differently is providing educational content.
- [31:36]
A
Oh, that's good.
- [31:38]
B
And so people really like that. They really like about vc. They like to engage some way with the entrepreneurs. They like to give their opinion about what's going on. So we've found that is very successful. We do monthly webinars. And the other thing that we do that's a little bit different is that we generate our Content in Spanish. Now, I don't know if long term makes sense, but at the moment, all of our investors are Spanish speakers, so. And I think in a world where VC is completely dominated by English, sometimes people like to be able to speak and read in their own language.
- [32:24]
A
Right.
- [32:25]
B
So we try and do that as a pointy friend check. Now we end up getting, you know, a lot of checks from people, people, you know, that don't speak Spanish. We're gonna have to change that strategy. But at the moment, helpful.
- [32:37]
A
Yeah, I think that's a good point because sometimes the, the LPs also, they, they want to be part of the process. So if you can bring them in and maybe even get their thoughts. I've had some success with some deals that I've done where LPs have kind of shared their opinion, and sometimes even though they're still investing, they, they'll have their own opinion of a contrarian view. And that could be helpful to you too, because you don't want to be, you know, looking at these deals with blinders on, but, you know, just learning and, and kind of helping them, like allowing them to participate, you know, to a level of comfort where they can kind of share their opinions. I think that inclusion brings a closer bond as well. Right. Because then they feel like, hey, you know, they're, they're part of this with you as opposed to being. Because an LP really, in essence, is a client relationship. But if you can make it where they're kind of like on the journey with you, I think it's different. And I think that could probably. And, you know, I mean, the feedback I get to is sometimes a lot of these LPs are past entrepreneurs. You know, maybe they're an entrepreneur that was successful in the energy sector, but now they want to learn more about FinTech and they just don't have the expertise. So sometimes they get excited to, you know, learn about women's health and fintech and kind of the sectors that you're doing. And you, because you're naturally passionate about it, you're just kind of talking about it because the trends that you're seeing. But secretly it's education too, right? Because it's like all new to them as well. So if you can do it and it's organic and you're enjoying doing it, I mean, that's how I am. I mean, because we do, we've done energy too. So, you know, for me, it's just kind of like I get excited to talk about it because I probably just started doing some Diligence and doing a lot of reading on it. So that helps to kind of like that, that excitement about it, like in trying to talk about it, to tell somebody else about it, that helps to get somebody else excited about it too. So.
- [34:34]
B
Yeah, that's right, that's right, that's right.
- [34:36]
A
And on the energy side, tell me what you think the big trends are. You know, I mean there's hydrogen energy, there's other types of, you know, there's solar energy that's evolving. So what, what are you excited about? What are some of the trends that you're seeing in, in just alternative energies and just the evolution of energy?
- [34:55]
B
Well, that's a really great question. I mean I honestly I want to see us have a cleaner air and I would, you know what we're having in Mexico City at the moment is a lot of pollution through industrial processes close to the city. So I mean obviously you see amazing uptake of renewable energy. I've seen, I saw a proposal a couple of weeks ago for a car in Mexico, beautiful looking car with a, with a hydrogen based engine. You see a lot more expansion in solar, in wind. But I at this stage am not looking to invest in those kind of projects because generally they are very, very capital intensive and they're not really suitable for VC financing, although in some ways and you've seen others doing really well through something like Tesla. But that is very, very unusual experience. Usually it's some other kind of financing. So I am on the lookout. I haven't seen any deals that I could invest in, but definitely keeping an eye out. We're seeing a lot of also innovation in the waste space, you know, waste to fuel, water. So they're all things that I'm very interested in but I haven't really seen a lot in that, in that space. I mean at the moment what am I seeing more of? You know, huge amounts still in the fintech space, all kinds of areas, some that are productive and some that are just consumption based. Then also seeing a lot more interest in the whole, you know, the education space, the health space. So and a lot in agriculture as well. And agriculture is an area that I'm really excited about. I think there's a huge opportunity to increase the productivity of agriculture in Mexico. It's very important part of the economy. Maybe people might not know this, but Mexico is one pretty much the largest supplier of fruit and vegetable to the United States. So the extent you can make that supply chain more efficient, it's beneficial to everyone. And one of the companies I've invested is actually a player in that space. So at the moment we've made four investments. One is in the ad tech space, one is in the education space, one is in the mobility space, and one is an insurance space. And I think that is a very interesting space, the insurance space. It's very under penetrated market in, in Mexico.
- [38:00]
A
Sure.
- [38:00]
B
Challenge is how do you get people to buy it? Right. I mean no one wants to spend money on insurance when there's so many other more interesting fun things you can spend your money on. It's something that's really important to help people manage risks. And we've seen that particularly in this time Covid people who don't have adequate health insurance. It can be a really life changing event. So I'm always like, part of what we're doing is we're looking to invest in companies that improve people's lives. So when we look at a investment, like, I mean today I saw one, right, and it was, you know, another kind of afterpay thing. Now everyone's gonna have different opinions about afterpay, but you know, like, are you really improving people's lives because they can now buy, you know, four pairs of jeans rather than one pair of jeans because I have to pay for it all once, you know, I mean, everyone's gonna have different opinions. But I'm not a huge fan of, you know, of, of. Of continue to fuel the, you know, consumption spending. I see consumption spending, you know, tool or productive lending? Tool. I'll go for the productive one because I want to help, you know, create more than, rather than just spend more.
- [39:26]
A
Yeah, yeah. Do you guys only focus on Mexico and Latin America? Are you guys open to investing globally as well?
- [39:36]
B
We're focusing on companies that are improving lives in Latin America. So it doesn't mean that we only invest in companies that are based in Latin America. They can be based anywhere as long as they're serving markets in Latin America. And actually would be very interesting. Interested in having a few companies from other parts of the world in our portfolio for a risk diversification perspective?
- [40:03]
A
Yeah, no, it's really helpful. What are some things that people should think about when they think about portfolio construction? So should it only be a function of how much you think you can raise or do you think people should also think about just their deployment strategy, like how many checks and the sizes of the checks? So any, any wisdom? I mean, because you kind of went.
- [40:26]
B
Through that exercise already, I can share my 2 cents. And I'm also quite, you know, analytical. I'm a chartered Financial analyst. And I like, I love it, to understand, you know, risk and risk management. So for me, one of the things I've learned as an angel investor is that it's really hard to pick winners, right?
- [40:52]
A
Yeah.
- [40:52]
B
I mean, you do your best, you do your due diligence, but at the end of the day, when you look around and see who is successful and who wasn't, you can't always tell. You know, there is a lot of element in what was going on in people's lives and a lot of other things. Right. So it's very important to have a diversified portfolio. And I think that means numbers. And so from the beginning, we've said, okay, we're looking to invest in around 20 companies, so somewhere into that 20 to 25 range. So we are looking. And that's challenging because you don't know how much money you're going to raise. And so our check sizes will be smaller or greater depending on how much money we want to raise. But we are planning to, you know, be in that round. 20 companies. Now, the challenges that you have when you write really small checks is that you have a lot less influence and you have a lot less, you know, ability generally to support the founders, depending on the level of expertise and experience that the founders have. And so just to give a couple of examples, there's a couple of companies where I invested in and wrote small checks. $25,000 in one of them. I basically never talked to the founder because he doesn't need me. Like he has. This is his third company, you know, if I. Yes, okay. He does send me messages and ask me, you know, like, what do you think about this? And what do you think about that? And how's my deck letter? You know, look, and I send, you know, send them to the deck checker and send some spelling mistakes and stuff like that, but not substantial, you know, contributions, because he doesn't need my help. But the other team where I invested, you know, a small check, you know, I'm, I'm, we're messaging every day. And that's because that team needs more support. So when people say, you know, how much do you support your portfolio companies? It's not a one size fits all. It's about developing a relationship of confidence so you can help them where they need help. And when you mentioned before about your LPs being your clients, that's exactly true. And so are the portfolio companies. So I see I've got these two sets of clients. One, my portfolio companies do the best by them, and the other group is the LPs, and I have to serve them as well. And it's important to keep, you know, in a balance and being able to respond to everyone. And that's. And that's another, you know, question when you think about portfolio construction, like, how much can you really support your portfolio companies and can you give them what they need? I want my portfolio companies to be my best ambassadors. And when someone asks them about me as an investor, that they provide really good feedback. And I know that that doesn't happen for all funds because I talk to other, you know, entrepreneurs, I say, well, you've got this company on your cap table. This, this. You've got this fund manager on your cap table. Tell me about them, you know, like, tell me what you've been happy with, and they will be okay. If you have a relationship of confidence, they will be, you know, generally very honest and tell you, well, like, these people add value. And these people have been a waste of time. And actually, these people, I wish they weren't on my cap table because they're just a pain in the ass. Right?
- [44:41]
A
Yeah. I will say, though, sometimes it's like we, we in our heart, we want to add value, but there just isn't enough time in the day. You know, I mean, I've been in that situation where it's not that I'm ignoring anybody, but there's. I'm just underwater, you know, with just a couple other initiatives, and I try to get back to them, but, you know, just some. Sometimes it just takes a little longer. So I can empathize a lot of times now when people get back to me, you know, after some time, because I just kind of. I'm assuming they're super busy. So I think, you know, sometimes I know funds hire somebody or bring somebody on that's like portfolio support. Because I think you definitely need a second set of hands for someone because it doesn't always have to be the gp, right? It could be someone that you. That you trust that's reliable, that's actually very diligent. They can help somebody roll up their sleeves. Like maybe that person needs some product support. But you kind of really do need different skill sets, right? Like some founders might need some help with financial modeling. That might be you, Right? Because you have really finance background. I have a product background. Right. So if somebody wants me to, like, you know, play with their app and give feedback, that's my, you know, superpower. Right? So I think if you can have somebody that can support, because portfolio support is very broad. So there's different things that you can support portfolio companies with, but you just can't. There just isn't enough bandwidth, I think, for you to be all in and support somebody 24 7. So I think, you know, that's an interesting role that I've seen recently in some of these VC firms that support role, because I think it's super helpful if you can help them, you know.
- [46:17]
B
Yeah, I would agree. The other thing, the other challenge that I've had, you know, setting up the fund has been, you know, how do you build a team? And I get people approaching me, not every day, but definitely a couple of people every week saying to me, oh, Anna, you know, I really love what you're doing. You know, how can you help? And at this stage, my answer is like, you know what? I need to raise more capital. That's how I. But, but a lot of people saying to me, oh, you know, I'd like to help you. How can I help? You know, can I raise money for you and then you pay me this or can you pay me cash for this? Whatever. And I'm like, you know what? At this stage, you know, I've only raised $2 million. Yeah, pay attention, team. I've got, you know, volunteers working and if I'm going to pay anyone, it's those people I want to be able to help. So I think that's been really challenging. And I would recommend to people to, you know, you need to work with people and understand what they can add, value they can add, or, you know, you give people titles and part of your fund and a lot of people talking about different kinds of venture partners, and that's something I've been looking at too. Yeah, but you kind of need to think carefully about the roles of those other people that are going to be supporting you. Because if you give people part of your fund, well, the fund lasts for 10 years and then if they don't do what they said they would do, what are you going to do? Yeah, so just thinking through those things.
- [47:57]
A
Carefully and sometimes, you know, the, the venture partner or the mechanisms to kind of compensate you, that might actually impact the structure of the fund as well. Right. So there may be some updates and then that's a whole revision and an update and the structure of your fund in the general partnership, there may be some, probably some downstream impact. So just kind of thinking through that and making sure you're able to kind of integrate that into the way you have your fund set up is another complexity too. I don't know if you've you've kind of faced that or seen that. But yeah, you're right. I think, you know, the, the whole industry is an opaque apprenticeship type of model where you can kind of earn your stripes by learning, by doing, kind of collaborating. And, and it is a startup, I mean it's, to be honest, is very similar to couple co founders going to a startup event and you know, maybe just deciding to build an app. But then sometimes people just fizzle out. I remember I did this thing called Startup Weekend. I mean the, the funniest thing was, you know, I, I really thought it was going to be like, you know, we built this kind of e commerce company so I was so into it. I thought it was going to be like, I'm like, man, I'm going to quit my job and like this is going to be like dollar shave club. And then it just like fizzled out, you know. So I feel like sometimes people, they just lose their engagement, they just lose interest and, and then you just kind of, you know, so there's only a few people that will stick around and actually be committed to it. So there's, I feel like there's also like a throughput of that. Right. And then with interns, the people move on. They want to, you know, they're kind of looking at this as a stepping stone, like, hey, I want to get, you know, this, this, you know, amplifica on my resume for the summer so that I can work at Goldman, you know, and sometimes that short term view may not be a good fit for your mission. So I think there's, there's kind of that throughput that I think happens sometimes as well. I don't know if you face that.
- [49:59]
B
Yeah, no, definitely. But we've also had like a lot of, you know, I've really appreciated the time people have put into to work with us and help us get some stuff, stuff, stuff up, you know, some really simple stuff that I didn't have time. I can't possibly do everything in the day. And I've been really happy that we've had people work for us and then go on and do other things. That's really interesting. And they also help spread the word about what we're doing. And one of my interns, she worked for us for six months last year and now she's gone to work for an investment bank. But she always send me messages. She sends me messages like, I can't wait till I can come back and work for Amplifica full time. So it's really nice, you know those little messages too. But I like to see people learn and grow and it's part of like life today, right?
- [50:57]
A
Yeah, I mean, it's a small world, you know, I mean there's those people, you never know, they may be, they may start a startup and you know, you, you get to invest in them or maybe they become an lp, you know, who knows? So it's a, it's a small world. Have you, you know, do you at least see the, the female fund manager ecosystem evolving a little bit? Like in Mexico? Do you think it's, Are you seeing a little bit of a catalyst now or.
- [51:21]
B
In Mexico? It's very, very slow.
- [51:23]
A
But you are seeing a little bit of change.
- [51:25]
B
Yeah, I'm seeing a little bit of change. But what's been very helpful for me has been the transact community with the. And then we have a lot of, we have a couple of other groups where we have female investors in.
- [51:40]
A
There's women. Women in VC is another one too, right?
- [51:43]
B
Yeah, exactly. Women in VC is another one.
- [51:45]
A
Yeah.
- [51:45]
B
And we're seeing more women getting interested in investing and starting investing. I'd like to see a lot more women starting their own funds, you know, that would be great.
- [51:56]
A
Yeah, me too. I mean, I think just in general, right? Just more emerging managers, they just all share a lot of their knowledge. And then, you know, I learned so much too because people are, some people are talking to some fund managers and some attorneys and different vendors and you find out about new platforms that you didn't know about. Tips like putting people's names on decks, just little things like that. You just kind of hear from other people and it just kind of helps. But we've been talking for a while. Maybe we got like seven minutes. Anybody have any questions? We do have a couple female emerging managers in this cohort. There's a few people actually that have talked to me about starting their own fund. So anybody here have any questions about starting a fund? Emerging managers, you know, sourcing deals. Any questions, guys?
- [52:52]
C
Hi, Anna, I'm Engels. I'm a guy. So I'm from Nigeria, although I work in the US in the pharmaceutical industry. And although I'm not in the jewels fund program for my fund management program, I do have interest in maybe doing something like that downstream. So I know that in emerging markets in Nigeria, for example, there are different expectations which regards returns from funds. I was having a discussion with a couple of friends and they were asking me if I were to set up a fund, how much could I guarantee in terms of returns and I couldn't really answer that question. So for you, in Mexico, what kind of returns would your investors be happy with? That's a lower threshold.
- [53:48]
B
That's a really great question. Thank you for that question. Because I try to be very clear about setting expectations now a lot that people in Mexico more familiar with the private equity model than venture capital. So. And in the private equity model, I don't know about the U.S. but in Mexico, you always see a hurdle rate, which is not something you typically see in vc.
- [54:15]
A
Yeah.
- [54:17]
B
So in Mexico, this hurdle rate has been imported into the VC model in a lot of fast funds. And so there's a hurdle rate of somewhere between 8 to 10% in a lot of funds, which I say I do not have a hurdle rate in Amplifica because I say, oh, my God, like, you know, the cash rate is less than 1. I can't. I'm not going to guarantee you a return. And so I'm very clear about that. I'm like, you know, like, you know, if you want to go invest in the stock market, you'll get a certain return. If you want to invest in bonds, you get a certain return. But this is venture capital. It's at risk. And so I'm very clear when I explain to investors, particularly if I think that they don't understand the asset class, like, you know, you know, this is venture capital. Our objective is to generate excellent returns, but it could be zero. But also explaining to people that the worst thing that could happen is it's zero. Like, it's a limited liability structure. So it's not like they can end up with. They could lose more money than what they put in. Right. So that's also important. I'd be interested to hear your feedback on this. What I have said to my investors that our objective is to generate a minimum 3x return with an IRR. Minimum IRR of around 15%. And the way we set that was like, first of all, and this is in US Dollars. Right. So I was saying, okay, for me as an investor, I think that's a minimal acceptable return considering how long people's money is locked up. You know, so that's. That's not a great return, but I'd say it's a minimal acceptable return. And also looking at the Cambridge Associates return profile and seeing what that looks like and what I think is reasonable, and that's. It's not a number completely pull out of there. It's not a number that's very aggressive. Some people might say that their target is 4 or 5x return. But I wanted to set that kind of what I thought was a reasonable level. What you guys think about that?
- [56:48]
A
Yeah, I think having some type of benchmarks for guidance is helpful. And having that framework, I think is going to allow you to think about what's realistic and what's not. And I think there's other functions too. How big is, how big is a fund? How, you know, do you have the infrastructure in place? And then, and then one question that I was going to ask as well is I guess the domicile. Did you end up going to Mexico to be domiciled or, you know, and I. And what were your thought. This question I had. What was your thought process and what were some of the observations when looking at Canada versus the U.S. so it sounds like, you know. Yeah, I forgot which one you netted out at, but what was the pros and cons and maybe thought process with.
- [57:32]
B
With.
- [57:32]
A
With those different, you know, countries.
- [57:34]
B
Sure. So first thing is I wasn't going to do Mexico because I wanted to attract international capital.
- [57:41]
A
Yeah.
- [57:41]
B
And completely understand that people don't feel comfortable, you know, they're investing in Mexican structure. So after that it was Canada versus U.S. yeah. I chose the U.S. because I could get access to fund administrators when the time I set it up, which was, you have to remember that I was thinking about all of this stuff like 14 months ago. So if you were to set up a fund today, I'm not sure if some like, I don't know if Carter now works with Canadian funds. Canada is a much easier jurisdiction to work with from a fiscal point of view. And it depends. You have to do your own research. You have to look at, you know, what's where your investors coming from. That was something that influenced me a lot because Mexico was going through these changes in the fiscal structure and Canada is different from the U.S. i went with the U.S. because it seemed to make more sense to me at the time. The regulatory burden is a lot lower in Canada. And also in Canada you don't have the same FATCA restrict, you know, restrictions that you do, you know, in the US like them demand. Like in the US you have to fill out, you know, if you're not from the US you have to fill out a W8. You have to provide that information. You do that in Canada, you don't have to provide your tax ID number. So, so those, you know, you need to know where your investors are coming from and based on that work out, you know, does Canada make more sense? Does the US makes more Sense. But, yeah, I was, because of the fiscal situation in Mexico and that Mexico is requiring all of this information that they require in the U.S. i just thought, you know what? We'll just do it this way. It's going to make it easier for me in terms of compliance. But it's something you need to look at carefully because I've had people say to me, I don't want to invest in that because it's in the US And I want to give the US Government all my tax information.
- [59:56]
A
Sure, yeah. No, that's fair. Well, I know we're a little over time, but I, you know, I guess. Anna, you got time for, like, maybe one or two questions?
- [60:03]
B
Sure.
- [60:04]
A
Cool. All right, so, guys, you got any other final questions? Quiet group tonight. All right, well, you know, feel free to rattle off any other questions.
- [60:20]
C
Yeah, I don't have a question, just a comment. I really enjoyed hearing your story, your career journey and how you started. Kind of gives me inspiration because I feel like I'm very much in the phase that you were many, many years ago, and, you know, we'll see what the future holds. But I appreciate you coming to speak with us.
- [60:43]
B
No, that's a real pleasure. And don't be afraid to reach out to people. I mean, I had never done this before. I mean, I had not used. I'd not really used Twitter very much before. Now I use it more and more. I use it a way of meeting people who have similar interests or going through a similar journey and to talk to them, you know, like, you know, you send them a message. And that's how. That's how I met Mac. I met Mac. Twitter. I've met other people that are going through the same experience. So you can share and learn from each other.
- [61:18]
A
Yeah, no, one thing that's interesting about Mac is I'll. I'll. I'll mention him or something, and then somebody is like, oh, yeah, I'm actually catching up with Mac, like, next week. So I think part of it, too, which is really important, is just trying to meet new people every week. I think I. I try to do that, and that's really helped for me. Just kind of, you know, proactively just trying to meet new friends, because that's also kind of how you build your proprietary deal flow as well. Just kind of, because you have. You have access. Friends want to invest with each other. Right. So you have a really interesting deal that you're looking at, and. And then you hear their side of it, why they're excited about it, and then maybe you'll end up investing because you discovered something that you didn't have access to earlier. So I think definitely, like, for me, at least, I mean, whatever works for me may not work for everybody else, but I think just naturally for me, trying to meet, make new friends every week has been really helpful, so. And I'm glad that you're a new friend, Anna.
- [62:14]
B
No, me too. Thank you so much, everyone, tonight. And thanks very much.
- [62:20]
A
Yeah, absolutely. Thanks a lot, Anna. See you guys.
- [62:28]
B
Sam.