Podcast Summary

The Investor With Joel Palathinkal

Episode: Carlos Torres: AMG Block
Release Date: August 19, 2025
Host: Dr. Joel Palathinkal
Guest: Carlos Torres, GP at AMG Block

Episode Overview

This episode centers on the evolving venture capital landscape in Mexico and Latin America, highlighting the unique challenges and opportunities for emerging managers. Carlos Torres, founder of AMG Block, covers his career journey, the region's funding ecosystem, the impact of blockchain, LP dynamics, and practical advice for those seeking to launch their own funds in emerging markets. The conversation touches on cross-border investing, fund structuring, fintech trends in LatAm, crypto’s real-world use cases, and the power of community among new fund managers.

Key Discussion Points & Insights

1. Carlos Torres’ Professional Journey

[04:12 – 09:00]

• Background: Originally began in corporate banking at HSBC Mexico, then transitioned through sustainable energy/water investments, SME fintech, regional banking, an MBA in Boston, and finally into VC with AMG Block.
• Motivation: The underserved early-stage funding ecosystem in Mexico and the gap in finance for SMEs led to starting his own fund.

“That’s when I realized that there is still a huge gap in the early-stage funding ecosystem in Mexico and in Latin America as a whole.”
— Carlos Torres [05:54]

2. The State of Venture Capital in Mexico and Latin America

[00:00, 09:15, 22:16]

• Nascent Ecosystem: Only about 50 VC funds in Mexico vs. 200+ new funds per year in the US.
• Opportunities & Challenges: Less competition for deal flow but also limited capital and deal volume. The road is more collaborative due to the small community.

“We see it more as collaboration opportunities, right. I mean, there aren’t that many funds investing in this type of opportunity. So the more the merrier, right?”
— Carlos Torres [09:28]

• Deal Sourcing: Relies on a limited but growing network of accelerators (500 Startups, MassChallenge, Techstars), investor collaboration, and sharing deals among solo GPs.

3. Fund Structure and Tokenization Vision

[07:30, 31:14]

• Tokenization Experiment: Initial ambition to tokenize fund interests for LP liquidity, paused due to market immaturity; pivoted to a more traditional VC approach.
• Fund Setup: Establishes the fund in the US for LP confidence and standardization, often investing in startups that set up Delaware C-corps for cross-border attraction.

“We wanted to simplify obviously the investment opportunity for LPs as well. And in terms of the type of investments, now it’s very common for international or Latin American startups to actually set up a C corp in Delaware...”
— Carlos Torres [12:47]

4. LP (Limited Partner) Ecosystem in Mexico & Fundraising

[11:03, 21:28, 54:36]

• Educational Gap: Many Mexican LPs prefer traditional, tangible assets and direct deals; LP education on VC is ongoing.
• International Strategy: AMG Block targets international LPs for better understanding and appetite for risk in emerging markets.
• Fundraising Tips: Start with warm intros, know LP profiles and restrictions, focus on HNWI, and family offices for smaller or first-time funds. Institutional investors usually require large minimums ($20M+) and track record.

“Don’t focus on institutional investors because they don’t typically invest in first time funds... So it’s important to also sort of … circle down around the type of LPs that you’re going to be pitching to.”
— Carlos Torres [54:36]

5. Community & the Emerging Manager Journey

[17:28, 19:05, 21:28, 17:59]

• The Challenge: Emerging GPs juggle everything (fundraising, diligence, legal/admin, branding) with little infrastructure or team.
• Peer Support: Cohorts and communities provide critical support, resources, and emotional validation. Shared learning improves outcomes.

“We go through the same ups and downs as an entrepreneur does. Right. So this type of support… is something that we… really appreciate as an opportunity to connect with others in the venture landscape…”
— Carlos Torres [17:59]

• Best Practice: Creating resources and knowledge-sharing libraries for future cohorts, ongoing communication via monthly newsletters.

6. Fintech Trends and Sector Insights in LatAm

[24:26, 26:50]

• Hot Sectors:
  • Remittances: Massive US–Mexico corridor, significant inefficiencies and fees.
  • Lending: Huge SME market largely ignored by banks; 98% of businesses are SMEs generating over 70% of jobs.
  • WealthTech: Cross-border public market access is nascent.
  • InsurTech: Wide open market for digital innovation.
  • Blockchain/Crypto: Core vertical due to transparency, de-risking, access in unstable economies.

“When you look at Mexico’s business composition, 98% are SMEs... but they’re being underserved by the traditional banking system.”
— Carlos Torres [24:41]

7. Blockchain, Crypto & DeFi Use Cases

[30:35, 32:33, 34:49, 35:53]

• Investment Thesis: Focused on equity in companies applying blockchain vs. direct token purchases; prioritizes infrastructure and solutions providers.
• DeFi’s Role: Offers alternative financial infrastructure in countries with unreliable banking.
• NFTs: Interest in backing NFT infrastructure rather than speculative collectibles.
• Regulation: Continuous challenge; would require a pure-play crypto fund to go deep.

“In emerging markets where there is corruption, there’s lack of transparency, there’s financial inefficiencies, we believe blockchain is one of the technologies that’s going to disrupt the traditional finance industry.”
— Carlos Torres [30:35]

8. Practical Fund Construction Advice

[38:16, 41:06, 42:18]

• Portfolio Math: Solo GP → More hands-on → Fewer investments (e.g., 15 portfolio companies with $250k checks).
• Modeling Fund Size: Estimate warm circle commitments, multiply by 10 as a first approximation for realistic target fund size.
• LP Updates: Regular communication is critical; keep LPs in the loop like startups do with their investors.

“If you were able to raise 1 million, then multiply that by 10, that’s your target initial fund size.”
— Carlos Torres [42:18]

9. In-Person Interactions & Relationship Building

[46:21 – 48:51]

• Physical Meetings Matter: In-person events, educational seminars for LPs on fintech or emerging sectors, host international LPs to showcase regional opportunities.
• Pandemic Effects: Mixing virtual and physical strategies, but seeing reopening as a chance to strengthen relationships.

Notable Quotes & Memorable Moments

• On Collaboration:
  “The more the merrier, right?” — Carlos Torres [09:28]

• On Misconceptions:
  “Oftentimes when people think about venture investors, they think like you just appear out of nowhere… You already have the capital… We actually … go out and fundraise. We go through the same ups and downs as an entrepreneur does.” — Carlos Torres [17:59]

• On Value of Community:
  “If you can kind of be in a community or a group where maybe there’s an LP that can explain that to you … it’s helpful.” — Joel Palathinkal [20:58]

• On Blockchain:
  “We don’t do token investments… but if it’s a company providing the infrastructure required to issue NFTs, that’s something that we would be interested in investing [in].” — Carlos Torres [32:33]

• On DeFi & Emerging Market Impact:
  “The reality is that a lot of the innovation that goes on in financial services in developed markets, they tend to solve convenience issues. In emerging markets, they help to solve structural issues...” — Carlos Torres [52:07]

• On Fund Sizing:
  “One quick math tip … consider your closest friends… How much are you able to raise from them today? … Multiply that by 10, that’s your target initial fund size.” — Carlos Torres [42:18]

Timestamps for Important Segments

• [04:12] Carlos' Career Path and Motivation for AMG Block
• [09:15] Venture Landscape in Mexico; Fund Strategy
• [11:03] Educating LPs & International Fundraising Approach
• [21:28] Emotional Side & Community Support for Emerging Managers
• [22:16] VC Deal Sourcing, Accelerators & Ecosystem Players in Mexico
• [24:26] Fintech Opportunities in Remittances, Lending, WealthTech
• [30:35] AMG’s Crypto/Blockchain Investing Approach
• [34:49] Real-World DeFi Use Case in Latin America
• [38:16] Building, Structuring, and Modeling a Fund
• [46:21] The Lasting Value of In-Person LP Relationships
• [52:07] Difference Between Developed & Emerging Markets in FinTech

Conclusion

Carlos Torres’ journey provides a playbook for anyone looking to launch a fund in an emerging market – combining resilience, flexibility, and a community spirit. He stresses the importance of understanding local realities, building global bridges, and navigating the unique fund-raising and operational challenges of Latin American VC. The episode stands out for real-world practical advice, candid insight into the grit required of new managers, and actionable tips on both fund structuring and cross-border network building.