Jul 31, 2023 · 1h 13m · news
Marcelo Claure & Shu Nyatta: LATAM's New $500M Growth Fund; Investing Billions at SoftBank | E1042 · 20VC with Harry Stebbings
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In this episode of 20VC, Harry Stebbings hosts Marcelo Claure and Shu Nyatta to explore the launch of their $500 million growth fund, Bicycle, while diving deep into their partnership dynamics, the macroeconomic tailwinds of Latin America, and crucial investment lessons learned from deploying billions at SoftBank.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 17.9% of the talking time here. How this is scored →
Harry as informed peer 3.3 Guest teaching 4.0 Guest disagreement 1.6 Harry pushing back 2.5
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 7:59 Shu rejects host premise on elite founders
When Harry asserts that the best founders operate in isolation and do not need investors, Shu directly refutes the premise using a sports analogy to insist that great founders actively demand coaching and truth.
Hardest push from Harry ▶ 39:02 Harry challenges LATAM exit return scaleHarry forcefully questions whether local LATAM listings and M&A can yield true fund-returning scale without big NYSE/NASDAQ IPOs, prompting Shu to reframe growth equity return profiles.
Biggest teaching moment ▶ 36:18 Shu educates host on Brazilian financial tech depthShu surprises the host by revealing that 25% of global fintechs reside in LATAM and detailing Brazil's ubiquitous real-time PIX payment infrastructure and debt capital market sophistication.
Harry holds his own ▶ 8:45 Harry distinguishes Tier 1 vs lower-tier VC valueHarry demonstrates keen industry insight by reframing why the 'founders don't need VCs' line exists, noting that lower-tier firms lack the operational door-opening capability that Bicycle possesses.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Welcoming the Guests & The Formation of Bicycle | 2 | 2 | 1 | 1 | The conversation opens with warm pleasantries and personal anecdotes about how Marcelo and Shu met. Harry asks open-ended questions about their partnership and complementary operational versus investing skills. | |
| Why the Name "Bicycle"? | 2 | 3 | 1 | 1 | Shu explains the symbolic meaning behind naming the fund Bicycle, referencing human-powered technology and timeless democracy. Marcelo adds a story about Steve Jobs calling the Mac the bicycle of the mind. | |
| Do the Best Founders Need Venture Capitalists? | 5 | 5 | 4 | 6 | Harry challenges the value of VC involvement by stating that the best founders operate in isolation and do not need investors. Shu directly rejects this premise, citing basketball analogies to argue that great founders actively seek coaching and hard truths. | |
| Mindset of Investing Your Own Capital | 3 | 3 | 2 | 2 | Marcelo highlights that Bicycle is investing over $200M of their own personal capital, shifting the dynamic to peer partnership. Shu notes that putting personal wealth on the line eliminates passive portfolio bet-making. | |
| Delivering Hard Truths and Boardroom Misalignments | 3 | 4 | 2 | 2 | Harry asks how to effectively deliver hard feedback to founders without being confrontational. Marcelo shares that drawing from real operator mistakes builds credibility, while Shu emphasizes active listening and asking framing questions rather than pontificating. | |
| Trusting Your Gut & The Common Mistake | 3 | 3 | 1 | 2 | Marcelo advises founders to trust their intuition over conflicting board member opinions. Shu outlines Bicycle's strategy of targeting the LATAM Series B funding gap between early-stage seed funds and late-stage crossover investors. | |
| SoftBank Lessons & Portfolio Construction | 4 | 4 | 1 | 2 | Marcelo contrasts SoftBank's broad portfolio deployment strategy with Bicycle's concentrated 10 to 14 company approach focused strictly on quality over quantity. Shu emphasizes that a small portfolio requires genuine mutual alignment with founders. | |
| Overcoming Regional Misconceptions & Proving Growth Equity | 3 | 4 | 1 | 2 | Shu and Marcelo address global misconceptions about LATAM, highlighting strong macroeconomic drivers like nearshoring in Mexico and critical lithium reserves. They explain that LATAM uniquely features more market opportunities than available capital. | |
| Homogeneity vs. Fragmentation in LATAM | 3 | 5 | 2 | 3 | Harry asks whether LATAM should be viewed as a unified block or a fragmented region. Shu corrects simplistic views by breaking down the distinct scale and central bank maturity of Brazil and Mexico relative to the rest of Spanish-speaking LATAM. | |
| Foreign Capital Withdrawal & Competitors | 4 | 4 | 1 | 2 | Harry inquires about the retreat of foreign tourist capital from LATAM. Marcelo welcomes the departure of speculative investors, arguing that it leaves room for committed regional specialists to build sustainable tech giants. | |
| The Necessity of Local Presence & Cultural Nuances | 3 | 6 | 1 | 2 | Shu illustrates why local presence is essential by sharing a trip to inner Brazil to find high-performing companies that foreign VCs miss. He educates Harry on Brazil's advanced financial infrastructure, including PIX instant payments and capital market depth. | |
| LATAM Liquidity: Local Listings and M&A | 5 | 6 | 3 | 6 | Harry presses Shu on whether non-US public listings can deliver true fund-returning scale. Shu pushes back, clarifying that growth equity underwriting relies on steady multi-X returns and local M&A rather than high-risk early-stage power-law home runs. | |
| Portfolio Risk & LATAM's Talent Ecosystem | 3 | 4 | 1 | 2 | Marcelo outlines how Bicycle aims to bridge LATAM's missing growth-stage funding to prepare companies for public listings. Shu details how successful regional tech companies like Rappi are generating a self-sustaining cycle of entrepreneurial talent. | |
| Lessons and Mistakes from SoftBank (FTX, OpenAI) | 3 | 4 | 1 | 3 | Harry asks what mistakes from SoftBank Bicycle is correcting. Shu explains shifting from high-touch support structures to a focused, selective touch, while Marcelo emphasizes aiming for consistent doubles and triples over speculative grand slams. | |
| Work-Life Integration & "Life is One" Philosophy | 3 | 3 | 1 | 2 | Harry reflects on his work-centric identity. Shu and Marcelo explain their integrated view on work and life, arguing that doing what you love removes artificial boundaries between career, family, and play. | |
| Having Hard Discussions & Partnership Dynamics | 3 | 3 | 2 | 2 | Marcelo candidly shares how hard discussions reduced their core partnership from three partners to two. Shu notes that visceral internal discomfort is the clearest indicator that a difficult conversation must happen immediately. | |
| Quick Fire Round: Lessons, Misses, and the Steve Jobs Story | 4 | 5 | 3 | 3 | During the quickfire round, Marcelo tells the origin story of phone buyback programs with Steve Jobs and reflects on losing $150M in FTX due to FOMO. Shu criticizes passive beta investing in VC and excessive decision speed. |
Statements from this episode (43)
Nyatta and Claure Met the Day Their Daughters Were Born
“Our two daughters were born on the exact same day, and that's when we met.”
Claure: I Am a Good Operator, Not a Good Investor
“I don't think I'm a good investor. I think I can spot good businesses, I can spot good entrepreneurs, but there is a master to invest in, and what I can do is I can bring opportunities, and I can then pass them up to Shu, and Shu often analyzes them a lot bett…”
Claure: The Era of Passive Dumb Capital Is Over
“And at the end, I believe that the new firms are going to be the ones that have the ability To help entrepreneurs alter the course of their business. I think the days of just dumb capital with access are long gone. Those were the days in which capital was free…”
Nyatta: LatAm's Main Opportunity Is the Middle and Bottom of the Pyramid
“And in places like Latin America, where the opportunity is the middle of the pyramid, the bottom of the pyramid, nothing represents that better than a bicycle.”
Stebbings: The Best Founders Never Need Venture Capitalist Help
“I actually tend to find that always, in the same vein as like a founder's fund, the best founders never need me, and they just operate in isolation, and I might be there, but they don't need me.”
Nyatta: Great Founders Demand the Truth, Average Ones Want Isolation
“Average founders want to be left alone. Good founders want to be coached. Great founders want to hear the truth. Great founders do not want to be left alone, and often just having a reflection in the form of a really good board meeting.”
Claure: Bicycle Capital Partners Committing $200M of Their Own Money
“When you look at Bicycle Fund One, We're bringing our own capital. We're probably one of the few funds who, we're bringing more than two hundred million dollars of our own money, right?”
Nyatta: Caring and Skin in the Game Drive Founder Success
“I disagree with that. I think caring matters, and the more you care, the more it matters. Second time founders can be successful if they don't need the money, but first time founders can be successful if we really need the money. I don't think there's a clean …”
Claure: Nearly Every Startup Founder Has Faced Bankruptcy
“Every single founder has been in the verge of bankruptcy. Very few have not been.”
Nyatta: Early-Stage VCs Prioritize Quick Markups Over Durable Businesses
“BCs want to mark up the company. Often that's the goal, especially if you're at the early stage, right? You want the A to be lower than the B by some margin, and then you want to raise a new fund on the back of the B or C. That's a very different goal from the…”
Claure: Advice From Non-Operator VCs Is Cheap and Confuses Founders
“In many cases, I've seen so many board meetings, VCs who've never built businesses, or who've never been around great businesses. I'm just, everybody gives, advice is, is cheap, it's free, right? And many founders sometimes get confused.”
Claure: Great Founders Are 90% Right When Trusting Their Gut
“At the end, a great founder, well, you know what they'll do? They're gonna listen to all of us, but at the end, they're gonna trust their God. And their God is 90, or our founder is 90% right. And when you go back to them and say, look at the last 10 decisions…”
Nyatta: LatAm Venture Funding Dropped From $16B to Under $1B Per Quarter
“And in 2021, notably, venture went from something like four and a half Billion a year to sixteen billion a year. Now it's back to less than a billion a quarter. So we're back to the four and a half.”
Claure: Bicycle Capital Raised $500M Fund With Just Five LP Calls
“It's a Mubarala, who, Mubarala wanted to make a bet in Latin America, and we've known Mubarala for a while, both you and myself, and then we called five other LPs. We made five phone calls, and the five of them said yes, and it was my family office, so we real…”
Nyatta: Bicycle Capital Will Limit First Fund to 10-14 Companies
“We want a small portfolio in the first fund. We want it to be personal with every single company. We'll only invest in companies that are excited to have us as investors. We're not fighting to get into rounds. If they don't want us, it's okay. We don't have to…”
Claure: LatAm GDP Is Double India's With One-Third the Population
“And Latin America, if you add the GDP of Latin America, we happen to be two X India with one quarter of these people or one third of the people.”
Claure: Nubank Is the World's Best Digital Bank
“You look at Nubank. Great example. To me, the world's best digital bank.”
Claure: Three of Uber's Top Five Global Cities Were in LatAm
“When we were investors in Uber, you know, we had to keep it a secret that after New York, three of the top five cities were Latin American cities.”
Claure: LatAm Is the Only Market Where Opportunities Exceed Capital
“Latin America is, to me, the land of opportunity, and I think Latin America is the only place where, which is great, because there are more opportunities than capital available. Everywhere else, There's more capital than opportunities available, which drives c…”
Claure: The Next Decade Will Be LatAm's Best Economic Period
“I am a huge believer in the macro story of Latin America, and I think the next 10 years are going to be the best 10 years of Latin America for two very, very simple reasons.”
Claure: Bolivia, Argentina, and Chile Hold 60% of World's Lithium
“Few people know that between Bolivia, Argentina, and Chile, that's 60% of the world's lithium. I mean, that's, Bolivia alone is one-third of the world's lithium.”
Claure: Brazil Will Become the World's Largest Food Exporter
“Brazil will become the largest food exporter in the world, so all that means is this com, these countries are going to be, I would call them economically sound.”
Nyatta: Brazilian and Mexican Currencies Outperformed Due to Early Rate Hikes
“The currencies of Brazil and Mexico have been some of the best performing currencies in the world because the central banks hiked early.”
Claure: Brazil and Mexico Will Rank Among Top 10 Global Economies
“It is expected that both the Brazilian and the Mexican economy Will be among the top 10 economists of the world, so it's nice.”
Claure: General Atlantic's Best Investment Returns Come From Latin America
“If you look at the returns of GA, people often don't know, but if you truly study GA, the great returns have come from Latin America.”
Nyatta: Series A Is the Most Competitive Venture Stage
“I think the A is where the elbows are sharpest. Seed, you get a lot of people coming together. Growth, you get a number of people coming together.”
Nyatta: Sourcing LatAm Deals in the US Creates Adverse Selection
“There's a lot of adverse selection. There's some founders who Might or might not be great who play really well in New York and in San Francisco. And so if you wait for them to come to you, that's all you'll think Latin America is.”
Nyatta: Latin America Accounts for 25% of Global Fintech Companies
“Latin America has something like 25% of the world's fintechs. 25%, a quarter of the world's fintechs are in Latin America.”
Nyatta: Brazil Is the Most Sophisticated Financial Market Globally
“Brazil is probably the most sophisticated financial market I've ever come across.”
Nyatta: Sub-$1B Tech Companies Should List in Brazil Over NASDAQ
“You don't want to be a sub-billion dollar company on the NASDAQ. You'll be a rounding error for people. But from, I don't know, five hundred million up to a few billion, you can list very comfortably in Brazil.”
Nyatta: Bicycle Capital Targets 2x-4x Returns Rather Than 10x-20x
“Growth is different from early stage. Not every investment has to have the potential to be a fund returner. You could have every investment have the potential to be somewhere between two and four X in growth, and that's great. So if you speak to LPs, the expos…”
Claure: LatAm Historically Had World's Lowest VC Investment to GDP
“Latin America had the lowest percentage of venture investing as the percentage of GDP of whatever than any other region in the world, I think as close to Africa.”
Nyatta: Rappi Is a Top Contributor of Alumni Founding YC Startups
“Rappi is one of the largest contributors to Y Combinator in terms of alumni. Rappi alumni becoming YC companies. One of the largest contributors within the YC universe.”
Nyatta: Smaller, Selective Fund Sizes Work Better in Latin America
“The smaller, selective, more personal touch trying to change a company's trajectory one at a time Is a better approach for a region that still doesn't have the full ecosystem maturity. So that's the most fundamental thing I've changed. I think slightly smaller…”
Nyatta: Work and Play Are Integrated Components of a Single Life
“Work and play are not different things. They are the same thing, which is life. And that's a beautiful concept, because there's not this partition of what you do and who you are.”
Claure: Bicycle Capital Started With Three Partners Before Consolidating to Two
“We had a third partner. And we, we're only two partners. And we were three when we started, and it was those hard discussions that made us be two.”
Nyatta: Reluctance to Have a Conversation Signals That It Must Happen
“When a discussion is going to be hard, your body tells you because you don't want to have it. And that's the strongest signal that that's exactly the conversation that should happen.”
Nyatta: Indexing and Trend-Chasing in VC and AI Will Fail
“Passive beta capture, you know, this whole idea that you just buy an index of tech, and you sit aside and let it perform, I think that's gone. I think you have to be a stock picker, and so people that are just trying to place a range of bets, I don't think tha…”
Claure: Pitching Steve Jobs Created the Mobile Phone Trade-In Model
“So back then, I used to own Brightstar. And I had an idea of how could Apple actually double their sales. And after many emails to Steve Jobs, which he wrote me back, no interest. One day he got tired of everybody pinging him that he had to meet me. So he agre…”
Nyatta: SoftBank Evaluated OpenAI Around 2017 but Passed on Investing
“So when we were at SoftBank in 2017, I think thereabouts, MASA, correctly, was all over AI, and the team was small enough that we were all focused on the topic and looking around at what was interesting and being built in the world of AI, and we came across Op…”
Claure: I Invested $150M Into FTX at SoftBank Due to FOMO
“So I invested hundred and fifty million dollars on FTX, which I mean, apologies to SoftBank, because I should have never made that investment, but it's probably one decision that has changed my life forever. I'm never going to invest in something that I don't …”
Nyatta: Exploding Term Sheets Are Nonsense and Deal Speed Is Overvalued
“I think we've fetishized moving quickly, and it's just not that valuable especially at the growth stage, but I think even at the early stage, the whole idea that I have an exploding term sheet that's going to expire this Friday, first of all, is nonsense. Term…”
Shorts cut from this episode
▶ I Pitched A $1BN Idea To STEVE JOBS 📱🍎 #shorts · 20VC with (@59:16)
▶ Great Founders All Have This Trait 👀 · 20VC with Harry Steb (@8:01)
▶ I gave a $1BN idea to Steve Jobs -- Marcelo Claure · 20VC wi (@59:16)
▶ Brutal Prediction from Bolivia's Richest Man, Marcelo Claure (@1:09:06)
▶ Advice to anyone trying to build something.. · 20VC with Har (@52:48)