Sep 23, 2022 · 59m · news
Julio Vasconcellos: Scaling to $100M and 1,200 Employees and then Cratering | 20VC #928 · 20VC with Harry Stebbings
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In this episode of 20VC, host Harry Stebbings interviews Julio Vasconcellos, co-founder of Peixe Urbano and partner at Atlantico, about his transition from a high-growth tech operator to a prominent venture capitalist. Julio shares critical lessons on achieving product-market fit, managing hyper-growth, navigating startup failures, and executing highly concentrated investment strategies within the rapidly evolving Latin American tech ecosystem.
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 20.7% of the talking time here. How this is scored →
Harry as informed peer 4.6 Guest teaching 4.0 Guest disagreement 1.9 Harry pushing back 3.7
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 48:11 Julio rejects growth capital crisis premise
Julio directly opposes Harry's concern about a LATAM growth capital deficit by stating 'I don't share your concern. And let me tell you why', arguing that crossover exit is standard.
Hardest push from Harry ▶ 49:11 Harry refuses guest's optimistic capital framingHarry refuses to accept Julio's calm perspective on growth capital, pressing back with 'Why do you think all the other LATAM managers are so worried about it then? Because I speak to them and they're shitting their pants'.
Biggest teaching moment ▶ 44:48 Julio explains LATAM tech penetration gapJulio educates Harry on regional market potential by contrasting LATAM's 1.5% tech penetration index with China and India, explaining the macroeconomic catch-up trajectory.
Harry holds his own ▶ 35:59 Harry argues for broad portfolio diversificationHarry demonstrates deep venture expertise by citing power-law mechanics and arguing that given unpredictable, massive upside outcomes, funds should maximize lines rather than concentrate capital.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Career Path and Founding Atlantico | 4 | 3 | 1 | 3 | Harry breaks away from his planned schedule to probe into product-market fit versus founder quality, prompting Julio to explain why market dynamics take priority. | |
| The Rise and Fall of Peixe Urbano | 3 | 4 | 1 | 2 | Harry uses questions from mutual friends like Hugo Barra and Enrique to explore the rapid hypergrowth and eventual contraction of Peixe Urbano, while Julio shares lessons on premature expansion. | |
| Insights on Venture from Benchmark & Scott Belsky | 5 | 4 | 2 | 4 | Harry references Bill Gurley and challenges Benchmark's disciplined focus against changing market stage definitions, with Julio explaining how the firm maintains its core focus despite changing labels. | |
| Transitioning from Angel to Institutional Investor | 5 | 4 | 2 | 5 | Harry directly questions whether startup boards add real value, sharing his own skepticism while Julio differentiates between rigid board meetings and strategic advisor conversations. | |
| Fund Strategies & Portfolio Construction at Atlantico | 6 | 5 | 2 | 5 | Harry challenges Atlantico's concentrated strategy against broad portfolio diversification in light of massive power-law outcomes, prompting Julio to defend his reserve capital strategy. | |
| The Latin American Tech Ecosystem & Market Dynamics | 6 | 5 | 4 | 6 | Harry expresses strong concern over the retrenchment of growth capital in Latin America, but Julio firmly rejects the premise by differentiating between crossover capital and committed local growth funds. | |
| Quick-Fire Round | 3 | 3 | 1 | 1 | Harry runs through a lighthearted quick-fire round covering books, favorite angel investors, LP relations, and Atlantico's investment in Fudo. |
Statements from this episode (17)
Facebook had 1M Brazil users vs Orkut's 35M in early 2010
“Facebook had something around a million users at that time in Brazil, ah, and our biggest competitor, which was Google's social network, Orkut, had over thirty five million users.”
Vasconcellos: Market and product fit matter more than the team
“In my view, market comes first. And I think if you have the right model and the right product in that market, I think that's more important than ultimately the team.”
Peixe Urbano hit $100M revenue and 1,200 employees in two years
“Myself and my co-founder Alex, working out of his living room in his apartment in Rio de Janeiro in Brazil. And, you know, fast forward two years later, we were over 1200 employees present in six different countries across Latin America. The company was doing …”
Vasconcellos: Winning multiple markets simultaneously is a recipe for startup disaster
“What I would tell founders is that you have to pick one market, right? And probably one market and one customer, and you really have to nail it and you really have to win that market before you move on to the next one. I think trying to fight a multi front war…”
Vasconcellos: Expanding fund strategy beyond core strengths harms long-term VC returns
“That greed is the number one enemy of returns and, you know, being greedy and kind of expanding your fund or expanding your strategy into multiple different things that maybe you're not the best at probably is, you know, short-term profitable, but sort of long…”
Vasconcellos: Institutional VCs are there to maximize returns, not be friends
“But I think that once you're investing other people's money, you're really there to maximize returns. So you're not there to be a founder's friend, but you help, you're there to help that founder win.”
Stebbings: Founders should focus on operational inputs instead of MRR
“So many people focus on MRR. It's not about fucking MRR. It's about seed expansion. Number of new projects. Like, your MRR is your output. Your inputs are what drives it. Focus on the inputs.”
Vasconcellos: Formal board meetings are unnecessary for strategic alignment
“In, in my experience, having a moment where you bring in different investors and different advisors together, you know, to check in and talk about strategy and talk about direction, that conversation is valuable. Whether that has to happen at a board meeting a…”
Atlantico allocates only 25% of its fund to follow-on reserves
“In, in our case, we're reserved 25% of the fund, right? So we're much, much thinner. We try to have more bets, and we try to concentrate more on those bets once we have that level of confidence.”
Vasconcellos generated 100x returns on angel investments in Ipsy and QuintoAndar
“I think my biggest hit was either an angel investment in Ipsy up in the US or in Quinto Andar in Brazil. You know, and both of those were probably around, you know, a hundred X returns, maybe even more than a hundred X returns”
Vasconcellos passed on Snapchat's seed round due to Facebook conflict concerns
“I'd say the biggest miss I had was not investing at the seed round of Snapchat... Facebook conflicts committee said, oh, and you guys can't invest this because it could potentially be competitive... We said, oh, this whole like disappearing messages thing does…”
LATAM tech penetration is 1.5% of GDP versus 52% in the US
“When you look at that tech penetration index in a more developed country like the United States, that's around 52%. Even if you look at, you know, China, that number is 20%. You look at India, it's 15%. But when you look at what the tech penetration level is a…”
Vasconcellos: COVID accelerated Brazilian e-commerce adoption by three years permanently
“If you look at e-commerce penetration in, in Brazil to take one specific case, we're right now about almost three years ahead of where we would have been in that historic growth curve.”
Vasconcellos: Startup mortality rates in LATAM will rise over coming years
“What that's going to translate into is a greater mortality rate and a greater loss ratio in the next couple of years. But to be honest, I think that where we're going to be in the next couple of years is the normal.”
Vasconcellos: Took 10% to 20% secondary liquidity as an angel investor
“As an angel investor, we often, I often took money off the table. And you know, that was probably 10 or 20% of the total position value. It was never sort of selling the entire position.”
Founders must cut into muscle because running out of cash is fatal
“I think it's healthy sometimes to cut through the fat and into the muscle because you can always undo that later. If you were wrong, maybe you cut a little bit too much. You might have to rehire people or you might have to You know, reinvest in things that you…”
Julio Vasconcellos names Sarah Smith as the most underrated angel investor
“I would say Sarah Smith from the Sarah Smith Fund in Silicon Valley. Sarah's a good friend and we overlapped at Facebook. You know, she was an amazing sales and people leader, both at Facebook and then at Quora afterwards. And she's been sort of a huge inspira…”