The Exchanges

Q want to move to the region itself, though, and start there and kind of go top down. When we think kind of back to the historical perspective, you know, so much has changed. Today, LATAM is one of the hottest regions. So when we go back to the founding of Kazakh, what did the ecosystem look like then? And I guess what are, like, the fundamental differences compared to today?

A Yeah. So if you allow me, I would go all the way back to the founding of Meli Days and say that until 98, 99, there was nothing that could be called a tech ecosystem. There wasn't even a word for entrepreneur or a word for startup in Spanish, and then there was suddenly this brief window that opened in 99, maybe for 18 months, and then the bubble burst, and probably nuclear winter for the next five, six years. When we raised money at Meli, there was not Even one VC firm that was operating out of LATAM. This was 20 years ago, and no international VCs had any interest in LATAM. So all of our funding at Melly came from some vehicles that were set up by banks that had a presence in the region, like Goldman and JP Morgan. They were our investors. Then nothing at Desert. Gradually, in 2006, seven, some funds like Tiger, GA, They began to look into some of the surviving companies, and they began to do some later stage rounds. But when you look now at the picture in 2021 versus 20 11, when there was very, very little, it is obviously materially stronger. You read the headlines, so many things going on. And to put this in perspective, 20 21 versus 20 11, our first fund was a hundred million dollars in 2011. This year we raised a billion between our early stage and our opportunity vehicles. There are several other local funds. Every global investor is looking into the region, mostly doin…

AI assessment note: “most significant difference today versus 20 11 when we were launching Kasek is the depth”

Q You said about many companies going after the same problem there. One criticism almost held at LATAM is that a lot of the companies that are reflections of X, they are copycats of, you know, a different company in the US or elsewhere. How do you respond to that? And do you think that's fair? And actually, do you mind it if they're actually really sustainable businesses?

A Today, I think that is a very unfair question. Statement. But by the way, we have a lot of respect for the copycats. They require amazing execution. They require a lot of adaptations. Over time, they diverge from the company that inspired them, and sometimes they end up being not only quite different, but also much better than the source. But back to the question, this ecosystem has evolved in such a great way that the region is now generating global innovation leaders, and we see so many Cases. Notco that announced this round a few. It has global aspirations. It has the most original strategy in the space. It has proprietary and patented AI engines, and it has the best portfolio of products in the food tech in the world, and the list goes on and on and on, and you can add Nubank is not only the largest challenger bank in the world. We think one day it could become the largest bank without the challenger. They will become an incumbent bank, the number one in the world, and the same for Kinto and Dar in properties, and Kavak in cars, buying and selling, renting and embedded finance, and these teams are the best in their verticals in the world, and they could go on and lead with innovation and with market cap.

AI assessment note: “Today, I think that is a very unfair question. Statement.”

Q want to move to the region itself, though, and start there and kind of go top down. When we think kind of back to the historical perspective, you know, so much has changed. Today, LATAM is one of the hottest regions. So when we go back to the founding of Kazakh, what did the ecosystem look like then? And I guess what are, like, the fundamental differences compared to today?

A Yeah. So if you allow me, I would go all the way back to the founding of Meli Days and say that until 98, 99, there was nothing that could be called a tech ecosystem. There wasn't even a word for entrepreneur or a word for startup in Spanish, and then there was suddenly this brief window that opened in 99, maybe for 18 months, and then the bubble burst, and probably nuclear winter for the next five, six years. When we raised money at Meli, there was not Even one VC firm that was operating out of LATAM. This was 20 years ago, and no international VCs had any interest in LATAM. So all of our funding at Melly came from some vehicles that were set up by banks that had a presence in the region, like Goldman and JP Morgan. They were our investors. Then nothing at Desert. Gradually, in 2006, seven, some funds like Tiger, GA, They began to look into some of the surviving companies, and they began to do some later stage rounds. But when you look now at the picture in 2021 versus 20 11, when there was very, very little, it is obviously materially stronger. You read the headlines, so many things going on. And to put this in perspective, 20 21 versus 20 11, our first fund was a hundred million dollars in 2011. This year we raised a billion between our early stage and our opportunity vehicles. There are several other local funds. Every global investor is looking into the region, mostly doin…

AI assessment note: “most significant difference today versus 20 11 when we were launching Kasek is the depth”

Q You said about many companies going after the same problem there. One criticism almost held at LATAM is that a lot of the companies that are reflections of X, they are copycats of, you know, a different company in the US or elsewhere. How do you respond to that? And do you think that's fair? And actually, do you mind it if they're actually really sustainable businesses?

A Today, I think that is a very unfair question. Statement. But by the way, we have a lot of respect for the copycats. They require amazing execution. They require a lot of adaptations. Over time, they diverge from the company that inspired them, and sometimes they end up being not only quite different, but also much better than the source. But back to the question, this ecosystem has evolved in such a great way that the region is now generating global innovation leaders, and we see so many Cases. Notco that announced this round a few. It has global aspirations. It has the most original strategy in the space. It has proprietary and patented AI engines, and it has the best portfolio of products in the food tech in the world, and the list goes on and on and on, and you can add Nubank is not only the largest challenger bank in the world. We think one day it could become the largest bank without the challenger. They will become an incumbent bank, the number one in the world, and the same for Kinto and Dar in properties, and Kavak in cars, buying and selling, renting and embedded finance, and these teams are the best in their verticals in the world, and they could go on and lead with innovation and with market cap.

AI assessment note: “Today, I think that is a very unfair question. Statement.”

Q kind of staying close. Final, final one for the quick find. It's just like, you mentioned the billion now across the two funds that you have that you raised this year. When you think about five, 10 years out, do you want Kazakh to be a five billion dollar fund, a ten billion dollar fund? How do you think about what you want Kazakh to be over the long term?

A So, we, We are fully convinced that we are first and foremost an early stage investor, and for that there's a certain size of fund that has a limit to ensure that you stay very effective and you continue to produce outsized returns. So that will not change, and maybe initially it took three years to raise between fund and two, and then it took two years, and the last time it took 18 months, so maybe we raise With more consistency, but that will probably not change very much. We tend to like this opportunity fund complementary strategy, so we will see how that evolves, but probably the size of that fund will continue to increase over time. Our first one was below three hundred million. The second one was about five hundred million dollars. Maybe the next one is larger than, because we're also building a larger portfolio. Now we have a hundred investments that we've made And we can invest in a subset of those out of the opportunity and produce outsized returns as well in a higher IRR because these are shorter cycles. They are lower risk and maybe less upside, but they are great vehicles as well.

AI assessment note: “there's a certain size of fund that has a limit... that will not change”

Q I did a reference on the founder and they said, Founder was terrible, terrible employee, crap in their company, essentially. It was a six million pre-seed round, and now it's a six billion dollar company. It was a pretty decent sized mistake. So now I don't actually place much weight on references when it comes from former employees. What's your biggest miss, and how did it change your investing style?

A Interestingly, during this first decade, we didn't have a lot of misses. We know that in the second decade, we will have many more, because the market now is much Deeper. If I had to name one company, it would be the local. They just IPO'd. We met the team many years ago. We really liked the team, so not only we referenced them, but we got to know them, and we thought they were of the highest caliber, but their initial approach to the business was something that we were not totally convinced of, and then they adjusted and adapted their business model, and our fault was that we didn't stay close enough to See how they were evolving in the right way. And by the time we realized that we tried to invest, but it was too late, much higher valuation was not necessarily the right fit for this transaction to happen. So the lesson there was whenever a team is amazing, but there's something that you don't like. So make sure that you follow up and you stay close. And on the specific question about the references, we've got a bunch of cases, some of our best companies, we did references and they are Never stellar. They tend to be very good on some dimensions, but in most cases, if they were employees or managers in larger corporations, there's always some supervisor or some boss that didn't like them so much. So we try to put everything together within the tea leaves and see what we come up…

AI assessment note: “If I had to name one company, it would be the local.”

Q ask, and we mentioned kind of the evolution of the ecosystem, the increased interest. You know, I've done a couple of deals now in LASAM, and deals that started off at two on eight suddenly turn into eight on 40 with the international interest that comes. Bluntly, I'm a little bit worried that it's getting a little bit too competitive too early. How do you feel, and are you concerned?

A Yeah, for a continent that has been historically constrained by By capital, it is great that there's availability of resources, and with the hat of the founders, this is amazing. What I would say is that we see two types of scenarios. Some teams that understand that they need to build fundamental value, that they need to build a great business at some point to have positive unit economics, and if with more capital, they can build something in three years that would otherwise take them five years, That is good news. That is really good news for everyone, and probably the entry point is higher, but maybe you get to a higher valuation before the original plan, so that is great. What is concerning is that some spaces get very crowded, and there are way too many companies going after the same opportunity, and each one of them gets funding, and they basically compete for short-term vanity metrics, and not necessarily for building fundamental value, and even if after A while one of those teams emerges as the winner in the space, probably as an investor on a price per share basis, because there has been so much dilution along the way. The appreciation is not very exciting. So we shy away from those types of spaces where capital is going to be the main source of mode. And we're really focused on, on teams that are building something that we think can become really large. And if the entr…

AI assessment note: “What is concerning is that some spaces get very crowded”

Q Can I just dive in before we move to Kazakh? I'm just so fascinated because I've never seen a macro Bubble and burst. Like, how did seeing that, seeing the nuclear winter that followed, how did it impact your mindset today, and maybe how you think about the types of businesses that you love to invest in?

A Yes, I think when you are born and raised in Latam, they give you financial crisis for breakfast, so this is something that we have all grown up with, even during our elementary school days, and high school days, and college days, there's always something going on, So of course, the invention of the bubble bursting was of a different proportion, and it was extremely hard because everything vanished, everything disappeared in front of our eyes. But I'm sure that we were better suited than most of the founders from more developed countries, that they were not aware that something like this could happen. And the DNA of the company, MercadoLibre, even before this, even in the crazy days where we were getting really huge checks, We had this DNA where we knew we had to build a sustainable business because the music one day could stop. We had to be ready for that.

AI assessment note: “We had this DNA where we knew we had to build a sustainable business”

Q You mentioned shit hitting the fan there. It's one thing that came up in a lot of the references I did pre this interview, and it was your cool kind of, uh, mentality towards crisis situations. How do you think about keeping a supremely cool and level head in moments of real shit hits the fan?

A So I guess part of that is personality. So when there is something stressful going on, I guess I tend to focus on what is the problem and let's discuss what are the solutions and let's Try to see how collectively we can get out of, of this mess. So this is, I guess, how I am. But also, when you think about this, if you're the board member and the team is about to collapse because there's a catastrophe, the last thing that they want is a nervous board member that is adding fuel to the fire. What they need is someone that, that is going to be there to try to calm things down and to help everybody get out of the mess. So even if it's not Who you are, I think you should try to behave like this in these types of situations, because that is the way that a board member can really help a nervous team get out of a tough spot.

AI assessment note: “I tend to focus on what is the problem and let's discuss what are the solutions”

Q Can I ask, what do you think makes the best board members today? You've been on both sides as an operator and as an investor and board member. For you, what makes the best board members, and how would you advise me joining boards today as a younger person?

A Yeah, so I think part of us being motivated to start Kasek with Hernan was that we had board members at Mercado Libre who were members of the banks or these financial institutions, and they were really great guys and really smart guys and well-intended, but they had no idea of what was going on in our daily lives and how hard it was and how stressed we were, and I think empathy and the teams and trying to understand what is happening there and be available and Make sure that you don't want to be the smartest guy in the room. You're there to help. You need to understand that you're a support cast. You're in the passenger seat. Be very humble about that. Everything that you've got, and when something is wrong, you have to raise your hand and say, I really think this is not working. We should do something about this. But then at the end of the day, you don't operate and you don't decide. So it's more influencing and making sure that you gain the respect that you're heard.

AI assessment note: “You're there to help. You need to understand that you're a support cast.”

Q I asked you for 60 seconds for one book, and we got that. Listen, it's always great to have more resources. Tell me, what's your biggest strength and your biggest weakness?

A One key strength is probably an ability to see what is important, even in the most complex or even anarchic situations that we see so often in startups. And this extends probably to a good read around what is going on with the harder facts, but also good perceptions around some of the softer, intangible signals. And on the weakness side, I'm an introvert. I would define myself as an introvert, and I really don't like the spotlight. I love one-on-ones. I love small groups, deep conversation, but this job requires one-to-many public exposure, many different Types of occasions. I don't do a lot of those because I find them stressful. I wish I could relax and enjoy them, but so far have not learned how to, and I think this is a weakness to really get this job done to its best.

AI assessment note: “One key strength is probably an ability... And on the weakness side, I'm an introvert.”

Q Final one. What's the most recent publicly announced investment, and why did you say yes and get so excited?

A So, one is, is Bitso, and we're very excited because we stayed for years on the sidelines on crypto, and we made it in 2020, and this is a company that we were disciplined, and we kept on following for years despite that prior rounds we had passed, and then after our first investment a few weeks ago, we doubled down when they raced again out of our opportunity, and we're very excited because Bitso is the leading crypto platform in Latam. They have incredible team, exponential growth, amazing company. And you asked for one, but I will add very shortly, NotCo because it came out the news, I think it was yesterday or a couple of days ago. And here we participated out of our opportunity fund as well. We had invested in the company. It had like a small kitchen with seven employees in Chile several years ago when we led the Series A. So excited that we managed to invest in several rounds out of our early stage. And now we managed to support the company out of the opportunity fund.

AI assessment note: “So, one is, is Bitso, and we're very excited because”

Q go on, especially when you look at the Kazakh portfolio. Another one that LPs often throw at me when I talk about my excitement for last time is they say, yeah, But I mean, there's not really a sustainable route to exit in public markets, is that? The local markets can't really facilitate it, the US markets. How do you respond to access to public markets when questioned by LPs?

A So this was being asked to us in 20 11, you were asking when we were raising our first fund, was fully leap of faith, but at the end, with a little bit of skepticism, everybody asked, so are these companies, once you fund them, is there gonna be enough capital to follow on? And then they would ask, and once They scale. Is there going to be any path to liquidity? To the first question was fully answered. Every one of our portfolios, the companies have raised billions and billions of dollars after we have invested, so there's plenty of interest, and today more than before, for sure, and in terms of path to exit, probably on the M&A front, we're still one step behind what you see in the US, where private equity acquires companies, or there are many strategics that would make this These hundred million dollar acquisitions. We're seeing more and more of that. We have a lot of confidence because the companies that have scaled in the region, the ones that are two, three, five, ten billion dollar in valuation, they are making acquisitions. So we think that the combination of the startups that have scaled, plus the incumbents that desperately need a digital strategy in their space, plus some of the international tech companies that want to have a presence in LATAM. Overall, M&A will be happening more But this is lagging some of the other key elements of the ecosystem. And then IPOs. The…

AI assessment note: “now you have Stone, and PaxSeguro, and XP, and Globant, and Delocal”

Q Can I ask you, what's been the hardest thing in terms of the scaling of Kazik? You know, you said that a 100,000,001st, a billion now raised between your two funds. With the scaling of the firm, what's been the most challenging element for you?

A We're a very focused early stage fund, and that's what we do. And every investment, the bar is that it will become a fund maker. So if we don't think that it has the potential of becoming a fund maker, we would not do an investment. Of course, that happens in some cases. It doesn't happen in all, but we don't have the crystal ball. But in theory, when we analyze the opportunity, that is the criteria. Now we have developed this opportunity fund that is born out of frustration. For example, in Nubank, we invested in the seed investment together with Sequoia, so it was a PowerPoint really early on, David Velez by himself, and that's when, when we joined, and then we participated out of the fund one in several rounds in the series A and the B and the C and the D, but we ran out of reserves, of course. We had reserved most of the fund to continue investing in Ubang, but we ran out of reserves, and when the company was racing around an evaluation where we still thought it could be a fund maker from there, we ran out of resources. Of dry powder. So that inspired us to raise an opportunity fund, which is designed mostly to continue following up on the companies that we know really, really well. And the criteria is that at a minimum, the return will be five X from the point at which we invest, hopefully 10 X from the point at which we invest. And so far we have invested like in 10 compa…

AI assessment note: “we ran out of reserves... we ran out of resources. Of dry powder.”

Q go on, especially when you look at the Kazakh portfolio. Another one that LPs often throw at me when I talk about my excitement for last time is they say, yeah, But I mean, there's not really a sustainable route to exit in public markets, is that? The local markets can't really facilitate it, the US markets. How do you respond to access to public markets when questioned by LPs?

A So this was being asked to us in 20 11, you were asking when we were raising our first fund, was fully leap of faith, but at the end, with a little bit of skepticism, everybody asked, so are these companies, once you fund them, is there gonna be enough capital to follow on? And then they would ask, and once They scale. Is there going to be any path to liquidity? To the first question was fully answered. Every one of our portfolios, the companies have raised billions and billions of dollars after we have invested, so there's plenty of interest, and today more than before, for sure, and in terms of path to exit, probably on the M&A front, we're still one step behind what you see in the US, where private equity acquires companies, or there are many strategics that would make this These hundred million dollar acquisitions. We're seeing more and more of that. We have a lot of confidence because the companies that have scaled in the region, the ones that are two, three, five, ten billion dollar in valuation, they are making acquisitions. So we think that the combination of the startups that have scaled, plus the incumbents that desperately need a digital strategy in their space, plus some of the international tech companies that want to have a presence in LATAM. Overall, M&A will be happening more But this is lagging some of the other key elements of the ecosystem. And then IPOs. The…

AI assessment note: “now you have Stone, and PaxSeguro, and XP, and Globant, and Delocal”

Q Can I just dive in before we move to Kazakh? I'm just so fascinated because I've never seen a macro Bubble and burst. Like, how did seeing that, seeing the nuclear winter that followed, how did it impact your mindset today, and maybe how you think about the types of businesses that you love to invest in?

A Yes, I think when you are born and raised in Latam, they give you financial crisis for breakfast, so this is something that we have all grown up with, even during our elementary school days, and high school days, and college days, there's always something going on, So of course, the invention of the bubble bursting was of a different proportion, and it was extremely hard because everything vanished, everything disappeared in front of our eyes. But I'm sure that we were better suited than most of the founders from more developed countries, that they were not aware that something like this could happen. And the DNA of the company, MercadoLibre, even before this, even in the crazy days where we were getting really huge checks, We had this DNA where we knew we had to build a sustainable business because the music one day could stop. We had to be ready for that.

AI assessment note: “we knew we had to build a sustainable business because the music one day could stop”

Q But when you look at the scaling, what do you think on reflection has been the most challenging element?

A So we have a model where we have a team of investors. Since day one, we thought that our value add was that we would try to help the companies in whichever way they needed, and we identified that the two key areas of interest were anything related to cracking growth, and every company has a different challenge, so sometimes it's product, sometimes it's Sometimes it's marketing, distribution, and also the other layer is recruiting people. So we have teams internally that dedicate all of their time and focus on helping companies, and it is hard to scale sometimes these teams to make sure that they are fully available, and as the portfolio grows, we need to continue bringing the type of talent that will be there available to help the teams.

AI assessment note: “it is hard to scale sometimes these teams to make sure that they are fully available”

Q It is so good to have you, but I do want to start today with a little on you, because you had this incredible operational career, and then made your way into venture. So tell me, how did you make your way into venture, and how did you come to co-found Kazak over 10 years ago?

A Yeah, sure. Before CASEC, I was part of the founding team, Mercado Libre, and that was hyper intense experience that led me to venture. We had the most extraordinary roller coaster journey with something like a hundred competitors in the region doing exactly what we were doing at the peak of the bubble in early 2000. We had a slide in our pitch deck that showed all of the logos of each one of these competitors. And then the bubble burst, and a nuclear winter came, where there was no funding available at all for the next five years or so, and this sounds really difficult to understand in the current environment, but it became impossible to close around. Zero additional capital was available, and all sources of financing had vanished. So I think we recognized faster than others that the times had changed, and we focused on building the best technology and the best product experience, With a disciplined ROI mentality. At the time we acquired some of our competitors to consolidate the market. We brought eBay as an investor, and as a reminder, eBay in 2002 1001 was the equivalent of Amazon in 2021. And this gave peace of mind to our investors as we had generated a potential source of exit. And then a few more things. In 2003, we incubated our payments Platform Mercado Pago, and today you would say that we launched our fintech strategy. No words like that in those days. And fast forw…

AI assessment note: “that was hyper intense experience that led me to venture.”

Q Yeah. Okay, so we're in 2007. You've IPO-ed Mercado Libre. Everything is incredible, and it's been an incredible journey. Why decide to leave, and why found Kazem?

A Yeah, so it was extremely hard work to get there. All of the things we were doing, we had to reinvent the wheel many times, and I stayed on board after the IPO for a couple of years as CFO of a publicly traded company, and I was ready to move on. I was quite convinced That I would have more impact reinventing myself as an investor versus continuing as an operator. It was an incredibly hard decision because Meli had a great culture. By then, we were a group of friends as much as professional partners, but the timing to leave was the right one. We had successfully IPO'd in the most volatile times. We talked about 19 nine within 2007 and 2008. We IPO'd in 2007 when the subprime mortgages thing was beginning to appear. And then, 2008, we were running the company. I think our stock price, we had been public for a few months, went down 90%. Like everybody else, most companies in 2008, the markets really did a lot of damage. But by the end of that year, we were in great shape. The business was always very solid. Our stock had gone down, but we were making money. We had 30% EBITDA margins. We were doubling our business year over year. We had no debt. So this was all something external to us. By the way, we started a program to buy back stock. It was amazing. We were buying stock, I think, at a price something like below 10 dollars, something like seven, eight dollars per share, and we …

AI assessment note: “I was quite convinced That I would have more impact reinventing myself as an investor”

Q Can I ask, what do you think makes the best board members today? You've been on both sides as an operator and as an investor and board member. For you, what makes the best board members, and how would you advise me joining boards today as a younger person?

A Yeah, so I think part of us being motivated to start Kasek with Hernan was that we had board members at Mercado Libre who were members of the banks or these financial institutions, and they were really great guys and really smart guys and well-intended, but they had no idea of what was going on in our daily lives and how hard it was and how stressed we were, and I think empathy and the teams and trying to understand what is happening there and be available and Make sure that you don't want to be the smartest guy in the room. You're there to help. You need to understand that you're a support cast. You're in the passenger seat. Be very humble about that. Everything that you've got, and when something is wrong, you have to raise your hand and say, I really think this is not working. We should do something about this. But then at the end of the day, you don't operate and you don't decide. So it's more influencing and making sure that you gain the respect that you're heard.

AI assessment note: “You're there to help. You need to understand that you're a support cast.”

Q It is so good to have you, but I do want to start today with a little on you, because you had this incredible operational career, and then made your way into venture. So tell me, how did you make your way into venture, and how did you come to co-found Kazak over 10 years ago?

A Yeah, sure. Before CASEC, I was part of the founding team, Mercado Libre, and that was hyper intense experience that led me to venture. We had the most extraordinary roller coaster journey with something like a hundred competitors in the region doing exactly what we were doing at the peak of the bubble in early 2000. We had a slide in our pitch deck that showed all of the logos of each one of these competitors. And then the bubble burst, and a nuclear winter came, where there was no funding available at all for the next five years or so, and this sounds really difficult to understand in the current environment, but it became impossible to close around. Zero additional capital was available, and all sources of financing had vanished. So I think we recognized faster than others that the times had changed, and we focused on building the best technology and the best product experience, With a disciplined ROI mentality. At the time we acquired some of our competitors to consolidate the market. We brought eBay as an investor, and as a reminder, eBay in 2002 1001 was the equivalent of Amazon in 2021. And this gave peace of mind to our investors as we had generated a potential source of exit. And then a few more things. In 2003, we incubated our payments Platform Mercado Pago, and today you would say that we launched our fintech strategy. No words like that in those days. And fast forw…

AI assessment note: “that was hyper intense experience that led me to venture.”

Q Yeah. Okay, so we're in 2007. You've IPO-ed Mercado Libre. Everything is incredible, and it's been an incredible journey. Why decide to leave, and why found Kazem?

A Yeah, so it was extremely hard work to get there. All of the things we were doing, we had to reinvent the wheel many times, and I stayed on board after the IPO for a couple of years as CFO of a publicly traded company, and I was ready to move on. I was quite convinced That I would have more impact reinventing myself as an investor versus continuing as an operator. It was an incredibly hard decision because Meli had a great culture. By then, we were a group of friends as much as professional partners, but the timing to leave was the right one. We had successfully IPO'd in the most volatile times. We talked about 19 nine within 2007 and 2008. We IPO'd in 2007 when the subprime mortgages thing was beginning to appear. And then, 2008, we were running the company. I think our stock price, we had been public for a few months, went down 90%. Like everybody else, most companies in 2008, the markets really did a lot of damage. But by the end of that year, we were in great shape. The business was always very solid. Our stock had gone down, but we were making money. We had 30% EBITDA margins. We were doubling our business year over year. We had no debt. So this was all something external to us. By the way, we started a program to buy back stock. It was amazing. We were buying stock, I think, at a price something like below 10 dollars, something like seven, eight dollars per share, and we …

AI assessment note: “I was quite convinced That I would have more impact reinventing myself as an investor”

Q But when you look at the scaling, what do you think on reflection has been the most challenging element?

A So we have a model where we have a team of investors. Since day one, we thought that our value add was that we would try to help the companies in whichever way they needed, and we identified that the two key areas of interest were anything related to cracking growth, and every company has a different challenge, so sometimes it's product, sometimes it's Sometimes it's marketing, distribution, and also the other layer is recruiting people. So we have teams internally that dedicate all of their time and focus on helping companies, and it is hard to scale sometimes these teams to make sure that they are fully available, and as the portfolio grows, we need to continue bringing the type of talent that will be there available to help the teams.

AI assessment note: “it is hard to scale sometimes these teams to make sure that they are fully available”

Q incredible in terms of the relationship building aspects that you have with founders. How do you think about that, building that trust and empathy with the founders, but also something that I'm struggling with is building it, one, in a world predicated around Zoom, and then two, with compressed fundraising timelines. How do you think about building that same quality of relationship with the two new worlds that we have?

A Yeah, so we still think that Investing locally is very important, and even though you have Zoom, we believe that the fact that we have been around for 20 years gives us an edge on many dimensions, where one degree of separation from anything that a founder might need might argue that we could not be, we could not be successful VCs in Indonesia, for example. So we really believe that the local factor is very critical, and the building of the relationship It's something that you do over the long term, so we try to connect with the teams before we invest, and we spend as much time as possible. On our decision process, we do a lot of reference check calls. Maybe we do 20 for a founder. By the way, we talk to something like 200 companies for everyone that we invest in, so we spend a lot of time talking to everyone in the ecosystem. And then building trust is by the actions that you take, by what you say, but What you do, you lead with example. You make yourself available 24 by seven, and you provide brutal, honest feedback on anything that is going on. You say what you think, what you believe in. We don't think that diplomacy is something that makes any sense in our industry, but you do that very respectfully, and then you tell the team, this is your opinion, this is your view, but the team makes the decision. They make the call. This is just helping them Get to a better outcome, an…

AI assessment note: “we try to connect with the teams before we invest, and we spend as much time”

Q Okay, so tell me, what's the favorite book and why? What should we be reading on our holidays this summer?

A I love to read. One of my favorite moments in the year is during the break around December, when I write down the list of the 52 books I intend to read over the next 12 months. Of course, it doesn't happen, it's an aspiration, it's impossible to read those many books, but I love the process of doing the research and putting together my list. So, that as a context. So, in terms of favorite, during my high school On college days, I read a lot of fiction. I loved reading Latin American authors, so favorite ones were the usual suspects, Garcia Marquez, Vargas Llosa, Rulfo and Octavio Paz from Mexico, Neruda, Cortázar, but my absolute preference went to Argentine writer Jorge Luis Borges. I basically remember how much I enjoyed reading his very complex short stories that were written with so much beauty, And precision, so it was basically enjoyment. And now I read mostly non-fiction. I love to read about history, economics, politics, psychology. Very, very, very hard to name one, but I would go with guns, germs, and steel. That opened my eyes maybe 10 years ago to big history and how different disciplines interacted. A broader understanding of how we, we got here, basically. And several other authors on that field were incredibly interesting. Insightful, and more recently, like many others, I loved reading the Harari books. I'm sorry, Harry, you asked me, but books or movies, music,…

AI assessment note: “Very, very, very hard to name one, but I would go with guns, germs, and steel.”

Q Can I ask you, what's been the hardest thing in terms of the scaling of Kazik? You know, you said that a 100,000,001st, a billion now raised between your two funds. With the scaling of the firm, what's been the most challenging element for you?

A We're a very focused early stage fund, and that's what we do. And every investment, the bar is that it will become a fund maker. So if we don't think that it has the potential of becoming a fund maker, we would not do an investment. Of course, that happens in some cases. It doesn't happen in all, but we don't have the crystal ball. But in theory, when we analyze the opportunity, that is the criteria. Now we have developed this opportunity fund that is born out of frustration. For example, in Nubank, we invested in the seed investment together with Sequoia, so it was a PowerPoint really early on, David Velez by himself, and that's when, when we joined, and then we participated out of the fund one in several rounds in the series A and the B and the C and the D, but we ran out of reserves, of course. We had reserved most of the fund to continue investing in Ubang, but we ran out of reserves, and when the company was racing around an evaluation where we still thought it could be a fund maker from there, we ran out of resources. Of dry powder. So that inspired us to raise an opportunity fund, which is designed mostly to continue following up on the companies that we know really, really well. And the criteria is that at a minimum, the return will be five X from the point at which we invest, hopefully 10 X from the point at which we invest. And so far we have invested like in 10 compa…

AI assessment note: “So that inspired us to raise an opportunity fund, which is designed mostly to continue”