A New Take on the VC-Founder Relationship

Intro 00:01
Welcome to Startup Success, the podcast for startup founders and investors. Here, you’ll find stories of success from others in the trenches as they work to scale some of the fastest growing startups in the world, stories that will help you in your own journey. Startup Success starts now.

Kate 00:18
Welcome to Startup Success today. We have Ivan Montoya in studio, who is the managing partner of NuMundo Ventures. Welcome.

Ivan Montoya 00:28
Hi Kate. Nice to speak with you.

Kate 00:30
I’m looking forward to this because you have an interesting background and kind of an interesting philosophy about how you work with founders, which we’ll get into later, but if you could just set the stage and kind of explain to us what led you to NuMundo.

Ivan Montoya 00:47
Yeah. So for those of you old enough, I’ll give you the Reader’s Digest version, so for people who understand that reference. So I was born in Colombia. My parents were doctors. We moved to the US when I was very young, so it was in the early 1970s. Bounced around between New York, New Jersey area, eventually ended up in Houston, and grew up in Houston, right near NASA. And go off to college, and eventually make my way out to the Bay Area in 1995 to go to Stanford Business School. And when I got here, it was literally the beginning of the internet. I think Netscape went public in August. I arrived in September of ‘95 and that’s been 30 years since I’ve been here. You know, after business school, I eventually started to get involved in the world of technology and startups. And I joke, I’ve seen the good, the bad and the ugly. You know, I’ve been at a startup that got sold for a billion. I’ve been at one that didn’t make it and everything in between. About 10 years ago, I really was interested in Angel investing, but didn’t feel I really had an edge or anything different to offer for backing founders here in the Bay Area. Did a few trips back to Columbia, and after a trip, in 2018 thought, well, maybe I can do something different here. And in 2019 I did my first angel investment in a company in Latin America, in Colombia. And then one thing led to another, the pandemic and a bunch of other stuff. And I ended up investing in like 30 companies. And then about three years ago, launched a proof of concept fund, one called NuMundo Ventures, to invest more professionally in backing founders primarily from Latin America. But that’s, that’s the super abbreviated version of the story.

Kate 02:28
I love it. I love how you, you know, had your startup experience, then got into investing and then launched a fund. I mean, what a great trajectory. You’ve really seen it all, which must be so helpful with the companies you work for. So tell us a little bit more about NuMundo like and why you’re focusing on Latin America and your investment philosophy and those kind of things. It sounds super interesting.

Ivan Montoya 02:53
Yeah. You know, there’s a lot of discussion with founders around this idea of founder market fit, right? And you know, why is it that you are best positioned to build a company? And I feel what I’m doing, you know, I’m essentially a founder, right? This is a I’m not spinning out of some big group. I don’t have a huge fund to begin with. This is a startup, right? And so for me, first I’ll talk about the opportunity. There has been multiple generations of startups in Latin America. I would argue that Latin America just to make this relevant for the folks here in the US. To me, it’s like Silicon Valley of the 1970s right? So, you know, there was a generation before in the US, let’s say in the VC world, there was, like the, you know, the early semiconductor companies, Fairchild Semiconductor and so on. They have exits, then they form the next set of companies. And by the time you get to the late 70s, you’ve got Steve Jobs, you’ve got Bill Gates, you’ve got all these folks, but it’s still a very small community, right? You could probably put all of those founders in a bunch of restaurants in downtown Palo Alto, all the VCs, and pretty much have that community. And that’s where Latin America is. So a generation ago, you had the first big winner, which is a company called Mercado Libre. Today, that company, it’s like the Amazon of LATAM. They’re worth over 100 billion in market cap. Also deep connections to Silicon Valley. The founders were from the class of ‘99 at Stanford. And then 10 years later, you had the next big one, which was Nubank. Another connection to Stanford, a bank in Brazil. They’re worth, I don’t know, 50 or $60 billion. Sequoia was an investor. But those are kind of those. Those folks were the true pioneers. Now we’re in this wave where you have almost a third generation of people who actually worked at tech startups, right? Whereas, you know, maybe in the previous generations roles like product manager, Product Marketing, nobody had ever done them. And now. We have a crew of founders who’ve had a chance to learn either by working there or by seeing other people be successful. And so I think there’s a big, big opportunity from a talent perspective, it’s under capitalized, like it is very hard for founders to raise capital in LATAM and so I think from a pure investing perspective, that creates opportunities a little bit less competition. And then third, I think there’s an opportunity to build something unique right where what I’ve started, but hopefully what we’ll build at NuMundo Ventures, is a very differentiated offering for founders, where we provide almost what I would call Series A, Series B level support and mentorship for a founder at pre-seed and seed. And we’ll get into that, I’m sure, in a little bit, but that’s the basic story.

Kate 05:52
I love it. What an exciting time to be there, right? You must feel like you’re really helping them build something where that’s pretty neat. Are there certain verticals that you focus on?

Ivan Montoya 06:04
So, to date, I’ve invested a lot in FinTech. It’s not necessarily because that’s all I’m interested in, but I do think there is a lot of opportunity. Like, when you think of, you know, there’s a bunch of different ways you can measure this, but if you look at on a comparable basis to the US, like if, if credit, whether it’s mortgage lending, let’s say, on the consumer side, or whether it’s B2B lending, there should be, like, a trillion dollars more worth of of credit available in Latin America than there is today. And so just the act of being able to get a loan, to buy a car, getting able to get, you know, credit, consumer credit, right? You go to the grocery store, you got 20 bucks in your pocket, but you need to buy 25 and you don’t have revolving credit, right? So it just turns out that there’s tons of startups that are trying to solve that problem, and so I’ve done a lot in FinTech over the last couple of years, more in AI. Today, I think yesterday, one of the companies I backed just came out of stealth to do AI for recruiting. I backed a company that does AI for small to medium businesses, both in LATAM and the US. So AI is definitely becoming a bigger thing. And then some in PropTech, construction tech, because you know that those industries are massive in LATAM and basically all pen and paper.

Kate 07:25
Okay, are there certain areas, cities that you find more of hubs of startup innovation in the region?

Ivan Montoya 07:35
Yeah, for sure. The number one, you know, there’s basically two parts of Latin America: there’s Brazil, and then Spanish speaking LATMA. Brazil is probably five years ahead of everybody. So Sao Paulo, and just in general, Brazil is massive. It’s a country, for those people who aren’t as familiar, I think it’s 300 million people plus. You know, it’s basically orders of magnitude, like the US, right? So you can have companies that just focus on Brazil that become massive. And then in Spanish speaking Latin for sure, Mexico City is the hub. But there you’ve got kind of more stuff distributed, right? You got in Colombia, Bogota and Argentina, a lot of activity going on in Buenos Aires. You even have smaller places like Uruguay, which is sort of like the Israel of LATAM. Yeah, we’re a very dense grouping of founders, but smaller markets.

Kate 08:32
So interesting. Yeah, I’ve always wondered about that market, because it’s huge, right, and lumped together. So you’ve always, I’ve always wondered about the different facets. You must be seeing such exciting ideas coming out of those places then.

Ivan Montoya 08:46
Yeah, I mean, it’s, you know, I’m sure we’ll get into more stories about the companies I back but I’ll wait to share.

Kate 08:54
Okay, well, let’s talk about this. Because you said something when I met you, and you said it earlier in this conversation that you work with these pre-seed and seed investors like, you know, a Series A investor, right? You’re very close to your founders. That’s so unusual, right in the United States, and so many founders at the pre-seed and seed level really could use the help, right? So walk us through that, because that really struck a chord with me. I just, I love that.

Ivan Montoya 09:23
Yeah, you know. So I’ll talk about me as a founder first, or NuMundo Ventures as a startup, right? And how that relates. So, yeah, I think it’s been said that there are many ways to get to heaven. So you could be a passive investor, you could be an active investor, you can be something in between. So I’m not saying the approach I’m doing is right or better, necessarily, and it definitely has trade offs, right. But if I compete just like everybody else, then why would a founder choose me? Right? If I’m like, Hey, here’s a couple 100k, 300k, 200k whatever, maybe in the future, here’s a million bucks. I’ll talk to you in six months, or talk to you once every three months, then, I’m just like everybody else. So that’s number one. Number two, I think you know, and this is specific to Latin America, but there’s probably parallels here in the US, which is in Latin America, traditionally, you had these very wealthy families who, you know, maybe 50-60 years ago, or 100 years ago, started some company. Could be the beer company, the Coca Cola bottler, the cement company. So traditional industrial, right? Go back to the US 100 years ago. It’s the, you know, the people who made the trains, oil companies, and so they’re at the top of the food chain, so to speak. And so, because there was no VC industry when they go raise capital, it was basically from these families, and they’ve been super successful. But the way they’ve been successful is essentially having control over any investment that they invest in, right? Which is very different than the culture of, Hey, I’m starting a tech startup, and I’m giving away a percentage ownership and usually a minority position, and I don’t want your control. Like I’m building an AI startup. What do you know about AI? Right? And so as a result, there’s a history in Latin America, founders essentially either getting bad advice that’s antagonistic to their kind of ultimate objectives, or people just don’t know what they’re talking about for these types of startups, or no access at all. Right? And so for me, just literally answering a WhatsApp message quickly is differentiating. And then if I, you know where I pick and choose my battles, because There’s only 24 hours in the day, but if I think that there is a founder who’s got huge potential, there’s early signals of product market fit, then I’m all over it, right? And so that’s sort of my challenge is how to prioritize my time, but giving founders the option for that type of investor on their cap table. And I don’t play that for every founder, right? Because sometimes they already have somebody like me on their cap table, but, but that’s an option, right?

Kate 12:14
That’s gotta be so helpful, you know? I mean, I just think that’s such a tough stage for startups just been doing this show for so long. And what ways do you find yourself helping them like you see common themes?

Ivan Montoya 12:28
Yeah, so it varies, but I’ll just start with the basics, right? So I help a lot of founders, helping them raise capital. And not just Hey, let me introduce you to somebody who I think you might be interested. Although that’s super valuable, I spend a lot of time helping them with their pitch. What’s the story? The actual pitch deck? My wife jokes that I’ve been helping people with their homework for, you know, 40 years. and so, so and I will help founders that I have not backed. And oftentimes this is a way for me to get to know founders in a very natural, collaborative setting before I invest, and it helps me build conviction. My guess is I’ve done that out of the 15 companies we’ve backed in the fund to date, at least half of them. That’s what we did. (That’s great.) So it’s this great, organic way to get to know the founder, and at the end of it, whether you invest or not, hopefully they’re in a better place, right? And I’ve learned a ton, and I’ve built goodwill, and then, in many cases, we continue on the relationship. And then especially post the relationship. I’m all over that, right? So, for example, a founder, his name is Nico Rojas. The company is called Dapta, he’s a Colombian founder, using AI to help small medium businesses, essentially use AI. I knew him for over a year and a half. Eventually got conviction, invested, and then starting in February of this year, started helping him getting ready for the seed fundraise. So we did the whole pitch deck. He’s based in Phoenix. Flew down to Phoenix. We did the whole thing in one day. The very next week, he comes to my house, we go and record a video. We publish that video the very next week, when he starts his formal fundraise. And in about a month he raised $4 million all from US investors. And so, you know, anyway, so that’s post-invest, right. That’s one example.

Kate 14:20
What a partner you are. That’s a great example. I mean, they must realize that’s unusual, I’m guessing.

Ivan Montoya 14:29
So that’s one thing. The second thing I would say is, sometimes, you know the founder, it’s like the black magic of finding product market fits. Sometimes they find it quickly, right? And now the relationship changes, and that becomes more of sometimes therapist, sounding board, more of a board member type of role, right? So I invested in a company about a year and a half ago, almost two years ago, I met Pedro. Company called Cashea. Cashea is one of the most incredible companies I’ve ever met, and they do buy now, pay later in Venezuela. So the backstory, because people hear a lot about Venezuela in the news, and it’s a little lot of stuff going on there, but essentially, they started experiencing hyperinflation about 10 years ago, let’s say. And they have laws like anti usury laws, where credit cards can only charge a certain interest rate. They can’t go above it. And so at some point, the inflation rate exceeded that, that max interest rate on credit cards. So overnight, 10 million credit cards go to zero credit limit. So there’s no consumer credit in Venezuela. This is a country with almost 30 million people, and the banks also couldn’t lend because the government was trying to reduce inflation, so they put capital controls. So this company launches a buy now, pay later, product where they don’t charge interest at all to the consumers and the merchants pay them a percentage of the transaction. (Oh, smart.) And so they go live. There’s a company in the US called The Firm which does this here. There’s one in Europe called Klarna. I think it’s about to go public. And so anyway, so this company, Cashea, launches in October of 2022 and at the end of July 2025 they’re at $150 million revenue run rate. They’ve only raised 2 million in equity ever. They’re incredibly profitable. And it’s just like, you know, it’s like, these founders are, like, these surfers who caught the biggest wave of all time, right? And so when you go through that type of growth, number one, you’re like, there is scary stuff, right? Like, your servers are melting down. How do your credit models work? We gotta hire people. You hired somebody two years ago when it was a startup, and now there’s 100 million in revenue underneath you. Is that person in the right place? Can they actually do that right? I mean, everything that could break breaks right with that level of growth. And that’s a quite a it’s an awesome problem to have, but as a founder, you’re pretty lonely. Right? And so with Pedro, I have been at points therapist and at other points, like last week, Pedro and their CFO Arnoldo spent a few days in my house while they were visiting investors at Sand Hill Road. I live 10 minutes away from Sand Hill. And some of like the absolute top investors in the world were meeting with Cashea, right? And so the other piece that I do for a company like that is just spread the word. You know, yesterday they were on a podcast called FinTech Leaders, which the host of FinTech Leaders stayed at my house as well. Miguel Armaza, so a lot of it is just building this network to make these companies way more visible in the valley, so that they again, it connects to the fundamental thing that I do, which is help them raise capital here.

Kate 17:53
Gosh, what an incredible story. And the fact that you’re right, that is a great problem to have, but it can be very stressful. And then the network that you’re building for these founders down there is incredible. The word must be out about you. I’m guessing. (Oh, we’ll see.) I’m guessing people are clamoring to work with you. I love your approach. It’s so different. Can you share another example that you’re excited about right now from your portfolio?

Ivan Montoya 18:24
Yeah, and I’ll come back to the other way in which we help but another company. Well, I’ll finish with that, just because it’s super quick. The other one is go-to -market. So part of my network includes people who are way smarter and better than me in a bunch of different things, but one of them is go-to-market. And so if we have a founder, where they come from more of a product background, or, most importantly, if they are starting to see some early traction, where that seems like there’s product-market fit or some early signal. Then oftentimes I’ll bring in what would be a venture partner at another firm, but these are just people who really like the fact that I have these close relationships to founders. And they’re like, Hey, whenever you need help, let me know. (Right.) So you know, in the case of Dapta, for example, we worked with them and with this, this venture partner on the fund to basically launch their website in the US, right? He launched it in Colombia. He’d gotten all this growth in the US organically, like word of mouth, but hadn’t done formal go-to-market. So we did, you know, I don’t want to take the credit. It’s mostly this guy, Diego, who worked with Nico and the team, but we’ve done that for Dapta. We’ve done that for a company in Monterey called Bill Pure. We’re about to do this with another company, so oftentimes we’ll work with, especially if they’re doing something in the US, we’ll help them kind of really improve their messaging and accelerate their go to market strategy.

Kate 19:53
I can see where you’d be a real asset with that, because, you know, there are some differences, I’m sure, when going to market in the United States.

Ivan Montoya 20:00
Yeah, yeah. Very different. Last thing, I would say, just in terms of another company. So another part of my thesis is, if, again, on the VC side, there’s, I think, especially nowadays, you could say there’s always been this concept of, you know, are you betting on a consensus idea or non consensus. And the theory is, if you do non-consensus and right, those are the best returns, right? Because if it’s non consensus, probably the price is a little bit lower, or whatever. If it’s consensus, well, maybe the price gets bid up and either, you know, if it’s a huge home run, you make money either way, but if it’s so so you know, it’s just, you’re not going to get great returns. And so I do spend a lot of time trying to see, is there something that I’m seeing, or is part of my due diligence process, am I able to see something other people don’t see? And come in very early with a founder who’s building something incredible, but is non consensus. And probably the best example of this to date is a company called OneCarNow or OCN. So when I met Mairon he was 20 years old, hadn’t gone to college, and his idea was essentially, without getting too into the weeds, is providing car loans to the top drivers of the gig platforms of Uber and Didi in Latin America, because it turns out that 90% of the drivers of these platforms in Mexico at least, don’t own their car, and they have no access to credit. Going back to this credit issue. So it’s something that I was very familiar with. I remember in the first 10 minutes of meeting Mairon, I’m like, something’s different about this person. There’s no way he’s 20. There’s just no way. And so I made him an offer because I was like, wow, this is pre-launch, but I knew something was different. I said, Hey, Mairon, if you’re willing to work with me, meet with me every Friday for the next three months. We’ll work on your pitch deck this is for the pre-seed. Like he had no money, but that gave me a chance to work with him. And by the time I was done, I’m like, I think I found the Mexican Bill Gates. And so he has gone from launching in March of 2022 to closing Q2 of this year, so three years later, to 30 million in revenue. He’s raised over 100 million in capital total. He’s never gone to college. We came out of the board meeting a couple weeks ago, and I’m just pinching myself. I mean, this guy’s unbelievable, right? So a big part of my thesis is being a really, really good talent scout, right? And trying to find these people early, right? And in the long run, if my Mairon is very successful, then obviously, you know, and I’ve been with him since negative one in his journey. Then obviously, hopefully, he refers me more founders. They see that I can work with people who are both 20 as well as people are 40, that helps NuMundo in the long run.

Kate 23:04
Absolutely. Because that resonated with me, because a lot of the VCs that come on the show, they talk a lot about it comes down to the founder more than the idea, a lot of times.

Ivan Montoya 23:16
Yeah, and so I’m a little contrarian there. I would say they’re both super important. And I think there’s a little bit of show when people say it’s all about the founder. I mean, there’s no doubt the founder matters, right? But you know, somebody, I didn’t create this analogy, but I love it. The analogy is a surfer, right? Okay, so think about somebody surfing. What do you need to have a really good surfing experience? Well, you definitely need a good surfer, so that’s the founder. Are they skilled? Is there a good fit for what they’re doing? Then you need a surfboard, which, in theory, is, is there some sort of competitive advantage, or is there something that they’re doing that’s unique, right? It’ll vary a lot, but you can’t start with – rarely can you start with nothing. So there’s something there, there’s something. But you need that wave. You need a problem that they’re solving, or you need something going on in the market. If there’s if it’s flat, I don’t care. And I can tell you 1000s of stories. There’s a lot of survivorship bias in this industry, where you hear these incredible stories, whatever, but you don’t hear about these incredible founders who had everything, right and crickets. This is very hard. It’s not just about the founder. You definitely need a wave. If you don’t have that wave, it doesn’t matter how good a surfer you are.

Kate 24:37
That’s a great way of breaking it down. You know, you all the components are important. Yes, yes. We’re actually coming up on time, which I cannot believe. We always wrap up the show you shared so much, but any just general parting advice? Startup founders listening early stage that are struggling. You’re probably going to get hit up a lot after this show.

Ivan Montoya 25:03
Yeah. Somebody once said that when we go back a couple years, and we’re starting to see this in AI, so it’s hard to tell what’s noise and what’s really right. But there have been different periods of time where founding a company has been romanticized, and it still is, for sure, in the Valley, right? But there’s a difference between saying, hey, you know especially, yeah, you’re gonna go hike a nice little mountain, right? So living here in the Bay Area, I know you’re from Marin, it’s one thing to say, I’m gonna go hike Mount Tam, like that sounds like fun, and a lot of us can go do that. But to me, starting a startup is like hiking, climbing, Mount Everest right. So you know, when you think about that, it’s like, Okay, get ready. It’s not Mount Tam. It’s Mount Everest, right? You know, do you have the right equipment? Do you have the conviction to pull you through when shits gonna happen, right? And then in my case, you know, I view my role as a Sherpa, and it’s usually the Sherpa taking them from the bottom to maybe base camp or the very first thing. And then at some point, other people are going to come on and can provide them better help than I can, right? And it’s hard, right? And so don’t be, you know, on the one hand, don’t be, you got to be careful not be caught up in the FOMO. Like, why is everybody else successful? Like, No, trust me, you know, it’s hard for everybody, right? And, and that just be, you know, go for it, but be objective, right? Be brutally honest, right? And, you know, it takes a little bit of luck. There’s no doubt about it. It takes a little bit of fortune. But, you know, just make sure you want it badly. It’s not climbing Mount Tam. It’s climbing Mount Everest, right? And if you want it, go for it.

Kate 26:51
I love it. Two things really stood out to me in this conversation. You have a very realist approach to what it’s really like. A lot of VCs, you’re right, come on and they just pontificate with the sayings and everything. You have a great like, you get it, and you really broke it down for the audience. And then it was so interesting to hear how you work with these founders. It’s just such a unique approach. It really says a lot about you. So thank you for sharing all that. (I love what I do, right?) It’s obvious.

Ivan Montoya 27:17
I love what I do. So this is great. It’s hard work, but it’s very meaningful. And I think the founders, hopefully that I support and in some small way, do some amazing things, right?

Kate 27:28
They will. I can tell that right now, you are a true partner. Where can we go to hear more about your fund?

Ivan Montoya 27:42
Yeah. So one is to look me up on LinkedIn. I produce a lot of content. The second is NuMundo Ventures.com so that’s our website, and the media sections got a lot of content, these interviews with founders, and I’m on a lot of podcasts. And so yeah, those are probably the two simplest ways.

Kate 28:01
Thank you so much for being here. I found it fascinating. I can’t wait to continue to watch these companies. I appreciate your time.

Ivan Montoya 28:02
Well, I appreciate you, Kate. Thank you for the opportunity. Thank you.

Outro 28:12
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