Carlos Ochoa, Founder and Managing Partner at Alpha Impact 8 Ventures explains what it means to expand to the South Americas, who should do it and when is it applicable. We also talked about moving to the silicon valley and specifically - when is it safe enough (in the economic sense) to move to the valley to run your company.
And today as a guest speaker, we have Carlos founder and managing partner at alpha impact, eight Ventures.
And these will mainly talk about immigrant founders, how they can start their companies in the Silicon Valley specifically, or just in the United States on what they need to have to prepare for this move.
Because Carla started from in Mexico and then move to. Yes.
So, we'll talk about that Carlos a less he called by you giving us some background on yourself and on alpha impact eight Ventures ally memory. Thank you. Conferencing. I took great pleasure to be in this podcast.
Always happy to help. So, first, I'm really from Mexico City raised in Mexico City, and I divide my career into parts. The first part is entrepreneur. I building technology companies.
Mainly I started when I was nineteen. I started my first company when I was nineteen and finished nearly twenty fourteen, when they have a couple of fixes.
And that's the first part my entrepreneurial side part. The second part is a better a professional investor, because I,
I might be angel investor before,
but I started in twenty fifteen making early stage startup investment and the thing that moment until now,
I've been polishing that thesis to generate bigger returns and more value for our companies also seeing the pieces to align it with me as well.
So I loved the underdog stories and I am a huge proponent of diversity and of improving human lives with technology.
So the evolution of my best investor as a main metro carrier,
it's getting that idea more aligned with where my personal and then that's where we got into what it's right now,
if I impacted Ventures, I think it impacted.
The interest is a venture capital investment. The company you can say it's an impacting business. Definitely. We're looking for for impact and we're building the financial infrastructure in the US.
Mainly for the research. When I say you underserved in the US. It turns out that. It's a very small part of our population. But when I say on the reserve in emerging markets, it's almost April one.
And the, we invest in fintech, started with the social purpose that is there are led by minorities or women for girls. Diversity is very important.
And that's kind of like the buy from the company and I, myself, got it. So, before we move onto the actual part of the episode, to the part that's full of great advice.
And so on is the fourth I actual one to start with one of your favorite underdog stores because I
personally love those. So, can you tell us your favorite thunder dog store maybe can be actually about you?
Well, you know, like, I'm from a very humble background. The Mexico City, kind of a bad neighborhood in Mexico City.
You actually, you look up my neighborhood and even the street where I grew up, you will find that it is only make it on yours when they killed a cop or something like that or something that, that.
So, I believe that for me, something very interesting. Is that I felt like another goal of my life manager, because I was in grade schools with great class. Me for most.
Probably, I was like, the list privilege guy in almost every cloud that I took. So, that actually kind of change that I've been looking at things and and it.
I tried very hard when I was in college and I believe that I did some good things over there to be part of the clock to understand what was the club of the rich kids.
And how do you get into the business Clover, their families and things like that. And and that actually helped me scale. The sales of my company just understanding how you need to present that.
And and and and just be part of or be accepted into into those.
But, definitely my favorite sorry issues the story, which is the founder of one of our company articles, financial intelligence.
So it is you, he started this company mainly, because it's a bill payment company for, you're able to to pay bills all around the world originating.
That payment from either the US or or or domestic or somewhere else. And so,
the interesting story is like,
when humid grid us,
eight years old,
he was from Dominican Republic,
or he started working very,
very early life to start sending money remittance just to see family in Dominican Republic.
It turns out that they never paid the rain for the services water, electricity, things like that, or Internet or even the phone. So they were not able to speak with them.
So he created this company to solve exactly the problem.
But you can be anywhere in the world, and you're able to pay the bill from anywhere else in the world writing. So, the remittances doesn't need to be your day to be.
You'd like cash that you will go to, which are new and take that out. But also, you can pay for the services that your family, or whoever you are saying, this money you are enjoying and for those services as well. So you're able to communicate them.
And now he's has a great company. He went through Wharton through Goldman Sachs. Now, he's a founder and his company's words, a hundred mail. So that's my February under the old favorite hundred bookstore reaction.
That's a pretty good story. So here, we now that we've learned about one hundred dogs, let's move on to actually talk about the major topic of these specific opposite, which is immigrant founders.
Roughly twenty percent of my listeners are not based in the United States. And one of the questions is, what do I do, when do I move to the United States that's probably the question that we want to I want to start with when shoot an immigrant.
When should an outsider how the U. S, move to the US at which point of their company.
So, if you're talking about the company, I believe that you're able to move into Silicon Valley specifically when you reach the golden standard. So slack famously scaled.
At five percent weekly growth and so it's kind of like the sign them for everything.
And if you have those numbers, definitely, you should move to Silicon Valley, because you will receive all the attention all the money, and everything that you need to actually create a unicorn. I believe right. That's kind of like, don't come to Silicon Valley.
If your company is still in a stage, where you don't have a real product to show for, because those will be closed mainly because of the stage that you're at. Most of the of the funds here in Silicon Valley.
They go for. She we say, so, that means that you will be racing around ten male, something like that. And we'll have a ready achieve a little bit of product market team.
So you already have clients you're scaling. And if you're coming here is to kill that scaled worldwide or into the US, but very, very fast, the money that you will receive here.
Those necessarily doesn't need to go to kind of fix some of the things on board. Your client always that onboarding will turn into ten extra revenue or something like that.
So if you have a company that is doing well, abroad, just stay abroad don't come to Silicon Valley and don't come to the US.
If you wanna call me, because you have a world domination play company, and you need a lot a lot of money and probably that's okay but the velocity and acceleration that you have, or that you need.
That's something they didn't need to take into account. And did you need a lot of money to show the rate but you already know that that's gonna happen and you have the metrics to show for that. Then come here.
Not before great, perfect definition and a lot of my speakers who have gone through the integration.
So that, you know, if you have some real validation of the fact that, you know, American specifically want to have your company in America, like, you know, the good signal can be the term sheet from investor basket.
The best one is, you know, when you get into some sort of a program, like, I know if you get into Weiss, he definitely definitely.
You have to write the, or, you know, the other one that I really like, give me a sexual later. That's why I only recommend to accelerator.
So let's say accelerator is less fun and it's alchemy it's or Y, Combinator the work that they do with a company.
I, I really, I really believe that that will actually accelerate what you are doing and they will tell you kind of not only understand what market you're looking for, but to exactly. Get into that part.
So it's a lot of.
Right, right that's true. But and by the way, I'll make sure to leave the link to that second exterior that you mentioned. Because I think there is no need to leave a link into this group.
This episode two Y, Combinator, because pretty much, I believe pretty much anyone in this field should know that but anyways, let's move on to the next topic and speak specifically about fundraising in Silicon Valley specifically for the immigrants.
How should they story? How should they started grosses? A lot of immigrants, when they just move in, there might be they might have some traction, but they have no network. How should they approach this then? So that, you know, like Silicon Valley.
It's very interesting. It's a, it's kind of a very interesting club.
Like, the investors is a very interesting club because what you need to do is kind of, like, start, like, building that since the beginning before just, just moving here and and not even moving here.
But, if you're traveling, even don't come from for one week, come for five weeks or sixty, mainly because it's not about a beat or getting in front of the better, it's about building a relationship with them.
Because you are the expert in your company, you're the expert in your market, or you should be the experts in your marketplace, right?
So, you need to actually they find your life and educate your investor because your investor, if you're coming, let's say from Ukraine, right?
Or from Turkey, or, from Mexico, they based on the other side data and understand, how is the market over there? What are kind of like the business fabric that you have over there?
And how would you be able to scale, or what does it mean that you actually close one client? Or do you have a hundred thousand users for example? So you need to bind your life and educate on so that it will take some time.
So phone for six weeks, five to six weeks, have a lot of meetings.
Not only the beach, but coffee is affordable for advice and it's kind of let's go. I have beers and I would love to get your advice.
So most of the good in thirty days is something that it's kind of interesting, but they're not ready to jump in and we'll say, okay, let's kind of give you more information. I can give you some advice a little bit more.
Yeah, let's go and have some beers things like that and and kind of socialize idea before trying to go and and trying to come and raise some money. That's the first.
The second thing is that you need to learn kind of the host in front of you, why should I invest in your company? Because it makes sense with me portfolio because it makes sense for me. And my, and how old is my fun?
Does it makes sense with the return that I'm willing to give to the investors?
Because I receive a lot of decks and peaches and requests for for a meeting because they want to be, but they don't understand that. It's not only about the money.
It's it's about, like, the whole ecosystem that you're building and the whole portfolio that you already have, and how you're able to count and how you're able to synergize every company in your portfolio.
Every relationship that you make, and every relationship that that portfolio is bring also to the table. So you need to do the homework first.
Do that start social and then after the first, let's say three trips or six weeks,
then probably you're ready to start coming and and fundraise one that you're already kind of covered that they already know you,
they already understand what you're trying to do. And,
if you know someone that is connected to this ecosystem start there definitely like, there's nothing as powerful as a referral or success if you're super successful, come here.
Right? And people will follow on taxes. But if you're not, and you're trying to become super successful Jose to start with referrals people, that shouldn't know you and understand what you're doing to do a referral for someone.
You're not for fundraising, but just like, hey, you should meet the founder. He's a great guy. I believe they're onto something, but they're just getting trickle telling me understand what they're doing and see if there's something for you.
and then in that call,
just asked for a box,
and then follow one on one of wanting better life advisor,
something like just hire and the product that they send that you have a call with him or her.
It's like, I already have the detail this and this and that or something like that, because they understand that you're serious and you're moving forward.
So, do you need to do all that before? Actually try to come for a real pitch. It's kind of socializing the idea that it will take some time. I believe that it takes, like, eight, eight months, one year to actually kind of build and work.
And then come the cold calling thing, or yeah,
I receive a lot of founders and let's say American founders and I said,
you should come and see me,
but that new Friday one that your whole week is here you're here here the whole week, so on Friday,
I will explain what went wrong and they say, yeah,
I got a meeting with unwritten quarter, which,
and what did they say,
come later or keep me posted,
That's kind of like the the polite way of saying, you know, I'm not interested. Right? And wrong is that, of course, they com, kind of a cold call.
They took the meeting because probably have the space, or they have a kind of more material, but they will say that every time because they don't they don't know the founder.
You know, like, when I'm investing in one company, it's like, I'm putting my money. Right I see it and the money on my founders into a team. Right? So I need to know these team.
It will be very hard, like, oh, I don't know, you I don't understand what are your values? I don't know. Understand, where do you come from or what is what are your passions or or why are you doing this and just embedded?
It's about trust and of course, the market technology, but I'm assuming that you already have that I think you're willing to come right but it's about building that trust and great.
It definitely needs to be like, technology into something that is technology related.
So, you're able to scale if it's not technology related and you're not able to scale five percent of grow to a weekly then users and probably come.
Absolutely good point. And here I want to personal note here, in terms of referrals. A lot of cases where people from the same country, where you just move from.
A lot of them are here in the United States, and you can just find those chats of people from the same country as you are, asked them, you know, hey, plus meet for beer or for coffee.
you can grab some,
useful referrals that can really do something other something really helpful but anyways,
let's move on and talk about policy you and specifically alpha impact eight Ventures.
First of all why is it called? Alpha impact interest? I'm just curious. Now. You know, like the name that I set it up on what?
Your lingo bankers that it's originally mean for the from Mexico City but of course, no one got it and we changed the name to something that was still doing something like that.
Because I really believe that impact investing it, it, it needs to to create a world right?
And to create wealth for all the participants that's kind of like my definition of fame you're creating wealth for everyone. And sometimes, of course, the sustainability and environmental. Well, but it make a social impact so we're creating wealth for all the parties.
So our, because we're creating alpha definitely impact because.
Were an impact investing fund and it's very interesting because in Spanish or it's eight eight right?
So, the eight it's over there, and also eight, it's a kind of the basis for all the computing that we have, and something that I was very impressed when I was young.
And I was starting at college, a computer science and telecommunications. I was very impressed that you're only need to sample the boys. kilohertz.
And then the brain we'll do the rest. So, Julie need to have, like, different pieces, just like little pieces of your voice.
And if you actually listen to that, like very lowly, it sounds like a robot it's kind of you're not able to understand that but the brain is powerful enough kind of figure it out and you're listening just as a real conversation. Right?
And that's a kilohertz. So, I believe that the eight represent that case, a perfect example of how technology and the human brain, and work together and do something amazing, like, have cell phones right and communications around the world.
So, the eighty's, the technology part, and, of course, made last.
Got it perfect. Alright. Now understood. So, let's talk about with you. Investing.
So what does alpha impact Ventures invest in in terms of the stage and the fields so we were Kevin fintech with social impact. That's what we're looking for.
Something that it's building infrastructure,
financial infrastructure for you under served mainly the Americas not from Canada to the public on here and that's a different definitions by country,
but definitely we're working on that right now,
with our company to help operations in country in America.
So that's very good for us and that's one of the things that we were looking for, and we're able to help with that and just take that we're looking for it's kind of Pre or services.
So you're very close to see me say,
or Gerald writing to say,
I don't like the large hearsay I prefer small C receipts of your own thinking about racing mostly we say,
but because you already have pro market feet and you're scaling it's kind of a very good fit for us,
or if you're in precis,
we say you already have your seat drowned on your and you'll re,
raise a couple of million then come to us and we can help you,
scale to the next day.
That is definitely she would say, because one of our things is Google video, a little bit of money, but we will work with you a lot the first twenty months.
Because of my goal is kind of like, have at least fifty percent of appreciation your, in your evaluation in the next twelve months. And that's my goal.
So I will need to work with you and couch it scale that faster enable to achieve that goal. And then be ready for and I have a very nice everything guy understood now. So.
Oh, let's talk a little more about this, you know, cross border and us and Nadia based companies.
How many companies in the United States have you seen trying to expand actually, to countries like Mexico or Canada or other nearby countries?
So, what I believe, it's the companies, they don't come naturally and and say, oh, I should do these in Mexico in Canada, or Brazil, right? Because they don't know the market. The only ones that are able to do that.
They are the ones that, but actually understand the market, but then what we find some of the companies will find a better product market fit in different markets, mainly because the competition is not great over there.
We're actually there's no one doing that. Right? Because in the emerging market, you have those opportunities, and also the incumbents are so far away from technology that.
They won't be able to actually, like, catch up with, with our products that they're built. So we have seen that most of the company. Definitely. They would like to expand the market, but not all of the companies already to actually do what it's, what it's needed that.
It's kind of check the product open a real office over there and make that happen. So that way there, we actually do it if we see that that's something feasible for the companies we kind of do a tour with them in different markets. Right?
I will be here definitely which with everything remote. So we, we've talked to different potential clients in the region and understanding if there's a real product market fit, or what we will need to do to actually do that and accelerate sale.
So, if some of the, the potential clients actually say, yeah, this sounds great or yeah, I will need a little bit of a tweak and they can jump in. Then we can jump in.
There's a very interesting a statistic that it's the US companies, they receiving leverage only the US companies are not technology company. Right?
They receive only a bump in that into one or three percent in the revenue from a brand that technology company.
It's, it's kind of like the other way around and one example is Netflix, for example, right or Apple but if you're a technology company, definitely you are able to scale.
Outside of the US Jersey we'll need to understand where is the best place to do it and and how to do it if you haven't been to that market. Definitely. You will need a Sherpa, right?
It is like, trying to get into to the top of the efforts, the military by someone that understand where is the social and business fabric of that market and guide you to the Congress to God.
And how many companies have you seen? Actually succeed you know,
I've seen okay I haven't seen those personally, to be honest,
but I've heard stories about,
companies trying to expand specifically to Mexico is just literally,
across the board maybe six hour drive specifically from Silicon Valley, or Los Angeles because it's just so close,
it's a new market.
What's tried you see many of those and to if you have,
how many have succeeded,
let me tell you like the contingent with article story article that bill payment company,
and now wanting to build payment transactions in Mexico the eight passed through there.
So, there, the second largest, the plumbing company, Mexico now, and they, it's a New York based company. So that's one example the other one is Eric. Tim, it's a kind of San Francisco born and raised.
Company, but now their headquarters are in Mexico City, and they actually, the larger markets that they serve are in South America, Argentina, Venezuela, Mexico, and in the US.
So there are different companies that are able to do it, but definitely that share putting, it's needed.
You need a partner to actually help you do that we understand exactly how to to tap into those markets to scale and then you have other other companies like,
I've been speaking recently,
because now that we're all inside it's easier to get into different calls with different companies into the combine sign ups,
To try to say like an app that they're looking into watching America how to do it.
And some of them are already there, and of course they're signing, but they will need kind of a lot of money to, to go through the process unless they hire someone that understand the fabrics and and like the right partnership. So, what I believe is that.
Some of them definitely will be successful. Right? I believe the China will be successful for me and I believe that they need to to to.
Actually, now they're doing the right stuff, like hiring someone that understand the market and and help them guide over there.
Because one of the mistakes that they used to me was hiring someone from the US and give them just that assignment go on to open a different market right?
When, you know, that people that they hire, probably never made business somewhere else outside of that us. Right?
So you need someone that can help guide you over there and they're doing amazing things, you know, like, I will tell you something over for example, their largest markets are so powerful and Mexico City.
Over like the current data car sharing seriously. Oh, nice. I never thought that.
And, you know, like those, like Mexico City and Mexico City over twenty million people that the average income they all turned, you know, like twenty million people that live over there.
They all turn the average income in the US, right?
So you have a very nice place to try out things. Of course, it's a little bit different, you know, culturally business wise, etcetera.
But did you thing that you have something that that it's for, let's say, a large population from that you can test it out over there. It will be cheaper. Definitely. You will.
Of course, is not that straightforward, but you will be able to test it out.
And, and understand what kind of income that you need, and if you're able to get into of the twenty million people, how many of them are able to buy some things and you will have like, real world metrics that half the price.
The same thing with help out.
That's actually no keep going. So, definitely. And someone that it's very keen to actually do that are the agent company like the real competition in Mexico for Rover.
Of course, is the return finish company. But it's already in Mexico and in Latin America, because they don't understand how to serve emerging markets.
Right so location companies that they were born in China, right? Or India, they already burden the emerging market. So they will try to move to the next emerging market to make it happen.
So they're not only investing heavily into doing their business. It's over there.
But also they're investing into acquiring company and create an ecosystem that they can right? In those sequences.
Right that's super interesting. I never thought I had such a presence in Mexico. That's really cool. But we're moving onto a last question of today's app is, which is a call to action.
So what's the one thing you want the listener to do? As soon as the episode is over? I will give you two calls. I took one it's just getting to and Carlos.
There is a kind of a, there's a video that it's a tips for exponential growth this will cover most of the things up right now about right now and everything it should go. And make a sales call.
Definitely get a different client. A new client for your company that will make you feel good and inspire than the.
And get your company into the mix. Perfect cool. Perfect.
And I'll make sure to leave all those links mentioning the episode description of this episodes and my personal call to action, you might be not surprised by that, because it's the same over the past.
I know thirty episodes so Michael go to this group and if it's up so I'll leave the links mentioned in the episode and also I leave a link where you can fill out an application, like two or three, three questions there.
And I'll either connect you to one of the mentoring mentors in my network, most of whom are by the way speakers on fundraising, or actually direct you to the investor.
So, take your time, fill out the applications and take a look at the links the description. It says is usually have a good day.