20VC: Marcelo Claure & Shu Nyatta on Lessons from Investing $7.5BN at Softbank & Why Dumb Money has Gone, Why "LATAM is Under Construction" and the Next 10 Years Will Be the Best & Investing Lessons from Missing Nubank & OpenAI & Investing in FTX

22:57And if you ignore everything else, those are huge markets. That's more than half of the population of 650 that Brazil mentioned and most of the purchasing power. And to very well run central banks, the currencies of Brazil and Mexico have been some of the best performing currencies in the world because the central banks hiked early, Brazil is already on the face of easing interest rates. These are two really interesting economies with tailwinds. And then you have as a plus some of the other markets. Some will always be challenging. Argentina has perpetually been a challenging market. It's never gotten currency under control.

23:25It's very difficult to figure out what the value of your peso is over time. Colombia is having a challenge now, but we're long -term bullish on Colombia. But if you really had to focus, it's Brazil and Mexico. So in Europe there's a similar answer to that, the same is true in Latin America. And I would like to think, right, it is expected that both the Brazilian and the Mexican economy will be among the top 10 economies of the world. So it's 9. 6. Yeah, the 2050. And then secondly, Argentina is great because in Argentina you have something that you can export, which is services people, the amount of engineers, the amount of lower price labor because of inflation and others.

24:02and I think that if you can play in two of the top 10 worlds economies and be strong there, right, I think you can build a great firm around that. If we think about, you mentioned that the services in the amazing talent, if we kind of go up the stack or down the stack, whatever way we want to take it, but to the kind of financing, we saw the evacuation of kind of foreign capital in the last year with the economic changes that we've seen. It's like a good thing for you or not. In a way, there's less competition, and also in a way, there's less financing available for land -time companies and less co -investors.

24:35How do you analyze the foreign capital with your role? It's a balance sheet. There are pluses and minuses. One of the biggest minuses is you have big pref stacks all over the place. All these companies that raised a lot of capital whose valuations right now should be much lower than the round they did in 2021 who have pref stacks that are underwater. And it's very difficult to finance those companies even at a discount because what are you buying? Right, if you're buying secondary early A shares or common shares, then you're under this huge pref stack So I think that's a very big negative. The positive is there are fewer people competing and prices have become much more rational.

25:10To me, I love it. To risk capital is gone This is left for people who understand the market who understand the opportunity for really going to help entrepreneurs So it's better. It's cleaner. There were people who showed up there in late 2021 because they were like sheep, right? Soapunk was leading the way and they all came behind. I think there's two going to be left to two great ones. You know, I have a lot of respect for GA. People often don't know, but if you truly study GA, the great returns have come from Latin America. It's going to be GA, hopefully it's going to be us. And then the rest, you know, they don't even know what the capital of some of these countries are.

25:44So it's great. We like it that way. And hopefully it will stay like that. I want people to be busy thinking about the US, thinking about China, thinking about Europe. and we'll do our thing in Latin America. And we like to be collaborative. I think the A is where the elbows are sharpest. C, do you get a lot of people coming together? Growth, you get a number of people coming together. We're happy to be that catalyst for other capital, whether it's local or foreign, but we want to price it, we want to assess the risk and bring other capital to the region. How important do you think it is having feet on the ground?

26:11Being there, having offices in the cities, extremely. There's a lot of adverse selection. There's some founders who might or might not be great, who play really well in New York and San Francisco. And so if you wait for them to come to you, that's all you'll think Latin America is. We were just in Brazil and we went to the middle of Brazil to a state called Goyeste, a town called Goyania. I don't know how many investors have been there. They said we were the first ones to go visit them at their offices, really interesting company. Those folks are not going to New York to raise capital from 57th Street.

26:39You have to go and find them and build a relationship. And you have to understand what Latin America is all about, right? You have to have lived in Latin America. We have good group of people who live there. You have to understand how people think in Latin America if you want to be a great investor I mean you got a in many case speak their language. It's not about just good showing up a Silicon Valley about it I've been delivered at those days are long gone. I'm naive monster. How do they think differently? You know, I could describe how Europeans think differently to US if you were to compare US to Latin American people How do they think differently?

27:12We have different issues or education these way wars or health systems are broken so anytime you bring technology to help you with help people adopt extremely fast. Education in many cases is pretty bad so suddenly when you start bringing online learning methods it's really really helpful. Transportation was broken this is why Uber exploded. The way retailers used to mark up their goods made it so expensive that they were charging interest rates up to 80%. So when the data sheen shows up with something that's 70 % cheaper it grows beyond what anybody can ever dream of because you're solving people's needs to different approach.

27:50And on the other hand you have a lot of different kinds of sophistication. I was just in Scarborough, New York and I tried to buy a bagel and they said sorry cash only. In Brazil that's a laughable statement nobody would say cash only. You pay instant real -time transfer from your bank account to the merchant's bank account using your phone everywhere. Latin America has something like 25 % of the world's fintechs. 25 % of quarter of the world's fintechs are in Latin America. Brazil is probably the most sophisticated financial market have ever come across. You can secure ties any stream of cash flows and sell it to the market tomorrow and it'll be purchased and distributed and bought by investors.

28:21These levels of sophistication are not really understood outside, let am, and so you'll come across a company in Brazil that is very capital intensive, but most of it is debt. And in Brazil, that's not a risk because you can actually raise a lot of debt really easily through a bunch of different avenues. So as long as it's not equity intensive, it's still an interesting capital -fishing company. But that's more difficult to explain to somebody who hasn't spent time He said about 25 % of the world's fintechs, I suppose, Davy did new bim before the show, with fun people to talk to. They are pretty cool people to talk to, I have to say.

28:49But when we think about kind of liquidity, and it's often another not criticism, but challenge discussed about that time and that time investing is where's the liquidity. New bank is one that has proven immense amounts of liquidity, delocal, another but not huge. How do you think about the liquidity challenge slash opportunity, and how do you evaluate that and discuss it internally? So there's a lot missing from what you'd the example you'd do to skip. For example, local listings. Brazil has a very deep liquid capital market. There are a lot of tech companies public in Brazil and they've made investors a lot of money.

29:21So I'm not even how big are they? Well, they're billion from 500. You get a lower scale to be viable as a public company in Brazil than you do. You don't want to be a sub billion dollar company on the NASDAQ. You'll be a rounding error for people. But from 500 million up to a few billion, you can list very comfortably in Brazil. And the other is M &A, Pizmo. It's a Brazilian company. I'm not sure if you've heard of it. They make financial infrastructure for banks, and they've been bought by Visa, that's the rumor. There are a number of companies from Argentina that have been bought, Octa, bought an Argentine company, for example.

29:52So, five bought an Argentine company. All of these are companies making technical infrastructure often in financial services. So liquidity doesn't have to be a big listing on the New York Stock Exchange. It could also be local listings, and it could be M &A. Do you know what they get does, sorry, I'm pushing the franery? Do you know what I think it does have to be if you want to fund or turn if you want to have scaled returns? Well, it depends on your entry price and you need some exits that are big on the scale of a New York stock exchange But you don't need all of them to be that. What do you think?

30:20What's that? Things in market and evolution, I mean, it's nice to have a local market in Brazil So that's going to create some liquidity for some of those companies And it's also nice that But NASA could remain open to Latin American companies to have proven scale that they can grow. And I think there will be a few IPOs coming of some great Latin American companies. Again there is going to be few players and that's what we like. If you are going to be just another investor, opening a new fund into something that's already been done many times like in the US, that was an exciting thing. What excites me is to go help build an entrepreneurial landscape which we started with SoftPunk, generate sufficient exits and that's going to create all the people who can dream that they can do the same.

31:00Latin America is under construction. Right, if he was already built, there'll be other people there. And we're builders, we love that. That's what excites me, a medical commitment to the next few years, so we can equalize Latin America. And that's our mission. And there's a presumption, you talk about fund returners. Growth is different from early stage. Not every investment has to have the potential to be a fund returner. You could have every investment have the potential to be somewhere between two and four X in growth, and that's great. If you speak to LP's, the exposure they're looking for in growth is pretty different from the exposure of the look at for at the early stage.

31:31So we don't underwrite to 20x potential for every investment. It's much more modest than that, but it has a lot less risk. So, loss ratio is how do you think about loss ratios as part of the I'm an early stage investor? My tolerance for loss ratios is very high. Plastin in some cases. As we said, this is going to be a 10 to 15 company portfolio. Ideally none of those go to zero. You said a brilliant thing which is South America's under construction. What do you think is yet to be constructed that needs to be constructed in next 3 -5 years. We have a great series A, seed, amazing funds, very well covered.

32:07Series B, Series C, GA, or self QED and a few others. And now we need the pre IPO and the IPO around. But I'll tell you something, you're never going to get there unless we're successful, we need to be successful on BC and D in order to create that IPO market. Because for great companies there's always going to be rooms for IPOs. Colored in Brazil, colored in the US, colored in London, colored everywhere. But we need that piece, the piece that's missing, the piece that we're going to go attack in order to create those companies that are going to be ready to do an IPO. So it's not about the market.

32:37I think that's a misconception. There's no big market. No, we haven't had those companies yet because there wasn't that sort of investors, which is what SoftPunk started. And we sort of have an obligation like, like, if you ask me, why are you doing this? I felt we started something special as SoftPunk. and it suddenly was soft -pung decided they don't want to focus there, they left a huge vacuum and I personally feel that we have one finished business that we need to go continue. So it's more than just going and deploying capital and generating good returns to me, I set a goal for the team in soft -pung and that way that was we need to equalize Latin America.

33:10Latin America had the lowest percentage of venture investing as the percentage of GDP of whatever than any other region in the world, I think as close to Africa and with soft -pung we started something special we equalize Latin America and suddenly that's starting to fade so we need to get back there. 500 million is a good start but we're going to require a lot more in the future. The other thing that's needed is talent and that's changing. Two sources of talent in the ecosystem. One is successful companies spawn talent. RAPB is one of the largest contributors to a Y -combinator in terms of alumni.

33:42RAPB alumni becoming YC companies. One of the largest contributors within the YC universe that's pretty stunning and it's a Colombian company that went through YC itself. the others foreign talent going to LaDem. We've seen all kinds of people, whether they're working remotely or they move full time to the region, working for companies in Mexico, in Colombia, in Brazil, because they're exciting, they're interesting. As we mentioned, many references that I did, they shoot every phone that he mentioned there in LaDem. I spoke to the GPs there, and a lot of them asked a question, which I wasn't sure if I was allowed to ask, but we'll ask it and we'll see if I'm allowed to.

34:14And they said, when you look at the investment barrier with SoftBank, what are the biggest mistakes you think you made that you're looking to correct with bicycle. That's a fine question, Tans. I'm British, it's very uncomfortable. This is why people like coming on my show. There is too much journalists. So the investing business, as you know, really well, I agree. I mean, you've been doing this for long enough. The investing business is a mistakes business. It's all about making mistakes. Then you find really good things. So you can't not make mistakes. I think the opportunity we saw a lack of capital and we tried to pursue that aggressively wherever we saw a lack of capital and tried to build a big support organization to help the companies after we invested.

34:50That worked for that scale, but I think the more the smaller, selective, more personal touch trying to change a company's trajectory one at a time is a better approach for a region that still doesn't have the full ecosystem maturity. So that's the most fundamental thing I change. I think slightly smaller is better for Lennon. With these genres, be more selective. Softbound was a portfolio play. This about choosing the winners, trying to avoid any big losses. And that we were investing in these companies are ones in which I think we're going to minimize the losses and we're not aiming for 10x20x.

35:24We want to make a few understand the gossip of baseball which some British people do. This is about hitting doubles or triples in the first fund. This is not about trying to invest a single amount of capital to generate, you know, a grand slam and we're very cognizant of that. We have no choice than to deliver a great fun because this is the first time fun. You're as good as your last fund and we need to make sure that this is a great one. How long do you think it'll take to invest the first fund? Well, vintage matters a lot. It's a tricky question. 2023, 2024 should be very good years to deploy capital just statistically speaking, but you have to resist the urged over deploy, especially at the beginning when every company is exciting.

36:02And so we have to pace ourselves. I would imagine something like three years. Before we move into a quick fire, we mentioned a conversation before the show. And it wasn't in my notes at all, but I really enjoyed it. And so I'm going to ask it anyway, you know, often we think and we hear about kind of what life balance. And one thing that the reason the show's success was because I bring Moon and life into it sometimes is like, I'm terrified of losing an inch on work with the expansion of personal life. How do you think about having a personal life, having a family, and still excelling in what you do and the strategy and the execution with bicycle?

36:34I'm going to embarrass Marcelo here. One of the the biggest things I've learned from him, he has this wonderful quote that I saw in Tokyo first and that it travels with him so clearly it matters to travels with him. I see it in every office. And the general gist of this quote is, work and play are not different things. They are the same thing, which is life. And that's a beautiful concept because there's not this partition of what you do and who you are. It's all of one piece. Marcelo's wonderful quality is, it's always happening together. So whether it's family or work or play, they coexist? That idea of coexistence I think is a really powerful one and it enriches each of those fears.

37:10I've learned not to try and draw sharp boundaries between now I'm working, or at home, or now I'm playing. It's just life, and it's okay if it seems into your family. What if your work is who you are? You asked me how long I've been doing this, but it is for nine years. I was 18 when I started, I've never traveled, never studied in the university. I've never known my adult self to be this. My work is who I am and it is my identity. What do you say when playing light, But life is who just that one. Sometimes people ask me like how do you do this because I mean a different country everyday and I'm traveling constantly and there's one fundamental basic rule of life.

37:47Most people don't follow it and they say they do and that is you gotta do what you love. If you love your job, that's your life. But that doesn't mean your family doesn't come into it. I'm here, I'm in London, I'm on holiday. But it's a combination of I'm not taking my kids to women on yesterday, walking around on the streets of London this morning by being here with you, having dinner with a real piece. And it's one of the same man, every day, every week is like that, it's a combination of my kids being at work or when I travel, you know, I usually take one or two of my kids and sometimes I'll go visit a company and say, hey, do you have an extra room, my kid?

38:18Let's put my kid there so he can play on his iPad while I'm doing this mini with you. And then I take my kid to grab a, grab an ice cream in the streets of São Paulo, it's just, you're truly happy and content with what you're doing. You will bring your family into it and your family loves that you're happy. So therefore they're happy and you make them happy at the same time. So you know, there's no such thing as a work life. It's one of the same. There's no Sunday for me. Sunday's as good as a Monday or I might take Tuesday off and I might work Sunday. I mean, just to me as long as I'm happy when I'm doing, I will keep it all my best.

38:48Most people are not. And that's where they struggle with this division word. Okay, work finish. I start my life. No, suggesting if you're happy, work and life are one of the same. Do you think that's a luxury of being very successful already? You can go into anything and say, oh my kids, my partners here, and everyone would bound their house in any room that you need for your child's play on the right pad. When you are more junior or younger, you almost feel guilty for bringing them along for integrating them. Hey, I was a struggling entrepreneur and it was the same thing. I mean, it was, you know, always to have this stuff in my house and my employees became an integrated piece of my life and I became an integrated part of a family son.

39:27And so I disagree obviously you got to keep boundaries right I mean don't show up with your kids to board meeting and I asked him to sit in the same table because Don't ask that. They're opinion about it. Not the same thing. They might be more helpful than the VC and then you're ready to hit you. I think if you're vulnerable to people and hey world normal people right I mean we all got kids we all got problems and just bring that on. I don't know at least I found the combination of bringing work and your normal everyday life together it allows you to maybe execute better. So I don't feel I'm losing an inch one thing I've learned in my fewer years on this earth I did there no rules were born into a context and we kind of look around and say okay I guess those are the rules, but the reality is there are no rules and so you just have to do what works for you Ignore the advice and ignore the noise and just make it work for you create your own path Don't follow your buddies footsteps.

40:14You're gonna be another one of them and you don't want to be another one You you didn't build this podcast following the normal routine. This place where I'm now is not a normal or retain place, you know, a lot of this, imagine if you were just a normal guy, you wouldn't have them on a followers that you have. This is true, it's the short shorts. Yeah, they're thin now though. Yeah, they're very thin. One front trousers too. Find a one before we do a quick five. Having the hard discussions is the most important thing. When you think about having the hard discussions as a partnership to say, how do you have them?

40:43Often people say, have them straight away. It's the right time to do it when you feel it. How do you think about having a lot of conversations between good personal? You know, we had a third barner. Yeah, we've had hard discussions, right? And we hit we all were only two partners and we were three and it was those hard discussions that made us be two and shoe and I have Difficult discussions, but we learned to compromise right and I'm a tough person I usually like it my way, but I tell you that shoe and the other partners that we have have taught me Hey, listen to others lately. They're changing my mind more often than ever before and I think that's what partnership is all about You got to bring your opinion, you got to bring your boldness, you got to bring and at the end compromise works in a marriage Compromise works in a partnership and I think we're building a relationship of compromise where we respect each other's opinion Incredibly well even in our investment committee meetings where I might have a high level of conviction But my other partners don't I'm going to retrench and up done the same I've been able to convey some of those things at the beginning.

41:43They say no way and I think that's that's what is great Nobody's the owner of the truth in your firm. Back to the idea of following your gut that Marcelo mentioned earlier. I think you always know when a discussion is gonna be hard. Your body tells you, because you don't wanna have it. And that's the strongest signal that that's exactly the conversation that should happen. You have to go into the difficult places that your body is telling you you do not wanna go to. Whether it's discussing an investment or discussing something about the partnership, you're always getting these signals about what you should be focusing on and that's what you tend to avoid.

42:12But it's a very strong indication that that's exactly what you should do. So you need a bit of courage just to listen to yourself and not be afraid to say whatever instinctively you fail is important without having a fight about it, which is the nuance. What was the most recent difficult discussion you can remember? Well it was about the partnership. It was a difficult one to go from three to two and it took a lot of time and lots of difficult discussions. Are we ready for a quick fry round? We are. Let's do this. I say a short statement, you give me your immediate thoughts. We're going to start with you, Marcelo.

42:39Let's do what's the biggest challenge I had do you think fee with bicycle over the next 12 months. To convince the world that Latin America is a great place to do business in. True. Or if you changed your mind on it in the last year. I think pieces overrated, just being very practical. I think big markets matter a lot. And I come from Kenya, right, which is about 50 million people population. If Kenya was 150 million people population, it would be a completely different story in the world stage. And so Kenya and Uganda and Randon Burundi and Tanzania and Ethiopia just need to merge. We need more M &A between countries and I think that's way more important than this idea of sovereignty that everyone's obsessed about So I think sovereignty is a variety that shouldn't say pieces of a rate of sovereignty is a variety that we need more country M &A That's the title.

43:21I must that I will spend your biggest lesson from working with she how's working with she changed how you operate She's more calm. She's more thoughtful. I'm learning to think a lot I'm a lot more thoughtful working with shoes and other people because she has a strong opinion on things she The inverse, I've learned to respect the momentum and the instinct and not to resist it and to really channel all that energy in a productive way. So Marcelo brings up a lot of really, really special stuff and you can't get in the way of it. You have to channel it. Marcelo, here's going to be the biggest win in Lantern than at 10 years.

43:53Doaster can help companies alter the course of their business in a bus in a manner. No doaster can have access to the student deals. She called a flip side. Here's going to be the biggest lose in Lantern than at 10 years. I was easy to answer the opposite of that. I know. I think passive beta capture, you know this whole idea that you just buy an index of tech and you've sit aside and let it perform. I think that's gone. I think you have to be a stock picker and so people that are just trying to place a range of bets. I don't think that works. Even in things like AI, the surge into AI now, we have to place a bunch of bets.

44:26I think that's wrong. I think you need to pick. Just like if you placed a bunch of bets in search, but you missed Google, it wouldn't matter. It was the right idea, but you really had to pick Google. You had to pick Amazon. Those who resist picking and instead go for big trends, all this. If you could choose one more man with Masaru, that you could have to sit on a board of your company by school ename, who would you have? Better or alive? Better or alive? Stube jobs. Why Steve? It's probably more intense individual having a room in my life. Take me to this. Sorry, I have to ask this. Take me to this meeting.

44:57How come the meaningless Steve Jobs came to me? So back then, I used to own BrightStar. And I had an idea of how could Apple double their sales and after many e -mails to Steve Joseph which he wrote me back no interest, no interest. One day he got tired of everybody pinning him by here to meet me so he agreed to take a meeting and that's how buyback and trading on mobile phones got invented. The whole idea of telcos make you sign it to your contract, Apple makes new technology every year. The only way you get people to actually get their technology every year is by buying back the old phones and that's something that it took a very long time and some print -tence meetings of somebody who absolutely sick perfection in everything that was done and it was just fascinating to me to learn of how you never settle for less than a hundred percent.

45:43That's a fantastic story and that's on Bible Contrailing going on going on invented. I love that I didn't know that. Yeah, she I'm gonna pick Neil Shen he was a banker he was a founder he was an investor to play China I don't even want to guess at the returns but it's an absurd series of funds, you know, Hall of Fame. And he's managed to play this incredible role in the Chinese ecosystem, elevating the ecosystem and making great investments at the same time. I just think that wealth of knowledge and experience would be incredible. Masala, what's your biggest mess and how did it change your mindset as an investor?

46:15Probably in New Bank, we didn't get there earlier on. We were stubborn in evaluation and the founder was more stubborn and the founder won. And I think now, at the end, you know, I'm a Huge personal investor into new bank. I got soft bank to be an investor into new bank But we were so new. I think it was her first week and we just said don't this is it and we were wrong So I always tell people it's hard to say you're a great Latin American investor having missed new back at the beginning And I say it publicly and we bet on another horse and that horse didn't perform as well as no one did So I mean, I made a lot a lot of bad investment decisions in my life But that one bothers me because it's within my region is within my knowledge if there's one thing that I learned is don't be stubborn and I was very stubborn.

46:56Missing the good ones as bad as investing in the bad ones, maybe worse. Probably open AI. So when we were at Softbank in 2017, I think they're about Masha, was all over AI. And the team was small enough that we were all focused on the topic and looking around at what was interesting and being built in the world of AI. And we came across open AI, we knew open AI, we had discussions about open AI, and we just didn't do it. I think that was a huge mess. And I think part of the fear was they're trying to build so much and sometimes you have to build everything. They're industries or markets that are thin protocol markets meaning there's just not a lot of infrastructure.

47:30And so the company has to do a lot of the work that's just not existing in the ecosystem. And that's true in Latin by the way a lot of industries in Latin are thin protocol. Industry is just nothing and so a company has to do a lot. And often that turns investors off because you say this is very operational intensive or capital intensive or what have you. But you need that to create the business and it's a business that's more likely to endure. So tohs are ones that we'd miss and I tell you one that we did that was a terrible miss and I was at DX I did that myself at Softbank and he was one thing that probably taught me the best lesson ever I'm a fan can I go to office?

47:59How was it meeting with Sam? I'm telling you what I tell you but do not ever invest in things that you don't truly understand just because of FOMO and I remember us one day before and Sam shared with me the list of old investors I was very lucky right I had a tremendous amount of decision range within Softbank I can honestly say that my entire investment life mass had never said no to any investment that I ever decided to do and I went to mass that said mass ad. I just cannot understand what am I missing? Why is everybody investing? Are we going to be the only idiots who are not going to invest in this?

48:31And then mass ad looked at me and said to your decision. So I invested 150 million dollars on FDX, which I mean apologies to soft bank because I should never made that investment. But it's probably one decision that has changed my life forever and never going to invest in something that I truly understand and I'm never going to invest based on what everybody else is investing. That's going to be a great learning lesson for me, of to never break those rules, right? And I broke the golden rule because I didn't want to be the only guy left considering I was in charge of also doing crypto within or blockchain within the SOAP and Gecosystem, big miss, and a big lesson.

49:07To understand an industry, sometimes you have to study it. Then in FSA had he, we are lifelong learners. I am bothered of my not so big knowledge within the AI ecosystem. So now I became a Harvard executive fellow and I'm in charge of one of the biggest lab, which is the DQ lab, which is the AI lab at Harvard. I work very closely to always keep myself informed and you're able to leverage an incredible ecosystem of incredible intelligent people, Harvard, and people to bring that knowledge into what I do for everyday living. If not, it would be impossible for me to try to learn it all myself. So now I wouldn't consider my expert, but I have pretty good knowledge of what is going on in the AI world.

49:49And you always have to find clever ways to be that I tried to do that within blockchain. And it was so massive. And people were sharing information and you were just investing in momentum. I'm never ever going to invest into something that I don't have a good level of understanding. And also Bitcoin go up. No, now they should be coming to go to $100 ,000. Yeah, I don't know who, they were very respected and all these things. I do find stature and success helps that learning there. Like you can pick up the phone to 90 -hour time people in the world. And you will learn from the best when I'm looking at Fintech deal, I'll call Mickey Malca and say, help me understand.

50:22And he teaches you. I do find that as well as it says. It's an amazing, highly successful people love to share. Like you have the same thing when I call Mickey. And then not only Mickey can call successful people are actually hungry to share. And you would think they wouldn't. That's why they write books. That's why they're getting podcasts. That's why they do this sort of crazy things. And you know, that's admirable of you that you're able to, that you actually go people to learn more. Oh, hundreds. I also think cooling is a lost art. Yeah. Yeah. Penaltyman one, what would you be decided to change about the world of venture?

50:54Speed. I think we've fetishized moving quickly. It's just not that valuable, especially at the growth stage. But I think even at the early stage, the whole idea that I have an exploding In terms sheet, it's going to expire this Friday, first of all, is nonsense. Term sheets don't expire. This is a made up concept. That and the idea that you need to make a decision on limited information, you can't ask for anything else. Those are cancers that came out of the zero interest rate regime. I think we just need to all calm down and make good decisions. It's better for founders. If the process is a little slower, we're not talking about sclerotic, just a little slower, because their company will be diagnosed a little more depth.

51:26They'll learn something along the way. They won't think raising money is just snapping a finger. It's much better for investors. So speed, that phomo speed dynamic, I think is a really awful trade adventure. Well, I said, what would you just be? I like where we were going. The whole world got overly excited in the world of tech investing. You have crossover funds. You have a corporation. Everybody who suddenly became a tech investor. And a lot of people learned their lesson. And you have a lot of these funds who we all admire, who when you look at the true returns are truly disastrous. I believe, and this is why I love my partnership with you.

52:00So, being an operator, you know how to operate business, you understand what it takes to scale, but there's an art of investing. So to me, operating is a science, investing is an art. If you can combine both, I think we're going to have something really, really special. The venture world is starting to shape up where all these people who thought, hey, let me just mark up a term sheet, lie to me, because I am betting that somebody's going to come and six months later put a higher valuation, and that's how we made our money. I mean, that was the once -escape. Now, we're going to see who actually got guiding up.

52:31So, fun times ahead and a lot of things are going to get on cover and I think reading best is what I want to throw. Do you think so, sorry, just like fun lives mean that actually it's a very difficult business to die. It's generally very opaque. Alpes, in a lot of cases, are quite lazy in that deployment. Well, we've been with them for years, that's quite nice people. They host a good AGM. Yeah, we'll keep going. A lot of sins are changing. Do you think so? But I mean I realize it's changing and I love this right when you go to all this Middle Eastern conferences here before you used to see the top people of Silicon Valley raising money.

53:06Today you see the grief founders there, which is great. Going direct. Going direct. Not DTC, DTF. All the LPs are going direct to founder. Which I think is good. There is going to be only very few funds that actually create value that are going to to raise money and I'm talking in the next 10 years but you know the source of capital is getting incredibly smarter and accelerated pace in terms of going after the best companies and the best companies know that in many cases you can skip the intermediaries and when you have so many intermediaries I believe that the best will survive and the best will thrive and that's what we're betting on.

53:41And you're seeing really aggressive fund sized targets not being met we've all seen the news 90 % below what they thought they would get. So it is changing. I mean, the funds do have long lives, and the last the tale will be long. But I think we're past the excesses. Final one, when we think about next five years for you and for bicycle, in a dream scenario, if everything goes to plan, like we asked founders, what could this be? If I asked you what could bicycle be? What would your answer be in a dream scenario over a five year period? Or a 10 year period? Five years isn't too long. A high quality firm whose decisions mean something to the rest of the ecosystem, other founders or LPs are investors.

54:19If we make an investment, it means something. I want to be a Sequoia Chinese to a Chinese entrepreneur. I've had a chance to visit China. And the gold standard today is when you are part of the Sequoia China ecosystem. And we make no mistake. We went to this in Nile, which we spent time with him. We spent a lot of time with the entrepreneurs. And we ask him, what's a great fun for you? and 99 % of them, the best ones, basically list a Sequoia China and they gave us the list of services. So we have a very deep alliance with Sequoia China and we'll say more Sequoia China with Neil Shen and I like Neil a lot and I respect him and I think we want to build something that is similar to that.

54:57But we want to make sure we're relevant, we don't miss the new backs. We want to make sure that in every single great component that is built in Latin America, we have had a role to play either in the beginning, in the middle, or towards the end. I think we have that opportunity because not a lot of people are in Latin America today. I can't thank you enough both of you for coming on the show. Honestly, I love this. Thank you so much for this. I can't wait to see Bill Biscope. Thank you. Thank you. Latin America is under construction and we are builders. I mean, that has to be a tagline of the century.

55:29That was such a fantastic discussion. I want to say huge thank you both to Marcelo and Toshu for making that happen. and such a joy there if you want to see more you can find it on YouTube by searching for 20VC. But before we leave you today, this episode is brought to you by Tegas, the go -to research destination for bold investing. Tegas curates expert in -size analysis and financial data to give you powerful perspective for your investment decisions. With lightning fast access to over 60 ,000 transcripts across 20 ,000 companies, you'll discover a wealth of unique insights to fuel your fundamental research.

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