Cut The Check: Investors Must Think Like Operators | Building Your Internal Algorithm in VC | Defensibility in Fintech | Carlos Torras, Partner FIntech Collective

In this conversation, Carlos shares his multicultural background and how it has influenced his career in fintech. He discusses his journey from sports to working at JP Morgan and eventually transitioning to Suyo, a company focused on empowering low-income families. Carlos highlights the importance of networking in Latin America and how it led him to discover the venture world. He elaborates on Fintech Collective's investment strategy, emphasizing the intersection of financial services and AI, and the significance of regulatory environments in fintech defensibility. The conversation also touches on portfolio construction, identifying venture-backable founders, and the importance of perseverance in entrepreneurship. Carlos shares insights on Minka, Simetrik, and Strike AI, showcasing their impact in the fintech landscape.

CHAPTERS:

00:00
Intro

03:43
Early Interests and Hobbies

07:10
Transition from JP Morgan Trading to Latam Startup

09:59
Wedge to LATAM Tech Ecosystem

11:23
Wharton & Path to Fintech Collective

13:11
FTC Internship

16:07
Fintech Collective Thesis

18:35
Nuances between Mature & Emerging Markets

19:23
Parallels between Latam & India

21:40
Defensibility in Fintech

23:16
FTC Portfolio Construction: Less Bets & High Conviction

24:41
Gaining Conviction: Founding Team

25:45
"Building a VC backed company is one of the most masochistic exercises someone can do"

27:15
Navigating Chaos: The Founder’s Journey

28:39
The Role of the CEO in Startups

30:44
Identifying Non-Obvious Signals in Founders

32:26
The Importance of Perseverance

33:07
Exploring FinTech Collective's Portfolio

35:02
Minka: Building Payment Infrastructure in Colombia

36:11
Simetrik: The Power of Team Alignment

39:18
Strike AI: Addressing Cybersecurity Needs

43:06
The Importance of Humility in VC

45:59
Lessons from the FinTech Collective

46:41
Time Management & Productivity

49:10
Final Thoughts

50:22
Outro

Cut The Check w/ Mack Meyer is a podcast about venture capital, startups, and entrepreneurship in Latin America and beyond.

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Transcript

Mack Meyer (00:34)
Carlos, thanks for joining us today. I appreciate you making the time.

Carlos (00:36)
Thank you. Thank you for having me here. It's a pleasure.

Mack Meyer (00:38)
Yes, I've heard many great things from several people I respect. So I'm excited to kind of get your insights on the ecosystem and emerging markets. But before we get into your path at Fintef Coecto and what you're doing leading the emerging markets, I'd love to start with a little bit about your background, where you're from. I got wind that both your parents are Spanish and Brazilian and how that impact on your cultural has had for you.

Carlos (01:01)
Yeah, of course. yeah, my parents are, my father was born in Brazil to a Spanish father and a Lebanese mother. My mom was born and raised in Spain to Spanish parents. So how it impacted, yeah, I think the way it most directly impacted my upbringing is probably the fact that because of my dad's upbringing, right, we moved to Brazil as a family for his work when I was eight years old, right? So from an early age,

I was raised abroad and also I had to more specifically, I lived in Latin America. I started learning Portuguese and it started definitely a stretch of time that I spent in Latin America. In total, I've lived there for more than 10 years of my life and now obviously it's the region where I focus a lot of my professional attention, the vast majority of it. So definitely it was relevant for that.

Mack Meyer (01:47)
Coming from, I guess you'd say like bi-cultural backgrounds, linguistically it's one part. Was there other aspects that were a challenge to find as an identity without getting too into that? But just curious.

Carlos (01:58)
Yeah, definitely. mean, I've always had a foot in different places, right? In part, I'm European, in part, I'm Latin American passport-wise, and guess I am a permanent resident in the US. I'm at the very least Americanized, right? So I think it always, I've always had a bit of each, and I like to think that obviously you can always learn the best of the different places in which you are, and I think that shapes you as a more well-rounded person, right? So I would say that.

Mack Meyer (02:09)
Yeah.

Yeah.

Gotcha. And then going into like kind of your childhood and so forth, was there any like hobbies or things you excelled at? I think it's interesting to hear people that have reached levels of excess that people aspire to. Was there something in sports, math that you did well at?

Carlos (02:37)
Yeah, mean, look, I think for me, sports definitely became a passion. I think by virtue of how much I moved around, didn't dedicate myself to any particular sport from an early age. kind of moved around. I did focus on water polo from age 15 onwards. So I wouldn't say I excelled. My cousins were professional players. they definitely, you know, by no means did I reach their level, not even close.

Mack Meyer (03:00)
Yeah.

Carlos (03:01)
But you know, I did play, I was fortunate enough to win a high school state championship.

played in college and even I had the pleasure of playing my first year here in New York when I was already working full time. played at NIAC, which is a team with former Olympians. And although it was obviously recreational, it was incredible, right? So I think sports have always been very motivating for me.

Mack Meyer (03:14)
Wow.

Yeah, I actually played water polo for one season my freshman year because I played baseball. Wow. They're like, you'll be fine. I was gassed. couldn't the warm up. I was done. Everybody else is swimmers. I was I was literally a fish in water, but not doing much. Gotcha.

Carlos (03:24)
nice. Yeah.

Yeah.

Yeah. Yeah. Yeah.

Mack Meyer (03:38)
So moving on, I had asked this as I was researching a little bit about you. Coming from such a diverse background, I came across that you actually speak five languages. Most of these languages you learned as a kid, and did you develop some as you grew older in your professional career?

Carlos (03:52)
I did, mostly, yeah. You're giving too much credit. mean, keep in mind, I was raised speaking Catalan and Spanish at home, because those are the languages my parents spoke to me growing up. I moved to Brazil when I was eight, right? So I started learning Portuguese, and I do have family in Brazil, so I had to communicate with them. And I went to an American school from age onwards, right? So I had to learn English, right? And I think that was good time investment. So there you have it. That's four of the five. And then...

Mack Meyer (04:17)
There you have it.

Carlos (04:18)
And then French, I picked up later. mean, my French is definitely much more rusty these days, but I, you know, I did, I think knowing all the other languages and it made it easier. that's the one I did study, right? But it makes a difference, you know? I mean, when you don't live, when you're not living in the place where they speak the language fluently, it's just a lot harder to achieve mastery.

Mack Meyer (04:38)
Yeah, and I guess as you moved around you were forced to at a young age I speak to people and learn the language or you wouldn't have friends

Carlos (04:42)
Exactly. Exactly. That's

the best way to, that's the best forcing function to learn a language. Yeah, there's nothing better.

Mack Meyer (04:51)
Yeah, for sure. getting into your college years, you decide to go to school in the US at Penn, and then you moved into JP Morgan as a trader. Do you want to talk about, was this your vision of when you graduate, hey, I want to go work in New York or was this more by default, like most people say?

Carlos (05:06)
No, look, my decision to go to JP Morgan, I think, was informed by and more specifically to trade currency options was informed by my fascination for the markets. And I think especially the socioeconomic forces levers that sort of move markets. And a currency at the end of the day is a manifestation of that. So that motivated me. the idea of trading derivatives was intellectually stimulating from a mathematical

Mack Meyer (05:20)
social economic forces.

Mm-hmm.

Carlos (05:34)
point of view. that informed that. The irony of the situation is the fact that looking back, I covered every currency except the Latin American currencies because they have their own desk that did options forwards and other things. when you look at today, it's like today basically almost all I do is Latin America focus. So it's kind of funny, But it is. is. But look, think for me, was an incredible starting point. think I learned to manage levels of stress that I never thought were.

Mack Meyer (05:34)
So that's the aggregate of situation.

my Yeah, that's so ironic

Carlos (06:00)
were possible, having having done sports, because I mean, it just required very quick thinking and very quick reactions to doing and and processing many things at the same time. But but yeah, it was fascinating. think, you know, I did learn there that the lifestyle that that entailed was was also not for me. Right. So that's what prompted me to make a decision quickly in terms of, know, this is not the path that I want to go down. So after a year, I made the decision of leaving without having a

Mack Meyer (06:05)
Mm-hmm. Mm-hmm.

Yeah.

Carlos (06:26)
next job lined up yet. I took some time to think and that's what landed me in, you know, a couple steps later it landed me in Colombia with Suyo, which obviously was a very, very different thing. But I returned to Latam.

Mack Meyer (06:30)
Yeah.

Yeah,

and Suyo, and please jump in if I'm misunderstanding the concept or the vision, was basically empowering low-income families to have better access to property rights and title. And at first, it seems like this could be something that's not for profit, but it is venture-backed and for profit, correct?

Carlos (06:52)
Yeah, exactly. mean, Suyo, fundamentally, exactly. We create a platform that allowed property formalization and it streamlined the process, especially as you say, for low income families, which is where most property informality lies. And there's many degrees and different shapes of property informality. I won't get into it because that will require the rest of our time. But certainly, it is a very obscure process that includes

Mack Meyer (07:06)
Yeah.

Yeah.

Carlos (07:17)
many different types of players, like you have engineers, have architects, have those making the appraisal. All these people have to play a certain role in lawyers, of course, right? In following processes that are extremely Byzantine and difficult. And that's hard to do for people with advanced education. It's very hard for others. So we try to streamline that into a process. obviously, it was a B2B2C sales motion. We were basically offered as an employee benefit.

Mack Meyer (07:18)
different types of players, like you have engineers,

like that.

Yeah.

Carlos (07:45)
to certain corporations and companies. And it was fascinating. think as a business model, definitely tricky. But as you say, mean, the objective was definitely to have a social enterprise that was for profit. And I think to a great degree, it was achieved and the lives of thousands of people were improved. So I'm very proud of the work we did there and the people that I worked with.

Mack Meyer (07:49)
I as a business model, definitely tricky, but as you say, mean.

Mm-hmm.

Yeah, and just to kind of come full circle on that, was it very receptive by the end user or was there like friction like this doesn't seem right? This could be scam.

Carlos (08:13)
No, I think it was well received, especially after we went through employers, right? Because I think that sort of, you're right, like doing it B2C directly is a very hard thing to do. But, you know, what was difficult was creating the sense of urgency, right? For people that have spent decades living in informality and have much more competing needs for their, you know, for their income. think, you know, having people visualize the fact that

Mack Meyer (08:17)
Mm-hmm.

Yeah.

for their, you for their.

visualize the

fact that this is something.

Carlos (08:35)
this is something that you need and the

benefits of this you will see in decades to come was, know, the sale was much easier to people that were already in their 50s, 60s, because I think they had more perspective. But when you were speaking to people, you know, starting in their 20s and 30s, it was much harder, right? Because they just, you know, they saw other uses for that money. And it's very fair. So I think that part was, that was quite difficult as part of the sales process.

Mack Meyer (08:40)
was, you know, the sale was much easier to people that were already in their 50s, 60s. Yeah.

Mm-hmm.

And this was your entry point into, you could say, the Latin America tech ecosystem. Was this the seed that eventually you said, hey, I want to come full circle later on? Or did you always know before this is what you want to do?

Carlos (09:10)
Yeah, so what I would say is, when I was, yeah, exactly. So when I was at Suyo, I discovered the venture world, right? Obviously, you know, I had a contact, especially with an entity like the Media Network at that time, Peter Radley led the initiative, we're still in touch. You know, they do fantastic work since then, you know, the Media Network, for example, out of the Media Network, Spawn Flourish, which is one of the best, you know, impact focused FinTech investors out there, I would say, and we have a great relationship with them.

Mack Meyer (09:16)
Yeah.

Mm-hmm.

that the media network, for example, out of the media network, spot storage, is one of the best, know, in fact, for the investors out there, would say.

Carlos (09:37)
But it put me in touch with that. I think it also put me, by trying to find financing options for our customers, I started to see the ecosystem of digital wallets that was beginning to proliferate in Colombia. And that, going back to my finance roots at Penn, the idea of fintech and the concept of fintech really began to become much more interesting to me. And of course, after that, I came back to the US to pursue my grad school between Wharton and the Harvard Kennedy School. And that's where

Mack Meyer (09:44)
Hmm

Mm-hmm. Yeah.

Carlos (10:05)
I started with Wharton right? Fintech at Wharton not surprisingly,

given the finance focus, is a big thing. And that was part of what got me to Fintech Collective, which of course I can tell you more about.

Mack Meyer (10:11)
thing.

Yeah, and we can get into that, but the question I was going to ask before that was, at this moment in time, was this an opportunity that you started to say, okay, I want to pursue this MBA at Wharton and I know I want to be in venture? Or was it still unsure where this was going to lead me? Because most people say I went to the MBA for X.

Carlos (10:33)
Yeah.

No, I honestly, when I went to business school, I thought I was going to be an operator. I very much enjoyed my work as a COO at Suyo. Yeah, I I think at heart I'm an operator still today. I always tell people, right? think I'm an operator masquerading as an investor, but that's exactly, I think that's what most of us at Fintech Collective do. And I think that's why I'm here. But yeah, I definitely thought that was going to be the case. What happened is that since I did a three-year program, and it didn't end up being three years because of COVID, but anyway.

Mack Meyer (10:42)
Yeah.

Yeah.

Yeah.

Carlos (11:03)
That was the framing. I was like, okay,

Mack Meyer (11:05)
Yeah.

Carlos (11:06)
my first summer, have a whole summer to experiment. was like, I don't have to be as focused on doing an internship and a job that I want to then get full time. So that opened my mind to the idea of venture. was always, venture capital and private equity are big things at business schools, right? So was like, okay, maybe I should consider the other side of the table. I did get along with the VCs that backed Suyo. I did find their work interesting. So let's give it a try. And I think I was...

Mack Meyer (11:25)
Yeah.

Yeah.

Carlos (11:29)
I was very lucky to find the opportunity at Fintech Collective because there was a confluence of factors that I think led to the work that I've been able to do really now looking back over the last five years. And I think it was very opportune timing in many ways.

Mack Meyer (11:42)
Yeah. And at Wharton, this is kind of where the inception of your relationship with Gareth and Brooks, the managing partners came in and did the role evolve organically? Basically you went to the internship and an opportunity opened up.

Carlos (11:54)
Yeah.

Yeah, exactly. So I did my summer. I did the summer associate program here at FTC in the summer of 2019. But, by the way, highly recommended 21. I think we we not really we still do it today religiously because it's a great feeder for talent. And I think it's a and honestly, it's a great experience. So anyway, so so I did that. And then through that, you know, I started working with Gareth and Brooks from the beginning. They've they're.

Mack Meyer (12:05)
Wow

So I did that and then through that I started working here in the groups. From the beginning they've

Carlos (12:18)
they've always given me a lot of autonomy. And even

Mack Meyer (12:19)
always given me a lot of...

Carlos (12:20)
that summer, they told me basically like, look, we're gonna equip you with some business cards. We're gonna teach you the FinTech Collective intro speech. And we want you to go to Latin America and come back and report to us basically. I remember, yeah, Gareth said that the first week. And I remember like we had lunch and in the afternoon, sort of like shyly go to him and I'm like, Gareth, like, did you mean, when you say go there, did you mean like literally like, know, buy.

Mack Meyer (12:31)
Yeah, go find talent.

Carlos (12:44)
plane tickets and go there. And he's like, course, what else would I mean? And I was like, well, I don't know. mean, maybe Zoom. And he's like, no, no, no, you're going. And I went for three weeks. And honestly, that trip was incredible because of the Fintech Collective brand and the fact that we had already started making some investments in the region. And of course, we had a portfolio here in the US that was gaining recognition. A lot of doors opened for me. So I used that as a massive networking exercise to basically meet anyone that I could in the venture scene. I think I had like 10 meetings every day for like three weeks.

Mack Meyer (12:59)
Mm-hmm.

Mm-hmm.

Yeah.

Carlos (13:11)
And I, well, maybe I'm exaggerating, but I was really like, yeah, yeah, definitely more than five. And that, and it's funny, because even looking back today, that started relationships that today have led to several deals that I have done. So that trip was a game changer. And I'm super thankful to Brooks and Gareth for opening that door for me, because they didn't have to do that, right? They could have just had me here in New York doing analysis or due diligence, and they sort of gave me the chance.

Mack Meyer (13:12)
Wow. Yeah. Five or plus. Yeah.

Mm-hmm. Yeah.

Yeah.

Mm-hmm.

And that time you said Fintech Collective had some exposure, some investments in the portfolio, but there wasn't truly a lead partner or associate or principal in emerging market Latin America at the time?

Carlos (13:51)
No, there wasn't. As I say, the founding father of FTC Latam was Sean DePell, who's a partner here and a good friend of mine. Sean was doing, at that time he was doing all lending deals. He was doing Latam and then he was doing digital assets. Since then he's gone on to lead two of our DeFi funds. And he's a very known name, I think, in the DeFi world. He's also an amazing guy.

Mack Meyer (14:10)
Nice.

Mm-hmm.

Carlos (14:17)
But he's the founding father of FTC Latam. And through him and through him and another principal at the time, Matt Levinson, there's, yeah, exactly. There were a couple of investments that were done. think by the time I got here, if my memory serves me right, there had been two deals already, smaller checks. And I actually got a chance to work on two this summer I was here. So that was great. But yeah, but we're not leading deals in the region yet.

Mack Meyer (14:31)
Mm-hmm.

Nice.

Gotcha. So just following on as a co-investor. So that kind of leads right into the Fintech Collective thesis. And when I was researching the thesis, at the time, Gareth and Brooke said basically rewiring the way money moves through the world, which I thought was very interesting at that time. How has it evolved over time, and how do you guys do such a good job covering the globe and also covering everything in Fintech?

Carlos (15:00)
Thank you. We do what we can. But so yeah, look, think fundamentally the thesis remains the same. think nowadays, right, the way to think about is we're really investing in intersection between financial services and AI, right? Because AI obviously is a paradigm shift, right? And what's happening there is allowing the redefinition of many verticals and subverticals across financial services, right? But what's beautiful about FinTech financial technology is that it allows us to play

Mack Meyer (15:02)
You

Mm-hmm.

Carlos (15:27)
in many different categories with business models that are very different in different parts of the world. For example, when you look at a payments company, it has nothing to do with an asset management company, which is very different to a lending company. So I think that in that sense, the categories that we look at remain relevant, but we are looking for the next generations of models in that. And we're always open to different types of categories as well. Like, for example,

Mack Meyer (15:29)
Yeah.

Mm-hmm.

Mm-hmm. Mm-hmm.

different types of categories as well. example,

Carlos (15:54)
You know, we're always pushing the thesis,

Mack Meyer (15:54)
we're always...

Carlos (15:56)
which I think is very healthy and it's very necessary. I just yesterday, we announced our series of investment as a lead in Strike, which is a Uruguayan cybersecurity company, right? Like Strike, mean, the way I see Strike as a foundational infrastructure provider for financial services entities in the region and beyond, because today they're also they have clients beyond Latam in the US. They've had interesting traction. But I see Strike as an infrastructure provider, right? The same way that

Mack Meyer (15:59)
Yeah.

Mm-hmm.

Bye bye.

Carlos (16:22)
the same way that I see Simetrik as a fundamental infrastructure provider in a different category, right? When we talk about the backend financial operations of some of these entities, right? And I think in a world that is very rapidly digitizing, especially in Latam, and I've seen that transformation in the last five years, because COVID was of course a massive accelerant to that effect, these type of solutions are very necessary. So, you know, one has to continuously push the thesis, one has to understand where things are going, where they...

Mack Meyer (16:32)
that is very rapidly digitizing, especially at that.

Yeah.

Mm-hmm.

Carlos (16:49)
where they can go, you you can't, you can't get stale, right? Because otherwise you, yeah, you don't advance.

Mack Meyer (16:52)
Yeah.

Yeah, and I'm going to come back to this kind of broad range in the financial stack, as some would say. But you guys have offices basically around the globe. How do you see different cycles and fintech in a mature markets? Do they help you identify opportunities in emerging markets or is that maybe a misconception?

Carlos (17:11)
it's a good question. think, yeah, look, we have an office in New York and an office in London. I think undoubtedly the work that we have seen or the evolution of fintech that we have seen, especially in the US and Europe, really, if you think about Brooks and Gareth and their track records and their careers, they've been in fintech for 25 years since they met creating Multex in 1999. They'll get mad if I'm dating them, but you know, I'm saying that they have a lot of wisdom.

Mack Meyer (17:32)
Yeah, yeah.

Carlos (17:36)
Yeah, mean, look, mean, obviously that that, you know, that gives us very good perspective and understanding certain trends. I think that you cannot just look at developed markets. Like when I look at Latam the two, the market of reference for me that is most relevant is actually India, which is a place where we don't yet invest. But I have spent time and energy looking at and I have, you know, good connectivity because I think it's probably the best point of reference. And even and even I think looking at the ecosystem in China is interesting, obviously.

Mack Meyer (17:41)
Mm-hmm.

Mmm. Yeah.

Yeah.

Carlos (18:03)
structurally very different to Latam, but there are interesting parallels in a country that developed extremely fast and obviously the the wealth creation, the middle class was rampant. Latin America is not exactly doing that, but there are interesting parallels and we've taken time to look at that as well. Like we co-wrote a piece with Polymath on payments, parallel payments between the Latam and China, I think that was in the summer of 23.

Mack Meyer (18:07)
extremely fast.

What?

Yeah.

Hmm.

Carlos (18:25)
So anyway, so we've looked at that as well.

Mack Meyer (18:25)
Mm-hmm.

I think it was a week or so ago, maybe two weeks, Arjun Sethi from Tribe was making the same parallels how he compares India with Latam, but he still thinks Latam might be a little bit behind, but he thinks there's a lot of parallels in the demographics.

Carlos (18:42)
I think there are certainly, and only demographics, also the India stack and especially the UPI, the real-time payment rails and the infrastructure built around that is not only a global reference point, but of course a point of reference, especially for a market like Brazil or even Mexico, where the realities are relatively similar and the socioeconomic structures.

Mack Meyer (18:43)
Yeah.

Mm-hmm.

Mm-hmm.

Carlos (19:04)
are quite similar, right? So I definitely think, you know, I think especially in Brazil, you see a lot of comparisons because of the creation of peaks.

Mack Meyer (19:05)
Mm-hmm.

Yeah, we'll get into what you guys did with the payment rails in Colombia. But before we get into that, a broad question, and I think you'll have an interesting answer is, how do you think of defensibility in FinTech, especially when it comes to distribution advantages, regulatory environments, incumbents? Do you have any thoughts?

Carlos (19:27)
Of course. Yeah, think it depends on the model. look, in fintech, in fintech, think regulation is a very important thing. I think you sometimes, especially in emerging markets, having certain licenses is vital for the functioning of a certain model. And the time it might take you to secure a certain license that is especially relevant in Mexico can be a make or break. So I think that that's definitely important.

Mack Meyer (19:29)
Mm-hmm.

Mm-hmm.

Carlos (19:51)
we think about the defensibility as well, we can think about go to market quite frankly, because I think I would say, right, like having unfair and by unfair, don't mean illegal unfair, meaning advantageous distribution advantages. It makes a big difference in markets where you have massive conglomerates, right. And the concentration of GDP and certain economic groups is quite concentrated, right? Like I think it becomes very relevant to be able to develop those relationships, exclusivity agreements or

Mack Meyer (19:55)
I would say having unfair, by unfair I don't mean people, unfair meaning advantageous, distribution of advantages, it makes a big difference in markets where you have massive conglomerates, right, and the distribution of GDP and certain...

I think it becomes very relevant to be able to develop those relationships, specific agreements or

Carlos (20:20)
relationships more informally, right? And I think that that's something we, for example, in Matilda's case, right, like their agreement,

Mack Meyer (20:21)
relationships more importantly. think that's something we, for example, I think that's case, right? Yeah.

Carlos (20:26)
their exclusive agreement with Santillana across Spanish speaking, you know, that's, you know, that's, that's, that's, that's a game changer, right? And I think these type of things also create defensibility. So those are two thoughts on how we think about defensibility for these models.

Mack Meyer (20:30)
Mm-hmm.

Great.

Yeah,

thanks for that. And before we get into the portfolio and talk about a couple of the companies, and actually I mentioned strike in the question, how do you guys think of portfolio construction? I know FinTech Collective is now over almost a decade and a half. How do you guys think about how you guys deploy capital, follow on approach and so forth?

Carlos (20:55)
Yeah, so for us, portfolio construction is very, you know, it's, we were very thoughtful about it in the sense that we'd rather have a concentrated portfolio. We'll make 15 to 20 core bets per fund. And we typically like to lead or co lead deals, have significant ownership post investment. Ideally do a price round structure aboard and be very close to the investments, be able to reserve capital for follow-ups. And you know, we have an opportunity fund now. So if the company performs well.

Mack Meyer (21:15)
be able to reserve capital for follow-up.

Carlos (21:20)
we can then incorporate it to our opportunity fund like we have done for Simetrik or Matilda to give a couple examples, right? So we very much are part of the school of thought for lack of better words of just doing less bets and really doubling down on them. That's how we like to invest. And that's why before when I was joking about the fact that we're operators at heart, it's true. That's how we like to do things. We like to be able to spend time.

Mack Meyer (21:20)
Mm-hmm.

Mm-hmm.

Carlos (21:42)
with our founders, be able to help them on several things and spend just hours working on them and iterating on ideas. That's really, I think, what wakes us up in the morning and gets us excited.

Mack Meyer (21:51)
Mm-hmm.

Yeah. And I saw also, really want to be the first institutional investor to lead the round. How do you gain conviction? You mentioned waking up and like really being hands on and you can do that when you're only making 15 bets a year or investments. How do you gain conviction so early when someone comes to you with an idea and they're saying, I want to raise my first institutional check?

Carlos (21:56)
Is it?

Yeah, think, look, at the end of the day, the most important thing is the founder and the founding team, right? I think that one, after doing this for years, I think you develop certain ways of evaluating the potential of people and trying to get it. mean, obviously this is much more an art than a science and sometimes we're wrong. But I do think, as Brooks likes to say, that you develop your internal algorithm, right? And I think after...

Mack Meyer (22:16)
Yeah.

Yeah.

Carlos (22:34)
after several reps of talking to founders, you start noticing subtleties, right? So that's one thing, Studying that, obviously as we build our network, especially in a region like Latam where the tech ecosystem is relatively concentrated, you can reference people with queries, right? You can basically see, who worked with this person, who would know them, who was on the other side of the deal with this person and get a sense, right? So I think that that...

Mack Meyer (22:38)
Yeah.

Yeah.

Carlos (22:59)
That is the most

important part of our work in that sense. And then, of course, you have the more conventional to diligence aspects.

Mack Meyer (23:06)
Yeah. And you mentioned this really understanding the founder. Is there some things that you've seen the last six years, I think now as a partner leading the Latam initiative that are like key to really understanding this person has a chance to build a generational company?

Carlos (23:21)
Yeah, so I like to say that I think that, look, building a VC-backed company is probably like the most masochistic exercise someone could do. And I mean it, it really is not for everybody because I always say it's a trade-off, right? Like you're giving significant ownership of your company for the chance of growing faster and accelerating an outcome, right? So I think some founders just fundamentally don't understand that compromise, right?

Mack Meyer (23:29)
Yeah.

Mm-hmm. Yeah, yeah.

Carlos (23:45)
And I think the personal sacrifices that you have to be willing to do in terms of the time requirement, the stress level, There's one aspect of that, which is like the effort, focus, stamina. But then there's more. And I think that few people can reconcile this with the second part that I'll now describe, which is more the creativity and quite honestly, two things, the willingness to constantly question what you're doing.

Mack Meyer (23:52)
Yeah.

Mm-hmm.

Yeah.

Carlos (24:11)
in a way that is not distracting. But the best founders that I've seen, for example, Alejo and Santiago at Simetrik do this very well, and I've seen it many times. You have to be willing to steer the ship in a different direction or make decisions that end up being consequential when they compound into other developments in the future at any given moment. All of us, and especially a founder, wakes up in the morning every day and you have a to-do list of 200 things. So the fact

Mack Meyer (24:13)
Yeah.

in Santiago at Symmetrics where I do that.

giving to steer the ship in a different direction or make decisions that end up being consequential when they come out into other developments in future at any given time.

This is like 100 things.

Carlos (24:40)
Being able to suspend reality like that and make these decisions is a very, very hard thing to do, especially for people that I think are very driven and focused because sometimes you can, you you put your blinders on, you're executing and you can close your eyes to that. think that's a problem. And that leads me to the last point, which is you have to enjoy that. Like I think a founder that is able to thrive in this chaos, that enjoys it, that derives energy from this and really has a good time.

Mack Meyer (24:44)
is a very, very hard thing to do, especially for people that I think are very driven.

Close your eyes.

I think a founder that is able to thrive in this chaos that enjoys it that that derives energy from this and and and really has a good

time

Carlos (25:09)
somehow undergoing

massive stress. Like, well, there's very few people that can do it, but some people can. And I think when I met Santi at Strike, like I was like, wow, Like this guy, you put him in the fire and he goes with a smile and he loves the challenge, right? And no matter what he's facing, I think he's gonna be able to find a way forward. And like that's, you know, that condition pushing our thesis into cybersecurity, right? So there you have it. I think, I know that was...

Mack Meyer (25:16)
I was like,

Yeah

There you go.

Carlos (25:32)
I know that was a long answer, but I think it's like the combination of all these things that make a venture backable founder. And finding this is very hard and identifying these traits in someone when you don't know them before is also very hard. you know, it is what it is.

Mack Meyer (25:35)
No.

Yeah,

I think you mentioned a hint at it with the founding team. Have you seen this? And I wanted to hear your opinion on this, where you like the founding team, but the weak point or the place where you have the least conviction is the CEO. Is that really hard to then move forward because they are the steering the ship, or is that maybe not as much as a problem?

Carlos (26:00)
Yeah.

I've never been asked this question before. It's a very good one. Yeah, yeah, yeah, yeah. Yeah, it's a good point. Look, wow, okay, so I would say the title of CEO can change. So I think, so the immediate answer would be yes, that would be a concern because I think ultimately the CEO has to make very important decisions, right? So if you don't see the person being able to do that, then that's an issue. So for example, sometimes when we see co-CEOs,

Mack Meyer (26:07)
That's good for me. I like that then.

Yeah.

Yeah.

Yeah.

So for example, sometimes we see close

heroes.

Carlos (26:30)
By the way, there are companies that have it, some of which we have backed that I think are performing very well. But typically that's a bit of a yellow flag because we see a lot of that not work because oftentimes one person needs to have the ultimate leadership at the end of the day. But that leads me to the fact that, I think the leader of a company at a certain moment doesn't have to be the leader of that company going forward. And I think that sometimes if the CEO has certain...

Mack Meyer (26:34)
Yeah.

You

Right.

Carlos (26:55)
weaknesses at that moment but can contribute value down the line, then I think I would be willing to consider having that person in the founding team because maybe that person is better suited for a next iteration of the company. Because the company, as these companies grow, it's kind of like babies, right? They just change constantly as months go and the needs are different and it's just a very rapid cycle. So that's how would answer that question, yeah.

Mack Meyer (27:04)
Yeah.

Mm-hmm.

Yeah.

It's just a very rapid cycle. So, so I thought we'd actually... Yeah.

And the last kind of few questions on just founder profiles and you're probably met with thousands of founders now. What are some non-obvious signals that the common and maybe angel investor or operator doesn't understand that you pick up on as you look for founders and potentially invest in them?

Carlos (27:34)
So less common signals. would say, look, I think that the way that some founders answer questions during an a pitch, call it, is very telling. I think that after looking at so many founders and sort of building the internal algorithm that I was telling you, you can sense when people, think, are getting defensive, when they are

Mack Meyer (27:54)
Mmm.

Carlos (27:57)
more intellectually open to a challenge and when they're sort of, or when they're giving you an answer that is scripted or that is just safe because that's what they know how to say, right? I would say, exactly, exactly. Yeah, yeah, yeah. But one thing I would say is that, at the end of the day, I think the best founders, they have to be willing to incorporate feedback and take challenges, but usually they walk away with the plan that they came in with, right? Like very,

Mack Meyer (28:00)
And when they're sort of, or when they're giving you an answer that's descriptive or that is just safe. Or complete BS.

Yeah.

Carlos (28:24)
It's true. mean, there's a certain level of stubbornness and self-belief that they need to have. So I think finding that balance is very hard. And sometimes when you're doing a pitch, like after so many of these, you start seeing some characteristics where you can tell if the person, you know, again, it's very hard to gauge and one can be totally wrong. But sometimes you're like, okay, this person, if this person's already getting defensive when I'm pushing a little bit in one of the first questions, like one of the first conversations, I can't imagine what this will both like if the company is having problems later. Right. Like this is probably not someone that is very

Mack Meyer (28:39)
Mm-hmm. Mm-hmm.

Yeah.

Yeah.

Carlos (28:53)
open to change or someone that is going to be able to at least incorporate feedback and have honest conversations.

Mack Meyer (28:57)
Mm-hmm.

Yeah. So would you say if you had to pick one trait, what would it be that's the most important thing for a founder?

Carlos (29:03)
for a fun.

Perseverance. Yeah, above all. think, yeah, because you can have, you can be smart, you can be creative, you can be flexible, but you will have to endure. It's very hard. It's very, very hard and it takes a while.

Mack Meyer (29:06)
Perseverance.

bubble.

Yeah, yeah.

Yeah, now it's moving into the portfolio of FinTech Collective and specifically in Latam. You do sit on quite a few board seats to name a few. Minka, Simetrik Strike AI, which I'm so happy I saw before we talked, among others. So I wanted to dive in a few of them, ask some questions, get an idea of what you were looking at and how you gain conviction. First,

Carlos (29:39)
Yep.

Mack Meyer (29:40)
Dive into Minka and from my understanding, there basically was an integral part of building the payment rails in Colombia for Transfya. And now it's become a part of basically regulation as well. Is that true?

Carlos (29:55)
Yeah, look, Minka is fundamentally a very technical company. One of the most technical companies that we've invested in and one of the most technical founders that I've worked with. And I've had the pleasure of working with Dom since the summer when I, since my summer associate days that I told you about, right? So we've known each other for almost six years already.

Mack Meyer (29:59)
Mm-hmm.

Mm-hmm.

Mm-hmm.

Carlos (30:11)
Yeah, you're right. mean, Minka was really ahead of its time. As you say, they provide the underlying infrastructure for real-time payments, and they provide that fundamentally. And they've been able to power, as you say, Transfia, which is the peer-to-peer real-time payment system set up by the ACH of Colombia. Now there's several changes in that in Colombia that are undergoing, and we won't get into details of that. But yes, but Minka's technology has proven to be

Mack Meyer (30:14)
Yeah.

Mm-hmm.

Yeah. Yeah.

Carlos (30:37)
useful to power systems that clearly are moving in the direction of the future. So we are very excited, as you say, to see Minca continue to power real-time payments in Colombia, but also expand to two different geographies in the company. definitely is pursuing several projects that will lead it in that direction. So yeah, it's a very interesting company.

Mack Meyer (30:43)
Mm-hmm.

Mm-hmm.

Yeah.

And when you reflect back on those early days, because you've been working with them for a while, why were they so able to balance this regulatory policy standpoint, but product side, but working with them? Because it's really hard to do that, right? Especially in emerging market and especially in Colombia.

Carlos (31:13)
Yeah, I think Dom is is a is an extremely patient person. And I think that when you mix, yeah, when you mix this technical knowledge, because he's someone that understands the details incredibly well, and is very close to product and tech, as well as the fact that he's very patient. And he's a creation guy that became fluent in Spanish and, you know, and settled in Colombia, like he was able to truly exactly have conversations at a government level that are you know, that

Mack Meyer (31:30)
Yeah. Wow.

Carlos (31:39)
that are long and require a lot of, again, a lot of patience and iteration. But I think the mixture of these two things allowed him to succeed and to really unlock the Transfee opportunity.

Mack Meyer (31:42)
Yeah.

Yeah, and I recently saw like last year they were potentially now expanding into Africa and you mentioned India. So they're looking to basically build a global company. Yeah.

Carlos (31:59)
They are, yes, they are. think

very much still focused on that time, but yeah, their ambition is global.

Mack Meyer (32:04)
Okay, moving on to, you know, Simetrik and you guys led their series A in 22 and then you also, I think they raised in series B in 24. I think you participated. You referenced them earlier. What did you see and what did you gain so much conviction on those two founders, the founding team?

Carlos (32:15)
Mm-hmm.

Yeah. Yeah, look, I think for me, beyond Alejo and Santi, as I call them, right? Like, I think it was I remember there was an afternoon that I I camped out in their office in in Bogota in October of 2021. And I met all the heads of the different areas, the ones that were there because a few of them were in Buenos Aires. They have a team in Buenos Aires as well. And the alignment in vision and sort of coherence in objectives and

mentality that I saw in that group of people I thought was special. was like, I, you know, the Simetrik product is very hard to explain. And I think, and at that time they were going from version one to version two. Yeah. And so, you know, there were a lot of things that were not given, but, but I was like, wow, these people have, have created a group of very talented individuals that are extremely committed to this company, to what it's building and have massive clarity and thought and really

Mack Meyer (32:54)
Yeah.

Carlos (33:13)
They all say something that is very consistent one with the other, right? Without even being a series A company, already had head of people. From the beginning, they brought a person called Andres who was great and he was fully focused on building the talent and the culture of the, being the guardian of the culture of the company and making sure that they laid out the foundations in which they would subsequently build. And I think that that is, and I think that that is crucial. I mean, that's something that

Mack Meyer (33:17)
Mm-hmm.

And yeah.

Carlos (33:38)
Even today, honestly, Simetrik truly is special in that regard. I don't know how they do it. They're now a decentralized company. But even today, the talent retention they have is phenomenal. The sense of commitment that they have is just extraordinary. They have these fests as they call them every year, where they now bring the whole company to Colombia. And yeah, it's like a cult, like I say, in a very positive way. But it's wild. Oh yeah, these people are completely obsessed with Simetrik. The sense of mission is just extraordinary.

Mack Meyer (33:44)
Yeah.

FOMRA.

Yeah, it's like a pause. Yeah, and it bars away.

Yeah.

Carlos (34:04)
for a company that is basically building financial operations automation, right, which is not exactly the sexiest topic.

Mack Meyer (34:08)
Yeah, no,

I was going to ask that. It's now across 35 countries and at a high level without getting too into the technical terms. It's basically financial integrity as a service, and they work across FinTech embedded payments and marketplaces. So they work with Mercado Libre and also a Nubank And basically, they're allowing them to reconcile transactions through cross-border, correct?

Carlos (34:24)
Is it?

Well, they're doing is they've created a tool that fundamentally what it does is financial reconciliation for payments. So for companies that have a high degree of pay and payout transactions, they're able to reconcile the payments. And at a broader level, what they're creating is a suite of products that will allow the automation of the financial operations of such companies. So yeah, mean, they're fundamentally a B2B software company selling into the financial enterprise.

Mack Meyer (34:38)
Mm-hmm.

Mm-hmm.

Mm-hmm.

Carlos (34:57)
as well as other types of companies like marketplaces, retailers, payments companies, etc.

Mack Meyer (34:59)
Mm-hmm. Yeah.

And they've been global from the beginning. You mentioned they're like a decentralized team, and the team is, don't know how big, but I assume quite big. Do you, from their perspective, it's clear they thought globally from the beginning. Do you find that a lot of Latam or founders building Latam don't think globally enough and they think too regionally, or is it really case to case?

Carlos (35:06)
Mm-hmm. Mm-hmm.

Well, not every company can be global, right? Like it's difficult. Like, for example, certain companies, you mentioned, we talked about regulation before, certain companies are very tied to the idiosyncrasies of the geography in which they operate. But Simetrik, being a B2B SaaS and a company that, thankfully, earns its revenue dollars.

Mack Meyer (35:29)
Mm-hmm.

Mm-hmm.

Carlos (35:40)
I think that definitely helped. what made, by the way, what took Simetrik Global from the start is the fact that they had customers from Latam that started operating beyond Latam. Right? So when you think about companies like Payu or more relevant, the Delocal or eBanks, like those guys just took them with them. Right. And then from there, they were like, wait a second, actually, this is, we see this market need in other geographies. So we see this market need, you know, in other emerging markets. And then honestly, even in, in developed markets, even in the U S right. So that's sort of what

Mack Meyer (35:42)
by the way

Hmm.

Mm-hmm. Here.

Mm-hmm.

Mm-hmm.

Carlos (36:09)
fuel the idea of like, okay, we have

to look beyond just Latin America. have to actually, internationalize the company. And that's what the company is doing now. And I think that's what can certainly make it a multi-billion dollar company, Because the product market fit is not only in Latin America. Today, they've signed, let's see, they've signed one of the biggest payments companies in Africa. They've signed one of the biggest payments companies in India. They signed the biggest in neobank in Southeast Asia. And they're beginning to make commercial attraction in the U.S., which is massively exciting.

Mack Meyer (36:15)
Mm-hmm.

Mm-hmm.

Carlos (36:37)
And as you said, they did raise the Series B a bit over a year ago, so the company is very well capitalized So we're super, super excited about their future.

Mack Meyer (36:42)
Yeah.

Okay, last kind of portfolio topic, it's of recent, is Strike AI. And I was gonna ask this, and you mentioned it. It's not technically in this fintech ecosystem directly, but you mentioned you gained great conviction from the founder. But essentially, they're hiring world-class hackers to help companies perform audits and efficiency with penetration testing, right? Share a little bit of how you met the founder and how you decided to lead the round.

Carlos (36:49)
Thank

Yeah, So Strike Fundamentally is building continuous pen testing, right? And a suite of products that allows that for companies that have a high amount of data, transactionality and sensitivity, right? So financial enterprise, course, are probably the number one in that category. We see a massive need for this in Latin America because the amount of cyber crime in the region has increased exponentially.

Mack Meyer (37:12)
Mm-hmm.

Mm-hmm.

Carlos (37:32)
Which makes sense because on the back of the rampant digitalization that has happened right through COVID and the creation of PIXs etc. it makes total sense. You need tools that support that type of growth. you know, and especially with the advent of AI, like the payments article that was published yesterday on them explains, think that hackers can just, unethical hackers can get more more creative, right? So you have to both have ethical hackers that can track that. And you can, of course, which has been the basis of their solution for now.

Mack Meyer (37:33)
Yeah.

Mm-hmm.

Mm-hmm.

Carlos (37:58)
or you leverage AI and other automation to be able to build more products that can do that as well. And that's Strike360 at a very high glance, that's Strike360 exactly product. And that's what the company is very focused on doing. And obviously this route is a substantial part of the resources are gonna help them accelerate on that. How did I meet Santiago, you asked? I met him, funny enough, I met him through Greyhound. It's a fund that I have a very good relationship with.

Mack Meyer (38:05)
Yeah.

Highlight.

Yeah.

Yeah.

Carlos (38:26)
out of London. And funny enough, I became closer to Greyhound when they looked at the series B of Simetrik, where they did not end up investing. But I think it's part of the, it also says something about this industry, right? I think you always have to have a humility in accepting certain outcomes and decisions, and you always have to be willing to learn from others, and every fund has a different process, right? So I think sometimes investors can get, you know,

Mack Meyer (38:33)
Yeah, yeah.

Mm-hmm.

Right.

Carlos (38:49)
offended, right? But they can get bothered when other funds don't see eye to eye with them. Founders can get bothered when investors don't want to invest in their company. But look, mean, I think from every interaction you can learn. I think that's the way to look at things. sometimes you don't work with somebody the first time, you might work with them at another occasion, right?

Mack Meyer (38:52)
going to see how it's going to work.

except for

Wait, look at me.

Yeah. And the two last points I had on strike is the first is, you think the timing is now more idealistic or perfect in the sense of maybe five, six years ago, Latam, cybersecurity without the integration of AI, the use case would be there, but the demand for the market, maybe not. Am I following this correctly or has this been a trend that you've been following?

Carlos (39:23)
Yeah,

for sure. think the confluence of, again, rapid digitalization plus I think the backlash of cybercrime on the back of that and the fact that AI is both making cybercrime more dangerous but also making cybersecurity more intelligent is the confluence of these two things are the big macro tailwinds that I think can make Strike a very big company. Yeah.

Mack Meyer (39:46)
Yeah. Last thing on strike. I saw the round was oversubscribed. How do you think you guys won the round to lead it? I'm sure many people are bidding. What makes you think you stood out and ultimately have the chance to lead the round?

Carlos (39:57)
You would have to ask, you would have to ask Santi the question. but I think, we had the fortune of being able to, something was spending time in New York. had several attractions with him. And I think ultimately we established, we established a personal connection, which sounds cliche, but I think, I think both, think we proved to him that were people that can add value and people that will be close to the business and will make an effort to help him in whatever way we can.

Mack Meyer (40:06)
Mm-hmm.

Yeah.

Mm-hmm.

Carlos (40:19)
And I think that that is a difficult thing to do. And I think that's something that, you know, that we really, really strive to do. And again, I think part of having a concentrated portfolio does just that.

Mack Meyer (40:19)
Mm-hmm.

Final thoughts, just like quick, simple kind of questions is, as an investor, what's been the biggest lesson working alongside Brooks and Gareth as founding members of the Fintech Collective Fund?

Carlos (40:40)
Yeah, think, look, the biggest lesson is that even if you're an investor, you have to think like an operator. think that the way they build things, the collective is the way, in many ways, the you build a startup, you have to empower people. have to quit them for success, but you have to let them run with what they want to do. you have to respect where you have expertise and where someone else can add value and delegate that. And I think that's how it was treated here, which I'm

Mack Meyer (40:56)
Yeah.

Mm-hmm.

Carlos (41:06)
extremely thankful for and I think that that's what I would hope to do for my team here going forward and who knows in the future.

Mack Meyer (41:13)
Yeah. Yeah.

How do you think of productivity and time management? I like asking people this because you juggle a lot. You're on a lot of boards, you observe boards, and I'm always struggling with that myself. How do you manage it? What are your frameworks?

Carlos (41:27)
Yeah, it's a very good question. look, I think that the more I, the busier I get, quote unquote, I think the more important it is to really just make time for less people in a way, right? Which sounds contradictory, but I think, because at the same time, you really have to try to surround yourself with opportunities to have new attractions and have new experiences, right? But I think,

Mack Meyer (41:46)
Mm-hmm.

Carlos (41:48)
The more you realize that you have certain people that you really trust, their opinion and their judgment, I think it's very important to stay close to such people because they can inform your decisions in a way that is more powerful than 50 other conversations. So as you create this close-knit group of advisors or mentors or however you want to call it or friends, course, because they ultimately become friends and ideally are friends, I think that that's

Mack Meyer (41:55)
Mmm.

Yeah, yeah.

Mm-hmm. Mm-hmm.

Carlos (42:15)
That's a good guiding principle. With that said, I struggle with time management all the time. So I'm by no means an expert. no, man.

Mack Meyer (42:17)
Yeah.

Yeah, you're not an expert.

your observation for yourself or other great investors, what's the most underrated skill? Because you've been doing this a while.

Carlos (42:30)
to be a good investor.

Mack Meyer (42:31)
Yeah, as an investor.

Carlos (42:32)
I think creativity. think, you there's, think about, you asked underrated, right? I think you think about an investor, you think about technical ability, you think about, about frameworks, I think creativity and yeah, and courage right? I think you, sometimes you have to, you have to get very creative around the structures of how you do deals, around the people that you can bring to companies and around the advice that you give founders and how you do it, because it's very,

Mack Meyer (42:34)
Mm-hmm.

yeah

Carlos (42:57)
exercising persuasion or influence varies massively depending on the company. So if you're not creative, what worked for founder A is not going to work for founder B. Even if the advice is right, no, that's the crazy part. Even if the advice

is right, if you're not conveying it in a way that makes sense or that is effective, that sometimes is not as effective or it's not as powerful. So yeah, so you have to be, so you got to be very creative.

Mack Meyer (43:13)
Yeah.

Yeah or patient too. Getting it to them. Yeah.

What are you most proud of today? And then last part of this is what do wish you spent more time on? Personally, whatever. It could be anything.

Carlos (43:28)
What am I most proud of?

I think what I'm most proud of is my work at Suyo. I ultimately was able to help the lives of thousands of people and work with fantastic human beings. of course, through my work at Fintech Collective, I'm able to support founders that can change the lives of many people. But when I was there, I did it directly, right? And ultimately, I aspire for that proximity to impact. That's really what motivates me. And sorry, what was the other question?

Mack Meyer (43:45)
Yeah. Yeah.

Yeah.

So

What do you wish you spent more time off? Reading.

Carlos (43:54)
yeah, reading, reading. I love to read.

I love to read. think I look the hardest thing to find time for is thesis development in my line of work. I wish there's so many reports and books and things that I want to read every day and it's just, and finding time to do it, going back to time management is the hardest thing to do. So I need to get better at it.

Mack Meyer (44:08)
Yeah.