Are VC & IB Both Service Businesses? | Generative AI | In Venture, You Want To Say The Right Yes | Julian Roeoes, Picus Capital

In this conversation, Julian Roeoes shares his journey from investment banking at Credit Suisse to venture capital at Picus Capital. He discusses the investment strategies employed by Picus, the challenges and opportunities in Latin America, and the evolving landscape of AI and fintech. Julian emphasizes the importance of decisiveness in venture capital, the traits of successful founders, and reflects on his learnings and regrets in the industry.

CHAPTERS

00:00
Intro

04:24
In venture, "You want to say the right yes"

08:10
Picus Capital's Investment Thesis

10:00
Team Structure for Global Agnostic VC

12:13
Real Time Payments & Emerging Markets

13:10
Technology Leap Fogging in Emerging Markets

14:53
Evaluating Following On Opportunities

16:45
Niko Energy

19:12
Opportunities in LATAM

20:44
Generative AI & Long Term Value

23:32
Evaluating Enterprise vs. SME Investment Opportunities

25:33
Competitive Advantages for Founders in Latam

28:18
Key Traits of Successful Founders: Reflective Obsession

29:50
Lessons Learned as a Venture Investor

31:25
"In Person Actually Matters"

37:50
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 (00:00)
Born in Germany, Julian started his career at Credit Suisse, where he worked in investment banking and capital market division in New York and London. There he advised financial services and fintech clients on M &A and financing transactions, gaining expertise in financial structuring, risk assessment, and capital markets. Now at Picus Capital, Julian focuses on investing in energy, climate, fintech, enterprise infrastructure, generative AI, cybersecurity, health care. Picus follows a long-term investment approach and has backed over 170 companies globally.

including notable Latam startups like Nico Energy, Matilda, Xepelin and Clara. Today we'll explore Julian's investment banking to venture capital, his views on scaling startups in emerging markets like Latin America, why Picus Capital double down on Nico Energy, plus we'll get his insights on where the next big opportunities lie in fintech AI sustainability, specifically in Latam. Thanks, Julian.

Julian Roeoes (00:47)
Perfect, thanks for having me.

Mack (00:48)
Yeah, so I think I was always intrigued. Obviously, you guys are a global company, but there's this emphasis on emerging markets in Latin America. So we'll get to that. But first, if you can share your story transitioning from investment banking at Credit Suisse to venture capital now at Picus Capital and from there.

Julian Roeoes (01:04)
Yeah, perfect. Happy to start there. I think in a very short nutshell, think my journey, I would say, always centered around entrepreneurial opportunities. So I studied in Germany at WHU, which is a very entrepreneurial small business school already there. Had a startup on the side. Actually, together with Robin, one of the founders of Picus Capital, which for us was full circle when I came back to the firm.

Something that drove me even into my studies in the first place was that I actually worked, it as an operator, but like worked at a traditional bank in Germany. did apprenticeship for two years, worked as a kind of small regional bank. And for me, it was always crazy how inefficient the financial services industry were as an operator. So I seek to study business and always wanted to work with financial services companies as a consultant or advisor that brought me through like some intense things at like JP Morgan, Baron Bear Capital, which is a private bank eventually took Credit Suisse in London where I started, moved then to New York.

to covering financial services companies there, traditional banks, of tech enabled lenders, and eventually a lot of FinTech companies who work with kind of large payment infrastructure, software companies, exchanges and so on. But then also obviously was in FinTech more and more early companies, kind of challenges who were actually going after the status quo in these big markets. And I think what like really intrigued me back then

was the ability to kind of take this like late stage understanding that you gain in investment banking in terms of how do you and IPO companies, how does M&A work? Like what's the at scale, like kind of cashflow generative and profitable business and how can these businesses either be replaced or enabled with technology and like some of the new challenges that were emerging. So I think for me, eventually after eight years in banking took the step towards early stages, it was a very natural transition in a way how my career evolved.

Mack (02:45)
And for you, When you were looking at the evolution from investment banking to this venture side, did you know exactly, okay, I'm going to circle back and connect with an old friend and join Picus or was this kind of like, let's check all the options in Europe and in the U.S.

Julian Roeoes (02:59)
I would say I had been like back then, I think in 2020, early in 2020, actually in the beginning of COVID, joined Picus I had spent roughly like four or five years in the US and New York. There were lot of opportunities that always popped up, but nothing ever that really intrigued me. I think when Robin came to me and I knew him for many years, I knew when he joined Picus was actually the time when I moved to the US. So we already spoke about it back then, if that would be an interesting time to like join forces again.

But when Picus M was at the time to open like the first international office, I think for me it was a very logical extension. So it wouldn't be fair to say that I was in the market looking for like a venture capital opportunity. I think it just came a lot of things together. And then obviously the disruptive nature of COVID happening, there was so much uncertainty anyway in the market. So was like, let's add a bit more uncertainty and actually like try the career shift.

Mack (03:46)
And as you transition, I think it's always interesting. I'm sure you have many friends and colleagues, and I do as well, where you kind of look at these businesses both at service businesses, but one of them you're more saying yes, and the other you're saying no. How was that transition, and how do you kind of view venture versus investment banking as far as serving the client?

Julian Roeoes (04:03)
Yeah, that's a good question. I would say they're both services businesses, but I think as an investor, you have a very long-term service engagement, right? You kind of really have skin in the game. You serve kind of your portfolio founders, kind of, especially for us as a privately funded firm that has a 10, 15 year investment horizon, kind of to the end. And the end might be an MPO, an &A, kind of a very long-term perpetual cashflow business, or kind of sometimes obviously also like the shutdown of a company, but you're there from the beginning to the end. think the...

kind of investment banking advisory, it's more mandate based. So it's always pretty predetermined three, six, maybe like 12 months. So I think there's a major difference. I think also with this kind of, let's say notion around like as a banker, you always say yes, as an investor, you always say no. I think to some degree that holds true, but the most important thing as an investor to say the very right yes. If you say yes once to the right company, it doesn't matter how many times.

You say yes for the wrong reasons or how many times you say no, but you need the one right yes. So I think while obviously you say no many more times as an investor, I think the one yes or the one or two yeses that you actually get right are the most.

Mack (05:11)
And off that point, what was the biggest challenge going from investment banking to venture? I'm sure the hours you're very used to, the hustle mentality and so forth. But what was the hardest part?

Julian Roeoes (05:22)
Yeah, I think there were a couple of things, but I would say in banking in particular, like there's some comfort in numbers, right? Numbers are sometimes like the reflection of truth in a business. Like if you see retention, growth, efficiency and margins and you've late stage companies that give some comfort in terms of reviewing opportunities, especially if you transition into early stage venture, I think you need to be a true seeker of finder. You need to talk with founders jointly, with customers, with experts and really

understand is there a merit in this opportunity without having the basis of a lot of historical references. You can talk historically with again, experts, customers, other companies have tried to build in this space, but I think you need to be a true seeker a bit more than relying yourself on desktop research, kind of how you could do it in banking with a more numerical kind of approach. I think with that, you need to be way deeper into like business models. You need to be way more operational, right? Because the moment you make the decision and the investment memo is written, it's not over, but you kind of actually need to get involved with.

Mack (06:14)
you

Mm-hmm.

Julian Roeoes (06:18)
kind of companies, I think you need to think way faster because as I'm sure you know, in early stage venture, there's a lot of like stealth founders. At the banker, you have two weeks to prepare a meeting. If you get on a call with a stealth founder, you like on the spot need to make sure you understand it. You kind of like ask good questions and have a good discussion without being prepared. And I think the last thing I would say, it's an interesting single point of failure in a way in venture, because it's like me as a partner, sometimes it's one or two juniors maybe, but me as a partner talking to a founder. And if I make the wrong call,

Mack (06:25)
Yeah.

Julian Roeoes (06:46)
That's kind of it. banking, you have like 10 different teams, you have 20 different people like in the room. So there's a lot of like distribution of responsibility.

Mack (06:53)
Do you think decisiveness is very important in both industries or is it more important to maybe be decisive in venture?

Julian Roeoes (06:59)
I think you need to be decisive in both to some degree. think in banking, obviously, there's also like resource shortage and so on. you can like whatever, advise the buyer or the seller, like buy different buyers, advise them. So you need to pick the right one. But I think it's important in both. I think in venture, yeah, it goes back to the point you need to say the right yes. So yeah, if you can't make decisions and you can't prioritize, think at Picus we look at 80,000 companies a year at the top of the funnel, 80,000. We don't talk to all of them, but from 80,000 go to 5,000 calls.

go to maybe like 150 that we discuss in the partner committee and then maybe 25 investment committee decisions. Yeah, you need to be very decisive to like move things through the funnel efficiency. You can't diligence everything.

Mack (07:36)
Exactly. So let's now shift towards Picus's approach and so forth. You guys are essentially global, right, in some way, and then you invest across multiple sectors. How has the investment thesis evolved and how is it so well defined across so many broad categories?

Julian Roeoes (07:51)
Yeah, look, would say, and I think it's fair to say we are diversified and agnostic with some footnotes to it, but diversified and agnostic both regionally, kind of in global countries and markets, but also like by industry. I think for us really the most important thing is like, can we or do we believe there's a amazing team, there's a very big addressable end market, and there's software and tech abilities or capabilities for a strong economic profile in the business.

And I think that has always been, and I think will probably always be kind of the core kind of like of our investment hypothesis and that you can then rely through like different markets and like different verticals. But I think we try to be very structured and disciplined in terms of, especially as a pre-CCD investor, focus on the team's capability, focus on the size of the end market and the dollar opportunity to generate revenue and the capabilities to like generate good margins on that revenue with software and tech.

And yeah, I think that has guided us to a lot of different subverticals. I'm happy to talk about some of them and some of the challenges to being so diversified. But the core was really these three elements that we always seek.

Mack (08:56)
Yeah, I mean, we could get in now to the challenge of being diversified, not only sector-wise, but geographically. And I know the team is bigger than some funds, but it can't be everywhere at any time, right? So how do you guys kind of take this funnel of 80,000 potential opportunities, work it through your pipeline, but also be lean and efficient?

Julian Roeoes (09:16)
Yeah, mean, look, think for us, there's a couple of things, right? So we, I think have a team obviously in New York where I'm based and kind of like lead our Canada, US and Latin America investment activities. We have a large team, the largest in Munich and in Germany, but have different offices across Europe. have an office in Bangalore, have a team in Beijing and like Singapore. So all markets like really kind of globally. So I think we combined this, let's say, matrix organization where we have a kind of like regional focus with teams on the ground, but we still run.

as a one organization that's not compartmentalized. So we don't have different targets or different investment kind of ratios by region, but we do everything like as a global team. And we combine that with a vertical specializations. What every investor as a journalist at heart, we run the company across squads. So we have a renewable energy and climate tech squad. We have a FinTech squad. have an enterprise software squad. So we always try to combine like maybe like call it a first layer of defense that kind of like regionally specialized was then like an adjacent.

expertise on the business model perspective to make sure we always get the best and brightest in front of the founders. And we combine that with a very proactive approach for investment hypotheses. there's obviously different trends. AI is an obvious one, but in the past there was B2B marketplaces, was quick commerce, was e-scooters, whatever. There was CFO suite of services and payment reconciliation. But we always try to be very proactive when it comes to these trends.

Mack (10:16)
Mm-hmm.

Julian Roeoes (10:38)
spend a lot of time when we believe that they are emerging, like understand from a customer perspective what's needed, where the opportunity lies, that when we find the right team and the right company in these spaces, that we can come in very prepared with a strong view ourselves and then also like move relatively quickly in these deals. But so combination of regional focus, kind of these kind of like squads by sector, plus a very investment hypothesis driven infrastructure.

Mack (11:02)
That makes a lot of sense with the squad groupings, my question now since you guys are made investments in over, I think, over 20 countries now, do you see some trends that maybe could apply to one emerging market to another? And then you start categorizing and say, we saw this, this will work out. And now we can apply that here.

Julian Roeoes (11:20)
Yeah, 100%. I think there's, I think a really easy example now, but like maybe not as obvious many years ago was for example, if you look at like real time payments, right? I mean, like real time payments started in India with UPI, a lot of business models emerging, then you had Brazil with PIX, which is now like the fastest growing and the most adopted like real time payment method. And now you had kind of was a little bit less adoption like FedNow like in the US. But I think from a business model perspective, if you look at 10, 15 years ago in India, maybe five, 10 or five years ago, like in Brazil and like now in

kind of the US, think there's a lot of similarities in terms of the ideas that founders are kind of coming up with. So it's interesting to see those similar on the renewable energy and climate tech side, what we've seen or thought about maybe 10, five years ago, like in Europe, you now have also in the last couple of years, like emerging in the US. So I think there's big benefits in terms of like seeing these trends. I think what's more, even more interesting, especially today and also focusing on Latin America is sometimes the

kind of ability for markets to leapfrog trends. So for example, look at like Asia and China, like they were always the first mover in terms of like wallet payments, right? And like digital wallets. But I think it happened because credit cards weren't as established. So you had like the cash to credit card adoption was never as strong. So you leapfrog credit cards to go to wallet payments. And then you were more advanced than even like Europe and the US on like wallet payments. And I think something similar is happening now in Latin America.

Mack (12:32)
Mm-hmm.

Julian Roeoes (12:42)
which I think is quite interesting on the software and then generative or Gentic AI side, because it was always, I think on average, very difficult to sell software into Latin American customers or businesses because labor cost was relatively low on a comparable basis to other markets. So the efficiencies and the return on investment that you would provide to businesses from providing software, which still has to be steered by a human individual.

Mack (12:47)
Mm-hmm.

Julian Roeoes (13:06)
was maybe 10X in Europe and the US, but it was maybe two, three X in Latin America. So there was no willingness to adopt. And now you have a really interesting trend with like actually AI combining kind of software together with workflow automation, where now you add like a 10X, but the basis is not the software solutions that maybe AI offerings compete with in Europe and the US and other developed markets. In Latin America, you compete still with manual labor.

So I think that's where there's a lot of interesting things kind of emerging in Latin America. We've invested in a company called Niva in the KYB space, but like customer onboarding, manual document review and so on. And I think that's a really interesting example where previous software solutions weren't as good. So now you have a kind of greenfield opportunity in Latin America. When the US, there was a market five years ago for software automation in KYB. So the basis is different, but I think that's a very interesting trend at the moment.

Mack (13:54)
For you guys, you prioritize long term partnerships, as you mentioned earlier, and invest across multiple rounds. There's no, I should say, exact measure, but how do you guys start deciding what you're going to invest maybe as a follow on ticket? Is there milestones you're looking for or is it very much an art?

Julian Roeoes (14:09)
Look, I think it's obviously a combination of multiple factors. think first and foremost, the benefit that you have as an existing investor is obviously kind of an information advantage and an access advantage, right? So you one, know kind of how the businesses perform and traction wise, which outside investors might not know. You also like know how the founders have been executing, how are they hiring? If an existing investor, hopefully you spend time with the founders, with the companies and their offices, you meet the second level management team and get an understanding of the breadth.

of the talent, you see how founders deal with challenges, maybe there's a competitor that tries to out-price you, maybe there's an important customer jumping ship. So you really get to see how founders are acting in these moments of difficulty and challenges, how customer-centric they are. So there's a lot of feedback that you can get that numbers will never tell you. So I think the notion of just pure traction, I think, would be an understatement. Numbers matter, like rows, efficiency, number of customers. But I really the founder's behavior, I think, is really important for us.

So it's probably like somewhere in the middle between art and science, but very founder centric, especially if it's still, we come in pre-seed, we write larger checks at the seed, maybe the A, maybe the B, but that's kind of like our sweet spot. So I think still very, let's be close to the founders, be an entrepreneurial sparring partner, be like in the weeds. And that's kind of the best learning you can have if it's the right opportunity to double down.

Mack (15:26)
Most recently I saw Niko Energy, you guys invested in the pre-seed and then you guys followed on there. Share your thoughts on that and how you guys evaluate that opportunity with the team.

Julian Roeoes (15:35)
Yeah, think no, like, look, Niko Energy is a very interesting example. It's there's some context to to be had. So actually, like Rafa, one of the founders and I, we we did an internship at Credit Suisse together many, years ago, probably 10 years ago. Back in Germany, he then worked in the Milan office and eventually decided to go to Latin America was one of his close friends from Italy to basically build a cloud kitchens for Latin America eventually sold the company to cloud kitchens work very closely with Travis.

So we reconnected kind of as part of his kind of entrepreneurial journey and my view of like investing in Latin America, they were looking for the next challenge. So we actually spent six months together, kind of brainstorming different business models, different ideas and kind of like figuring out what a cool opportunity might be to work on. And some things that we then realized is obviously climate tech, I think is a really big opportunity in Latin America. It always was, have been kind of interesting companies popping up for many years, but I think now we were...

kind of in a market where there was actual, let's say, energy price parity. So it's kind of now affordable to kind of utilize solar because the cost of solar infrastructure goes down, energy prices go up. And if you combine that with lack of stability of the grid, which is by the way, a big problem for consumers, but even bigger problem for businesses, right? mean, imagine you're a small Coca-Cola store, you have a fridge and like the energy falls for like two hours, like you lose all your product and so on. So we like this like moment and this idea. So...

had been spending a lot of time with the team. We were early investors in some of the biggest solar models globally. So we think we have a good understanding of the business, for example, Enpar, like in Europe. So really liked the combination of having spent a lot of time with the founders, how they evaluated the opportunities, so invested like really early. And then for us, we had a very clear execution pass with them. So we kind of saw their ability to confirm consumer demand, like get the first installations done, get the operational quality in place, because you actually need installers, climb on the roof, make the installations.

Mack (17:10)
Mm-hmm.

Mm-hmm.

Julian Roeoes (17:19)
And then also pivot very nicely. I they added kind of the B2B element, like way faster than we thought, but there's a very strong market pull. So I think there were a lot of these things that we liked and the strong relationship we had built, the close dialogue that then enabled us to kind of put more money in down the road, but obviously together with a partner. So the seed round was led by QED, which we have made several investments in Latin America. I there were a lot of kind of elements that came together.

Mack (17:35)
Yeah.

Yeah.

And for you, like expanding up beyond, I should say, energy, What other areas are you seeing that are intriguing to you in Latam?

Julian Roeoes (17:49)
Yeah, think so. I think in terms of like trends in Latin America that we see, I think it was in two phases for us. mean, like phase one, which I still think believes was the era of like excess, right? I mean, everything was about access to product. So that's the iFoods and Rappis and maybe in the Nubanks early on access to financial services and the consumer and business side. We invested in Aplazo and Clara and Xepelin but it was about

accessibility to services, accessibility to products through deliveries, through digital solutions. I think now we're entering a little bit the wave of what I mentioned was this AI post-software kind of transition where it's now how to optimize, I would say, human intensive workflows and really bring operational efficiencies to businesses. And that in my mind is one of the biggest opportunity. And that extends from

The Niva example that I made in KYB and document review over sales processes, right? If you think about like SDRs, customer outbound, customer success, chatbots, if it's like in selling to small restaurants in the grocery space, if it's financial services, if it's even in healthcare, right? For doctors, the manual kind of questions like in a WhatsApp based society, that is a really big engagement channel. I think you can have major efficiency savings for doctors, but also for businesses. If you think about like payroll, payroll reviews, you think about like HRMS, so like...

human resource management systems. think everything where there's human labor involvement and human labor intensive processes across all these markets and segments is I think a really big opportunity in our mind.

Mack (19:11)
And speaking on just going off the generative AI by point, where do you and this is a question that many people are discussing and only the future will tell. Like where do you see the true value or the moat becoming, you know, and is it in the application layer? Is the infrastructure a foundational model? And especially if you want to make a further point into an emerging market.

Julian Roeoes (19:28)
Yeah. Look, I think there's definitely value in both. Right. I mean, there will need to be very strong foundational models. And the question is, like, does it need to be sitting somewhere in the cloud? Does it be on premise? Like, how will these be distributed? I mean, I think it's to be seen, but you need strong infrastructure. I think if you look at the cloud market, there might be a reference to be made that it's going to be pretty oligopolistic at some point on the infrastructure, but maybe may more diversified on the application side. So I think for us also being an early stage investor was

to some degree limited capital resources. We can't deploy $50 million on a single asset and do that multiple times. think we like the application side maybe slightly more than the foundational model. We would still do infrastructure. I think for us, it's very much back to first principles. mean, for us, it's not about building AI for the sake of AI. For us, the question should always be, what is the customer need? What is the customer pain point? And was it not possible to solve that pain point historically with traditional software solutions?

But now it's feasible to address the pain points in an economically viable way with the next generation of AI, agentic AI or AI enabled services. I think that's the biggest question for us. We're probably centered around applications, but for us it needs to be clear, serving a customer pain point. And there's a reason why historically it wasn't feasible to do so with traditional software solutions, but now it's possible to do it. And that's what I mentioned earlier, the extension in my mind into...

Latin America because software was sometimes more a three X or two X compared to really low labor costs and difficulties to like lay off labor. So the ROI wasn't as strong. While now if you have an ability in seconds to review 500 page long complex documents that are sometimes like handwritten and automate these reviews, you don't only let's say do the same with less, which is always a cost saving pitch, right? I get the same outcome with less cost. I think now you can actually do

Mack (21:08)
Mm-hmm.

Julian Roeoes (21:12)
more with the same, right? You don't necessarily need to get rid of people, but you just do like way more business output, higher quality, higher compliance, higher accuracy. And eventually you will be able to do more with less, right? So kind of like you become more efficient as an organization while generating more output. And I think that's really for us the biggest and most exciting, I would say underlying trend that then like holds true in a lot of different industries and specificities.

Mack (21:34)
You mentioned earlier this challenge with labor costs being so low. Obviously, at some point we want people to be paid more of a fair wage here and so forth. But how do you evaluate different opportunities when you're looking at an SME opportunity versus B2B in a larger enterprise and the challenge of both?

Julian Roeoes (21:48)
Yeah, look, I think sometimes...

The benefit with enterprises is that you have more pools of capital available, like larger budgets for kind of like software or like AI spend. So I think generally you can have like larger ACVs, which obviously kind of makes these customers like very interesting. I think you now also have a interesting point in time where there's actually the notion of like defensibility AI investments. mean, a lot of these companies have really big kind of innovation budgets, which is like, we need to do something. Like nobody would have said the five, 10 years ago, like,

I need to do software, so we do some software. think now people need to actually do something in AI just so we can tell the board and our shareholders that we're investing in AI. That holds particularly true, I would say, on the enterprise side. So I think that's really interesting. It obviously still comes with very lengthy processes, long sales cycles, very long implementation cycles. have multiple buyer personas whose approval you need. You have multiple integration partners at these last organizations. think enterprise, the benefit is really big contracts, really...

like very active like budgets to deploy, but on the other hand, very long and difficult sales and implementation cycles. think on the SMB side, it's faster moving if you get to the SMBs, but it's kind of more challenging. And I think it really requires founders to be like very hands-on into the weeds and in person to understand the pains and the needs of the customers, because just to like do a phone campaign for SMBs or like just send them cold emails probably doesn't work. I think a lot of time it requires really sitting with them.

kind of an explaining to them the need because if you say you can save a bit of money or make more revenue, sometimes that's not enough. The benefit is there's like significantly more. Once you get the go ahead, you integrate way faster. But then the challenge is like the retention, right? Because like sometimes in these SMBs you get in quickly, but you get also kicked out very quickly again, especially in bad days. So I think it's a trade off between stickiness and size versus like speed to deployment and kind of like, yeah, ability to retain or upsell.

Mack (23:30)
Yeah.

When you take a broader scope on Latam and the opportunities, where do you think the competitive advantages are for founders building here versus another emerging market in your opinion?

Julian Roeoes (23:49)
Yeah, would say, so there's, mean, one competitiveness versus like other emerging markets and then like also developed markets. I still believe that Latin America has a really interesting point in time right now, because I feel like there was this wave three years ago when Latam was like, quote unquote, very hot. There was like a lot of like, yeah, it was sexy. think I always heard the phrase.

Mack (23:52)
Mm-hmm.

Yeah, sexy.

Julian Roeoes (24:09)
Luckily, not as many times to us, but of tourist funds, So like funds were just coming in and like we're making investments when the market was hard because the US and Europe was so overpriced and we need to deploy somewhere. And I think that stopped to some degree. So it's very centered around like a handful of global investors and that are still active and like a few local investors. But I think there's like less capital in the market, but this accelerated wave two, three years ago, I think has formed and hardened like a lot of like really exceptional founders at the moment.

So you had a period, think phase one was kind of like the Rappies, iFoods, maybe Mercado Libres and Nubanks that had like the first generation of talent. But now in the three, four years of the past, you have a lot of founders that kind of maybe raised a lot of money and they scaled and the companies came down again. You had like the piece of product at these companies, at some founders that raised and shut down the companies. But there's so much like great talent and muscle memory that has been built in these times of maybe like overfundedness, but that came with a lot of learnings that I think now you actually have a really, really strong

opportunity in terms of like experience talent to just build great companies because I think founders learned a lot, like especially like second-time founders. And I don't think you have as much competition, right? Because I still feel like if you build AI in the US, it's so competitive because there's so much funding. If you get funded in Latin America at the moment, at the pre-seed seed stage, you're actually up to something. The markets are slower, but it also gives you validation that if you raise

Mack (25:25)
Yeah.

Julian Roeoes (25:29)
you should be in a pretty good spot because the idea is validated. A lot of people thought about it and there's not going to be 50 other people trying to do the same thing. So that's why I think building in Latin America right now and for us investing in Latin America is actually a really interesting time because you have a concentration of great talent and like the focus of capital will also provide an opportunity without as much competition that drives up customer acquisition costs, drives up cost for talent as it has been the case in the last two or three years.

Mack (25:54)
Wrapping it up here, the last few questions, and you mentioned if you're able to raise here, you have a great opportunity. As you look for founders at the pre-seed stage, specifically where product market fit is wary, maybe there's not much, what are you looking for? What key trades? You mentioned the one example of the founder, Rafael, from Niko but what other trades are you looking for?

Julian Roeoes (26:11)
Yeah. I think for me, it's always a little bit about like reflective obsession. So I think we like founders that are really kind of obsessed about the opportunities that they want to build in. And that can mean just, have a lot exceptional subject matter expertise. So maybe you worked in the space for a long time. Maybe you have a personal reason why is this space is like super important to you. Maybe you experienced a pain point, like in a very severe, severe way yourself.

or you just get really excited about the user or buyer persona that you're serving. You do a lot of research. mean, with Rafa and Edo from Niko think we even had one of our associates go down to Mexico with them and they were like doing internships with like solar installers and really trying to understand how the space is working. But this obsession, I think is like really important that you need to be really in it in terms of what you're building, because you're going to be spending a lot of time with your customers. You're going to be spending a lot of time with your business partner over the next 5, 10 years. But I think you need to be reflective because I think nobody

knows it all. And I think the most important thing in the early days of a company is learning, right? And like, even if you're the smartest person, there's still a lot of other smart people, right? There's customers, there's experts, there's like employees, right? There's founders that have tried to build something similar or building something similar. Sometimes even investors you can learn from. So just like speak to the people that you have around the table. So obsessiveness with a degree of reflection is probably how I would sum it up. There's other categories and other criteria, but I think that's really important.

Mack (27:27)
Yeah.

Okay, last two for you. Here, I mentioned learning. What's been the biggest kind of learning that you have since you've become an investor on the venture side?

Julian Roeoes (27:38)
Yeah. Look, when I started from investment banking, I always thought like, this is so scary, right? Like going into early stage venture. mean, it's like, it's so relationship based. It's like a very tight, like, knit cycle, circle of people. I mean, there's so much capital out there. How are you going to even kind of like win some of these competitive deals? What for me was kind of like a very interesting learning is if you're really excited about what you're doing,

If you're just very intellectually curious to understand businesses, and if you're actually just a good person, spend time with founders, like ask them questions. Also, if you don't invest, like give feedback, right? mean, every person in venture is building their own brand in a way. Like be founder centric, give feedback, speak with them, be intellectually curious, and like be diligent when it comes to like analyzing opportunities. Don't just hope some other fun test is a great opportunity. Talk to customers yourself, talk to experts, understand the market.

I think you can find some really good deals. mean, if I look at our Latin America portfolio, I don't speak Spanish. I spent very little time in Latin America. I think it was Mexico five times, Sao Paulo three times. We have some great investments and we invested early in a pretty good portfolio. it comes with a little bit like the hustle, but that was for me a really interesting learning. think everybody who wants to go to venture, just like hustle your way up, be intellectually curious. We interview a lot for like early investor roles. And if I asked what's an exciting company for you, what company would you want to be part of?

Mack (28:39)
pretty good portfolio.

Julian Roeoes (28:56)
You better have a really good answer because you should be excited about the opportunity. But that was for me the biggest learning. think everybody can do it. If you are excited to work with founders and challenge the status quo and build big companies.

Mack (29:07)
Okay, put you on the spot. What's been the biggest regret or mistake as an investor to this point?

Julian Roeoes (29:11)
I think the biggest regret for me personally was not starting venture earlier. I was eight years in banking and I loved every day of it, but I could have started four years earlier and I think there would have been interesting markets as well. I think there's always the handful of companies now as an investor that I should have and could have invested in that I didn't invest in. If I sum it up for you one specific point that maybe listeners will also care about, think...

In person actually matters. There's some founders, I think I didn't get into competitive rounds and I got used to the zoom, like COVID motion a little bit. Just fly to the founders, meet them. If you spend $2,000 on a travel and that's going to be the one like fund returner, it really like build personal relationships. It helps in both ways. It's great for the founders to get to know you. It's great for you to get the founder. If you actually want to invest, show the commitment. Travel before investment. Also travel to board meetings, meet your founders in person. I think this commitment is actually something that, yeah, I would have said I could have done more of earlier.

Mack (29:57)
Yeah.

Yeah, Awesome Julian.