1Mby1M Virtual Accelerator Investor Forum: With Laurel Touby, Managing Director at Supernode Ventures 2021 (Part 2)

Sramana Mitra: When I look back to when I started in the technology industry, it was the mid-90’s which was the beginning of the internet. There was still stuff like dial-up internet. Today, a lot of founders have not experienced a non-internet life. These are young people who are digital natives and many of them have not experienced adult life without a smartphone. It is a different demographic.

Yes, you are absolutely right that one day we are going to look back and wonder why we’re slaughtering animals. What about Latin America? Let’s talk about a story from Latin America. 

Laurel Touby: Latin America is not just one place; it’s many places and it is extremely different in each country. The dynamics, politics, and the markets themselves are extremely differentiated, so you have to be careful when you are investing overseas, especially in Latin America.

Unless you are from there, you are not going to know the dynamics. You are not going to understand it. What we have done is, we have thought hard about different markets and what is there and what is not. Everything is FinTech in Latin America. For example, any type of company that you invest in could transform itself into a FinTech company.

Sramana Mitra: They are leapfrogging FinTech and retail to e-commerce. 

Laurel Touby: We invested in one company called Habi in Columbia early on. They are doing the Open Door for Columbia and they are hoping to spread that. Open Door buys properties and fixes them up and resells them. That is what Habi started to do there.

The reason we invested in that company was because we had high confidence in the founders. For us, the most important thing is meeting really great founders that also have a great syndicate around them. If they cannot get their second or third round, then they are out, no matter how good they are.

Those are two big factors in Latin America that we are looking for. They have to be extremely connected. We favor founders who have gone to schools in the US, are taking models that they saw work in the US, and apply them to Latin America. They are also connected in Latin America, so they know that they can get second and third rounds.

I find it interesting that Latin American investors are letting these companies slip through their hands. They are not going into these companies early enough. They are waiting and they are cautious. US venture capital is able to go in there and snatch up these early companies before the local investors get to them. That is crazy to me. It is all because they are too conservative. 

Sramana Mitra: It is not crazy at all. I’ve watched the Indian ecosystem mature. It is absolutely going gangbusters. Early on, people were very afraid to go early. Early stage seed as pre-seed investments in India was difficult. It’s changed. When people don’t have a lot of experience in the ecosystem, they want to see proof points.

For proof points, you have to basically let your startups bootstrap the early stage and then you come in after there are proof points. That is how a lot of businesses got built. I talked to investors in Brazil and Argentina and they have a bit of that tendency. The companies need to be bootstrapped to a point and then they start coming in a little bit later.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Laurel Touby, Managing Director at Supernode Ventures 2021
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