Funding & Investments: Essential Tips for Entrepreneurs

Webprendedor Capital 2013 was held in Santiago, Chile this week. At the event, stand-out entrepreneurs gave their advice on raising capital.

Top names from the Chilean and Latin American ecosystem participated, including Gabriel Cid (Upgrade3D), Alfredo Osorio (BOMBACamp), Facundo Garretón (InvertirOnline.com), Boris Kraizel (Buscalibre.com), Tim Delhaes (Mon.ki), Juan de Dios Carvajal (Corfo), Mark Bonnell (Modyo.com), Michael Flaxman (Priceonomics) and Nico Orellana (Welcu and Webprendedor).

We’ve compiled a list of the best tips for Latin American entrepreneurs in search of funding:

To get funded, you need a reputation.This piece of advice was offered by Nico Orellana, creator of Webprendedor and Welcu. Orellana, who has successfully raised capital from 500 Startups and Tomorrow Ventures, spoke at PulsoConf last year.

“Scalability is hugely important in the businesses we support, exponentially growing revenues,” said Juan de Dios Carvajal of Corfo. He encouraged entrepreneurs to attack new markets and to do new things with high potential.

➜ Juan de Dios Carvajal also highlighted the importance of angel investors. He remarked, “Up to October, there were three angel investment networks in Chile. From October to March, three more emerged and are now in the financing process. Tripling access to angel investors in one year is a big advancement.”

➜ Boris Kraizel, CEO of Buscalibre, learned from his mistakes. With GiveCard, his first company, he gave away a 70% of the entity’s holding in exchange for investment. “After six months, none of the three partners were still in the company, we were fired. I got 200 thousand to leave completely,” he revealed.

➜ Kraizel shared other lessons:

Believe in the business. I believed in GiveCard, but not as much as I do in Buscalibre. Seeking investments with conviction is much easier. You have to go to sell yourself.”

“Share your business vision with your investor. With Buscalibre, we were more conservative than investors.”

– It’s important to have smart money.

“Be very realistic with your budget – ultra organized and objective.”

“Take your time. Raising capital takes time, at least six to eight months.”

“Investors look for the jockey, not the horse. In other words, the entrepreneur is important, perhaps more so than the project at hand.”

➜ Alfredo Osorio, one of the founders of Patagon and BOMBAcamp, affirmed that entrepreneurs must have a clear vision and focus, concentrating on one project and dedicating themselves to it completely.

➜ For Mark Bonnell, creator of Modyo, angel investors are fundamental because “you can converse with them.” He explained that “life is one big negotiation” and that “your ability to negotiate depends on how many people you’re negotiating with.” He also warned entrepreneurs that money received from institutions often implies many limitations as to what they can and cannot do.

➜ Gabriel Cid is the CEO of Upgrade 3D. He has received investments from Aurus as well as funding from Corfo. Cid’s company already has a presence in some key markets, including Brazil. Here are a few of his recommendations:

“Seek out allies that can boost sales. Take care of your project, but seek out sales. There are large corporations out there that you can leverage. In my case, it was the Chilean Chamber of Construction.”

– Good legal consulting is key.

“Worry about the industry you’re entering and how it’s changing.”

If you can’t convince your investors, you’ve got no business being an entrepreneur.”

“How to motivate the investor: integrate. You’ve got to invite angel investors to participate in some way. Otherwise, it’s hard to get them to invest.”

➜ Michael Flaxman, one of the co-founders of Priceonomics and a Y Combinator alum, emphasized the motivations of seed investors – being “cool,” wanting to give a hand, and, most importantly, fearing a missed opportunity.

➜ Facundo Garretón built InvertirOnline.com, a company that moved US$40 billion last year and operates in seven countries. These are his suggestions:

“The ideal project is one that takes advantage of an opportunity. It should be creative, act in attractive sector and generate value.”

– Garretón explained that he focuses on the entrepreneur at the moment of investment, zeroing in on three key elements: passion, people and persistence.

– Another fundamental element is a team with the ability to execute. He remarked, “Vision without execution is hallucination.”

– He also reminded entrepreneurs that building a business “isn’t a 100-meter dash, it’s a marathon. Being a serial entrepreneur is no good. What’s the purpose?”

– He concluded, “Try to invent a new business model.”

What are your thoughts on these pieces of advice? What applies to your startup?

Original source, featured image.

This text has been adapted and translated into English by Emily Stewart from its original Spanish publication.