November 3, 2014
Self-proclaimed start-up junkie, investor, and serial entrepreneur Esteban Reyes has founded seven successful companies in 14 years. This is exceptional, given the ups and downs of starting your own company. He first co-founded Verification Bureau at age 19. It was a mortgage fraud prevention technology business that was sold to Lender Processing Services in the summer of 2009.
He currently serve as Managing Partner and CEO for VSI Nearshore outsourcing, a software-development company with offices across Latin America and the United States. They help U.S. companies optimize their operations and reduce their IT costs.
We reached out to Reyes and picked his brain on his role as an investor:
1. What do you look for when making the decision to invest? What is your process like?
I’m an entrepreneur, so more than an investor I see myself as a co-founder with an expiration date. I invest my own money in companies that I can add value to. I like to get very involved at various levels, and only work with one or two companies at a time. I’m currently actively looking for opportunities in the financial services, education, and consumer products and services spaces.
As a first filter I look for five things:
1) Team with track record (not only in building companies or in a particular domain, but also in working together. As part of that I look at how I can add value to the team)
2) Exponential innovation (I avoid “me too”, or marginal improvement plays)
3) Clear path to distribution (I’m turned off when people claim a multi $Bn addressable market and can’t articulate the path to capture it)
4) Defensible value proposition
5) Competitive landscape (I like aiming for moon shots).
2. What is typically your bite size? Does this change depending on where the company is based?
Every company is different. When I meet a potential cofounder I don’t have a set number in mind. I look at each opportunity independently, looking for what’s best for the company.
3. When was the last time you made an investment?
Earlier this year.
4. In your opinion, what makes a startup team a high-performance one?
A team that delivers results while having to constantly adapt to change, and can remain focused on the big picture.
5. What are some interesting trends that you are finding interesting in the tech industry in LatAm?
I think entrepreneurs are starting to realize that there are opportunities in the region beyond “copycats” of successful US based companies. Local problems need local solutions.
6. What is the latest tech gadget you’ve seen out in the market that you are excited about?
Matternet: More than a gadget is the democratization of small object shipping. I think these guys will have a serious impact in the way we think about shipping stuff, just like Uber changed the way we think about transportation.
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