Why we do what we do

A new series on investing in Mexico

We at Agave Lab just completed the first closing of Fund II. At the same time, many of our Fund I startups are now raising follow-on rounds with new investors. Needless to say, I’ve been speaking with a lot of people lately about our investment approach and model. In doing so, a couple of things have become painfully clear to me.

1. The way that we approach the creation and funding of startups is not “industry standard.”

2. Most people don’t understand what we do, how we do it, or why.

A Different Approach to Venture Capital

Generally, people expect that Agave Lab operates like any other early-stage venture fund – a fair assumption. However, when they look under the hood, there is usually some surprise and a fair bit of confusion. I get that. Although we in the venture capital space love to fund disruption and innovation, the actual practice of venture investing is still fairly conservative and I understand that our approach might seem a bit odd.

Newsletter Series to Explain our Model

To better explain ourselves, I’ll be writing series updates about our model, how it works, and what we’ve learned in the 3.5 years of doing it. Eventually, I’ll compile everything and publish it on Medium or someplace but I think it’s too much to digest in a single email reading. My goal with this series is to cover:

  • Current trends in venture investing (spoiler alert – there is trouble in the henhouse)
  • What are we doing about it? (one size does NOT fit all)
  • Why this approach? (trying to remove some of the risk from risk-based investing)
  • The first year (a month-by-month checklist of milestones and deliverables)
  • Cap Table gymnastics (how we make the numbers work)
  • Exit strategy – (the short game)

Of course, I’m sharing my views with a generous portion of humility. We don’t pretend to have all the answers and much of what we’ve learned has come via abject (and sometimes painful) failure. More than anything, I want to spark a dialogue among investors, entrepreneurs, and the community at large.

I am convinced that here at Agave Lab, we’re onto something interesting. Something that has real potential to transform the broader investment culture. Not only in Mexico but across the developing world. Whether you disagree or agree, I welcome your comments and especially your questions.

Up next: current trends in venture investing.

While you wait for the next installment, you can learn more from a recent podcast conversation that I had with fellow LATAM startup investor, Nathan Lustig. Check it out here.

GP, Agave Lab