MIF VC Meeting
Marcus Regueira
Buenos Aires – October, 2005
about us ... Founded 1999, Brazil
US$48 million under management
18 Portfolio Companies in 3 Brazilian cities
3 Exits (1999, 2002 and 2005)
24 Associates – Senior Associates include native speakers of Portuguese, English, Italian, Spanish and German
Senior Associates hold advanced degrees (PhD, JD, LLM & MBA) from Carnegie Mellon, INSEAD, Northwestern, Stanford, UCLA, Wharton, and from top Brazilian schools
14 pro-active Private Investors, successfull entrepreneurs themselves
Our DNA and upbringing for M&A and Entrepreneurial Partnerships
Guilherme Emrich & Marcus Regueira, Senior Partners
FundoTec I & II - Venture Capital Funds:
FundoTec IIR$ 60,000,000
MANAGED BY: FIR Capital Partners
CLOSE: December 2005
LEAD INVESTORS:
FINEP
PETROS (PETROBRAS)
FundoTec IR$ 30,000,000
MANAGED BY: FIR Capital Partners
CLOSED: June 2001
LEAD INVESTORS:
Sumitomo Corporation
Inter-American Development BankIADB
Portfolio:
innova
Alvos
Information Technology Biotechnology
Our Model = Tailored Involvement … becauseDistinct Investments have Distinct Needs.
Senior Associates:Marketing & Sales
Human CapitalFinancial / Tax / Fiscal
General CounselCorporate Controller
TechnologyThe Periscope
R&D Partners
Universities,Excellence Centers
CorporateManagement
Training
PAEX-Tec,Dom Cabral
Company 1 Company 2 Company ... n
The Periscope, 24x7 scanning for:
• Co-Investors
• Strategic Partners
• Competition, incl. as Potential Business Partners
• Consolidation Plays
• Technology & Market Trends, in Brazil & Abroad
General Profile Prior to Investment:
The Company
Strategy
Management Process
Structure
Generally Undefined
Inadequate:
Product FormatCommercial PlanGoals & ObjectivesFinancial Metrics Dissonant Financial and Commercial Plans
Inadequate:
Processes to support StrategyCost Benefit AnalysisCommunication between Management and Board / Shareholders
Inadequate:
CapitalManagementManagersFinancial ControlsAccountingMarket IntelligenceCorporate Governance Does Pay.
Absolutely Essential.
Our Corporate Governance Model:
The Company
PEOPLE
PROCESS
STRUCTURE
Align Vision and Values and Interests = Investors / Board / Managers
Hands-on Board
PAEX tec
Hire Controller and (at times) CEO
Controller: Strong Financial Background
CEO: Strong Management Background and (specially) Marketing&Sales
Efficient Communication = Mgmt / Board / Sharehldrs
Vision and Values Transparent to the Organization
ConsensusDriven Decision Making
GAAP and Independent Auditors
Proprietary Management Reporting System (SAE)
Formal Discipline Investor-Investee x Teamwork
Immediately Prior to Investing:
Adequate the Structure to the Avaliable Investment
Adequate the Structure to the Strategy
THE FORMALITIES OF THEINVESTOR-INVESTEE RELATIONSHIP
MUST BE ADHERED TO.
AT THE SAME TIME, THE KIND OFOPEN BUSINESS ENVIRONMENT
THAT IS CONDUCIVE TO INNOVATIONMUST EXIST.
Our Proprietary Reporting System (SAE):
TheCompany
FIR Capital Analyst
Fund Investors
FIR Capital Controller
WEB BASED
MANAGEMENT REPORTING (SAE)
& INVESTOR RELATIONS
Successful Exits:
Acquired byNovoNordisk
2002
Acquired by UOLUniverso Online
1999
Acquired byGoogle2005
Successful Exits Require:
– a Flexible Strategy, Designed Prior to Entry,
– Rigorous Execution from day one.
In addition,
– Entrepreneurs Focused on the Business in order to secure
• Attractive Local Market Share and/or
• World Class Technology
– Our Analysis of our investment from Acquirer’s Viewpoint,
– and, fundamentally, Adequate Corporate Governance.
The Akwan Case:
FOUNDERS Stanford Students UFMG Professors
OPERATIONAL MODEL
Search Engine
Computer Clusters
Search Engine
Computer Clusters
FOUNDED 1998 2000
INVESTMENTS Angels + VCsFIR Capital was
Angel & VC
ENTERPRISE VALUE US$ Billions US$ Millions
REVENUE MODEL Innovative Media Company Web & Corporate SearchEngine
THE FUTURE “Perennially re-inventing itself ” Google R&D Center
in Latin America
Akwan Investment Cycle:
Stock-options issued
to engineers
2000 2003 2005
Cumulative Cashflow
2001
FIR CapitalProduct Creation
Liquidity Event
Sales
“It wasn’t a question of choosing Brazil. We chose Akwan that
happened to be in Brazil.”Alan Eustace
VP de Engineering, Google(Exame/2005)
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