David Alvo Transcript
Clint Betts
David, thank you so much for coming on the show. What an honor to have you. You're based in Chile, you've done some incredible things. You're running Impacta VC. Why don't you tell us how you got started in all of this?
David Alvo
Sure. So my long story short is that I started as a founder of a tech company. I did three companies, one failed miserably and one good success and the other still operating. Then I had the opportunity to become a VC. One of the VCs that invested in my first company was coming to Chile, they wanted to have an entrepreneur managing the fund. And so I learned everything about fundraising, being on the other side of the table.
And after finishing that fund, the investment period, for a personal thing that happened in my life I decided to do good for this world and dedicate my life to build a better world, just about that. I found that the best thing that I could do for my life is to invest and support impact-driven founders or purpose-driven founders.
So the best way to do that was to be a VC, but I figured that to be the best VC that I can be, I needed to be an impact founder first and have a successful company in the impact space. I was lucky enough to be invited to Betterfly, which is the first social unicorn in Latin America. I joined the team from day one. I also invested in that company and I led the fundraising efforts, the tech team, the product team, until we got into Series A and that was it.
And then I decided to join another company, Wheel the World, that's a company that is doing the world accessible. I also joined the team fundraising, product, tech and took the company to Series A, and after those two experiences, I was ready to launch Impacta VC, which is a seed fund to invest in Latin founders in the impact space. Yeah, that's kind of it.
Clint Betts
Yeah. You said there's something that led you to think like, 'Hey, I have to do something that leaves an impact on the world and do good in the world.' What was that?
David Alvo
Okay, so it can sound esoteric somehow, but I got into a conversation with an astrologist. He read my astrology card, I would say. He told me that in former lives I was cheap, I used my power and I did bad to a lot of people, and that in this life I came to give back. And that three years from that session I would have enough money to pay my house and that what I needed to do was to actually give that money away to causes that I cared about. And it actually happened and I remembered the astrology card when that happened. So it hit me and I decided to give it a thought and it was not hard for my heart to really give that away. It felt the right way to do it.
I got two weeks just to decide on my ikigai. Ikigai is a Japanese concept, it's a mix of what you're good at, what the world needs, what the world is willing to pay you and what you love to do. My ikigai was to actually give away, so I decided to give away all that money. I felt spiritual and after that I changed my life a hundred percent and it's all about giving. I think it's all about giving and you will receive more, so that's the way I live my life since then.
Clint Betts
That is incredible. Wow. What an experience to have gone through. Did you have any interaction or belief or general experiences with astrology prior to that?
David Alvo
No. My wife was looking, she wanted to find herself and decide what to do with her life. So I just got her an interview and it was like, I was there so, "Okay, read me the astrology card. It's not going to be a problem for me." So I was a skeptic, but everything that happened, everything that he told me happened. I did research on the guy and he's a famous astrologist, he worked with Joe Dispenza and I just believed him. Actually Joe Dispenza was the first book that I read that gave me some spiritual knowledge.
Clint Betts
Wow, this is incredible. Have you been in touch with him since?
David Alvo
Yes, after I finished at Wheel the World and I decided to do Impacta VC, I didn't tell him anything. Just, "Hey Miguel, I need you to read the astrology out again." He did it. He told me that I was going to be... He didn't know anything about this, I was going to be a channel for a lot of money, that I was going to travel all over Latin America, and that I was going to be related to doing good things for the world and philanthropy.
And that's actually my fund, and he didn't know anything about that. And he told me that I was going to write a book that is going to be famous. That still doesn't happen. I just believe in that guy and that he did the reading at his birthday, his 70th birthday in his house with people in his house. But he told me, "You gave me this date and I just decided to do it on my birthday," and he died at 70. So that's the last thing I heard about him. And yeah, I should write a book. I'm not sure about how, about what, but I should do it, I think.
Clint Betts
You haven't started writing it or anything, or thinking about what it would be about?
David Alvo
I started. I have an uncle who does a lot of this and he told me he was going to help me out and we have been emailing about what I want to read and some different stuff, but I'm not focused on that right now. I'm focused on Impacta VC for the moment.
Clint Betts
Yeah. What does Impacta mean to you and what type of companies do you look for to invest in, where you know that they're making an impact? And it's not one of these things where it's a marketing ploy or something along those lines to try to gain customers and that type of thing. How do you know when a company is really making an impact?
David Alvo
So the journey of a startup, a company, it goes different ways, you can change your business model many times. You can change your product, change your services.
So what I like to look for is the purpose of the founders. Why do they care about this? Because having a company, you have low lights many times and you'll have to hustle and surpass those moments. There's a book actually called "Grit." Angela, and I don't remember the last name. She talks a lot about the grit that you have when you have a purpose, a personal story about the company that you're building, and I think that's true.
It happened to me, it happened to the founders that I've been successful in investing. So I think that the purpose of the founders is to stick a bit longer or until the end if they have a personal story, so I look for business models related to impact, but that's not the best way to see it. On my side, I see the purpose of the founders and if they are in love with a problem that is big enough to play the VC game, I want to support those guys. I actually start supporting first and then I invest in those companies.
Clint Betts
I think the book you're talking about is Angela Duckworth's "Grit."
David Alvo
Yes.
Clint Betts
Yeah, that's an incredible book. I've actually had the chance to meet Angela, she spoke at one of my events. It's pretty incredible. It's interesting to hear you talk about her. Yeah, she's incredible. Really, really cool.
What's an example of a company that you've seen like, "Hey, I really believed in these founders. I really believed in their mission. I really believed in what they were doing, but the journey wasn't a straight line." Maybe there was some twists and turns inside of that and at the end of the day they actually ended up doing what they were doing.
It feels like when you're trying to build an impact startup, it's almost like you're making everything doubly hard on yourself. Startups are already hard and then you've got to add impact and doing good and all that type of stuff on top of it. What is that journey like for most entrepreneurs?
David Alvo
So one journey that is easy, Wheel the World, they want to make the world accessible. Actually the founder, the CEO is in a wheelchair. And so that type of companies, they just need to grow. Every time they grow, every time they're bigger, they are helping more people with disabilities to explore the world without limits. So that's the easy type of startup when they don't have to change anything, they're just doing it the right way.
But I have another company that is called Carryt, and what Carryt does is last mile delivery. The purpose of the founder is to do the last mile on zero... How do you say it in English? Zero emissions, or to offset all the emissions.
Clint Betts
Oh, yeah, yeah, carbon offset—
David Alvo
And so that's the purpose of the founder. Yeah, carbon offset. And so I met the founder for a year. I helped him build the strategy and build the team and build the fundraising strategy, and I know the purpose of the guy. He worked on another logistic company with his father and he saw all the mean things that the father did, and he only cared about money and not care about the client, and he cares a lot about the client.
But he decided that the way that he's going to actually impact the world is to take the market right away, really fast and the market is not zero emissions. So he's growing now so he can actually transform the industry from the inside and having a big portion of the market. I believe in that and he's actually now, he had a chief impact officer, and we decided to say, "Don't worry about that. You're doing a lot of stuff. You need to grow your company, don't care about that now. Just measure your impact. Measure it, don't be dedicating too much time to that and focus on that, and then we can come back and actually change the market from inside." So he has been successful.
Natura company is a listed company from Brazil, they decided to be a good company for the world. They looked for last mile logistics companies and decided to work with Carryt for the purpose of the company. Now he's closing on Series A led by Natura, so he's doing great. He's actually doing great, but it's not the impact company that he sold to me at the beginning, but we decided together that it was better to take the market and then change it from the inside.
Clint Betts
Yeah, that's the beauty of entrepreneurship. The twist and turns, the way you start and your vision for how it's all going to go is never exactly the way you planned.
David Alvo
Never.
Clint Betts
And there's all the twists and turns inside of that. I wonder what the Latin America startup and tech and business community like? You're probably talking at this point right now to a mostly American or European audience. I wonder if you could explain what's happening within Latin America and its startup and tech community?
David Alvo
So it has been growing incredibly. On 2021 was the region that had the biggest growth. There's a new wave of VCs, so there's probably like 300, 400 VCs investing in the region, from the region. What we have seen that is probably different from other places is that here we have a culture of giving back and so you see all the best entrepreneurs that have become unicorns in the last few years, they are all helping other entrepreneurs coming up. They're investing in VCs, new VCs, they're being mentors, they're doing education, they're teaching what they do.
I've been here in the ecosystem for a long time and I'm seeing better and better founders all the time. What other thing that happened is that since the venture capital industry became sexy here, the corporates, they wanted to jump in and so there's a lot of new corporate venture capital and there's a lot of new innovation departments in these big companies, and so they all are trying to work with startups. And so B2B startups now are doing great because there's a new openness from the corporate side to work with startups.
Clint Betts
What advice do you have for entrepreneurs in that region? Like, these are the types of companies you should be going after, this is the type of industry you should pursue, this is what it's going to take in order to build a successful company. What advice do you have on that front?
David Alvo
Well, obviously there's a lot of advice for new entrepreneurs, but I always say that you need to be supported by people that already did what you're about to do. Obviously there's a lot of risk when you don't know what's going to happen with your vision, and so just reach out to other founders that did the same that you want to do and you'll get beautiful insights and there's really, really a lot of openness from these successful founders to help new entrepreneurs. That's one.
The other one is about markets. Now, since everything is going down, you see that luxury, everything that is products or services to improve and do things that we never did before are not doing that great. There's a lot of startups solving more basic needs that are doing great. So if you're trying to build a startup and you have your vision and you don't know where to start with, start with something basic that really helps people get on with their lives. And then you can do amazing stuff to really do cutting-edge technologies and everything.
Anyways, we have everything from the US coming here, so you're doing great stuff and we'll receive it later. So we don't need to do that, we just need to improve the quality of life of people in the region and there's a lot of opportunities over there.
Clint Betts
In your opinion, what makes a good leader?
David Alvo
Wow. Obviously I've been a leader for a long time and I think that being empathetic was one of the things that I didn't have at the beginning and changed my way of leading. I feel like I did a really big step up in my leadership skills to be empathetic.
Obviously to have a clear vision is something that you will probably have if you're a leader, but the most important thing is to be clear with your vision, and how to communicate that vision. I think that's a really helpful skill. And what else?
Honesty, I would say. If you're a leader that is not honest, you can be a leader for a short period of time.
Clint Betts
Yeah, that's a good way to put that. There's a lot of truth in that. So what's next for you? Are you just going to keep doing the VC stuff for as long as you possibly can? Obviously maybe there's plans to write a book down the road. What are you planning on doing next?
David Alvo
Thank you for the question. Obviously Impacta VC is still growing. We're closing now, actually in two more months, I'm doing the funding, closing of this first fund. And then we're going to do fund two, fund three, fund four. I actually had better GPs than myself, people with more experience coming into Impacta to be GPs at the next fund, so that's going to continue. But what I'm building now is Go Impacta, which is actually you would say a post acceleration, maybe education.
The purpose of Go Impacta is to help the entrepreneurial ecosystem to validate themself in Latin America because the best companies from here, they end up in the US or Europe doing IPO and acquisition, and so we want the industry to be fully completed over here so we're going to do a lot of stuff for the ecosystem to help the ecosystem grow and be successful.
Actually, my business, if I want to have Impacta VC for a long period of time and be a big firm in Latin America, I need the ecosystem to be proven and validate. And so my business actually is actually the ecosystem, and so that's what I'm doing. I'm working with the government, corporates, angel investors, successful founders, other VCs. I have a platform where I help other VCs to see everything that I see in my DFO, they see too. So I'm building the ecosystem and I think that's going to be a big part of my efforts in the coming years. And obviously, to write a book.
Clint Betts
Yeah. Yeah, you're definitely writing a book. I feel like you have no choice there at this point, given everything else that's been said has come true. What's it like working with the government down there?
David Alvo
In Chile, we have the perfect best example in Latin America. They put a lot of money into VCs, into founders. We have a program where we bring founders from abroad to develop their startups in Chile. Now we have a program to bring VCs from abroad, and they're actually tripling your money. If you bring 10 millions to invest in Chile, they will give you 30 million extra and you'll be able to invest 40 and have bigger management fees and everything.
So the way they do it is to be really flexible in terms of designing the different programs for different types of actors in this ecosystem. But obviously it is money from the taxes from GMs, and so you need to verify that you spend your money as you said you were going to spend. And so there's a lot of work, of paperwork and due diligence being done by them, but that's a trade-off, right?
Clint Betts
Yeah. Interesting. I hear what you're saying there. Finally, David, and again, I can't thank you enough for coming on and sharing your experience and your wisdom and everything you've done in this world and continue to do. We ask the same question at the end of every interview for ceo.com, because we believe that the chances that are given are just as important and impactful as the chances that we take on ourselves. I wonder if there's an example of someone who gave you a chance to get you to where you are today. I know you've already mentioned the, what is it called? The astrologist?
David Alvo
The astrologist. Miguel Picelli. That's the name, Miguel Picelli. I would say the other one is Alvaro Silberstein, which is the CEO of Wheel the World. We played together tennis when we were young, and then he had an accident. He's now in a wheelchair, and he invited me to be part of his company. He opened his company for me and he taught me that in his company, everybody's doing the world accessible.
And so you ask the marketer, "Hey, what are you doing?" "Making the world accessible." And, "What about you, the finance guy? What are you doing right now?" "I'm making the world accessible." He taught me that the best way that you can actually lead and share the purpose of you personally with your company.
Clint Betts
That's incredible. David, thank you so much for coming on. Really appreciate it.
David Alvo
Clint, it is a pleasure to be here. Thank you for the invitation and obviously happy to help. If you think there's something I can help you with from Chile, from Latin America, if you come out here, obviously let me know. I will be happy to help.
Clint Betts
Of course. Yeah, let's stay in touch and even have you back on as things get going.
Thank you so much.
David Alvo
Thank you, Clint.