Trends Watch: VC Investing in Latinx-Led Startups

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with José Luis Silva Vázquez, Co-Founder & Managing Partner, Dux Capital.

What is your outlook for VC investing in Latinx-led startups?

We see tremendous opportunity as Latins are diverse, creative, minority, and emerging leaders that are changing the conservative and typical VC model. Latinx represent 18% of the population in the world.  Latinx are the largest minority and roughly 2% of general partners (GPs) are Latinx.  We pour in $7 trillion to the GDP and $1 trillion to disposable income. In Latin America, we are 650 million people, $6 trillion in GDP, with internet and mobile penetration accounting for 70% of the GDP.

Where do you see the greatest opportunities and why?

We see the greatest opportunities in startups that tap into the U.S. and Latin American markets. Hot industries for me include insurtech, SaaS B2B, B2B marketplaces, AI, Web 3.0 and specialized fintechs.

What are the greatest challenges you face and why?

One of the biggest challenges is capital raising for our second fund as pockets of investments are going to funds that have been established for many years and are raising huge amounts of money that require capital calls to institutional limited partners (LPs). In addition, we notice founders are not able to complete their financing rounds due to a shift in the appetite for the asset class and a flight-to-quality approach. Investing in startups with strong fundamentals (sales, profits, users, customer acquisition costs, lifetime value, costs, etc.) has become the most important approach when analyzing the opportunities rather than just investing with a “FOMO” approach.

What keeps you up at night?

The things that keep me up at night include delivering returns to my investors, launching our second fund in the U.S and strengthening our team's career path.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.