92-75. Ivan Montoya

SPEAKERS

Ivan Montoya, Will Bachman

Will Bachman  00:01

Hello, and welcome to the 90 T report conversations with members of the Harvard and Radcliffe class of 1992. I’m your host, will Bachman. And I’m excited to be here today with Ivan Montoya. Ivan, welcome to the show. Hey, well, thanks. Thanks for having me. So Ivan, tell me about your journey since graduating from Harvard.

Ivan Montoya  00:24

Yeah, so I’ll hit the highlights and then we can go deeper wherever you prefer. So I think probably one thing is, I was dating a woman when I was at Harvard, and we, we got married, and we had four kids. So we got married in 1995. So our eldest Sophia is 27. And our youngest, Julian is 19. And he has just left the house. So we’re beginning empty nester phase of life, which is very exciting. So So I’d say that’s a big thing. When I graduated, kind of second thing is, eventually we made our way out to California, came out to Stanford for business school in 1995, and stayed. So I’ve been living in California for many years. And professionally, I ended up I graduated, worked in McKinsey in the Houston office, did projects with that part of McKinsey worked in Mexico City on a Project Venture made my way up to New York for a third year. But once I came out to the Bay Area, 95, it was literally the beginning of the internet, I think Netscape went public the week before I started business school or the month before. So I just ended up doing stuff in technology of different types and startups. We go into that more later, but a lot of the good, the bad and the ugly of the startup world. But about four years ago, I started angel investing in companies in Latin America, and then that kind of took on a life of its own. And that’s what I’m up to these days. I’m an investor in early stage Latin American startups. And that’s, I guess, those are the very broad brushes of what I’ve done since college,

Will Bachman  02:22

a lot of ground to cover, well, maybe later, we’ll loop back to some of the early ones. But let’s dive in a bit to your most recent, you know, endeavors of angel investing, talk to us about countries, companies, you know, how you generate, you know, incoming, you know, opportunities to talk to us about what you’re doing.

Ivan Montoya  02:50

Yeah, and, you know, I’ll set a little bit of context, because this does connect to to Harvard. So I was born in Colombia, and we moved to the US when I was very young. My parents were members of large families. My mom was one of 11, my dad was the youngest of five. And so you know, we had tons and tons of family and Columbia. So we’d always go back over the summers, over the winter holidays. And so I did that all the way up until the summer of 89. So that was the, you know, after finishing first year at Harvard, I was there in August of 1989, the day that the leading presidential candidate was shot. And as luck would have it, our trip, leaving Bogota was the next day. And so I don’t know how many, you know, if you’ve watched Narcos, season one, but they do an incredible job of capturing what that period of time was like, and particularly this event. And I ended up not coming back to Colombia for 24 years after that, wow. You know, the situation just super violent. And I remember, I got back, and, of course, my parents are doctors and the eldest immigrant, right, I should have been the doctor. And there was a lot of pressure for me to be a doctor. So I told my mom, I would finish pre med. But I wanted to learn something that maybe somewhere down the road, I can help Colombia. And so I ended up focusing on development economics, or doing economics but with a focus on development economics. When I was at Harvard, I did my thesis on Colombia. I remember meeting, a pivotal class that I took when I was in Harvard was Professor Jorge Dominguez taught a class on the Cuban Revolution. And it’s by far, you know, I still remember that class and, and a lot of the things that that ideas that came out of that, and eventually, you know, when I went and worked in McKinsey, I got a project in Mexico City is a man and worked for six months there and but the situation even in Mexico City in the early 90s, was starting to get violent. So you would have kidnappings and, and so I just sort of thought at that point that my window on to do something in Latin America might have closed. And then I eventually go back to Colombia for the first time in 24 years in 2013, to visit a classmate of mine from business school, who was a senator and I remember thinking things were better, but not the way I remembered. Then I went back in 2018, when my eldest daughter graduated college, so, you know, the six of us went down there, my brother and his family, we went to me in Carta, Hannah Botha, and it was just like this massive inflection in my mind that happened. And just the energy level, the positivity, especially visiting Medellin was, was quite a an experience for me. So when I got back, this connects back to our Harvard class. I’ve remained very good friends with Alex and Stebbins, and Alex was the CFO of a company called Atlassian. Now he’s a venture partner to excel. And he, I call him up and he’s Cuban American, I call him up and I said, Hey, Alex, I don’t know what China was like in the year 2000. But I think the next 20 years in Latin America can be just as important in technology we need to get involved in so Alex gets a cold LinkedIn email message from a founder in Colombia. He says, You’re Colombian, you need to go talk to human, which is what most folks in Latin America call me. And, yeah, they came out to Menlo Park, this is before the pandemic, we met at a coffee shop called the coffee bar, I really liked what they were doing, put in a 25k check, told them, I would help them raise capital, and eventually help them raise $2 million. And that was kind of the beginning. And I can go much deeper, you know, into the rest of the story. But but that eventually led to 40 investments in Latin America, and getting super involved in the ecosystem with all the accelerators working with other investors, of the various startup communities in Latin America. And it’s been an amazing ride. But, but that’s basically the origin story of how I got involved.

Will Bachman  07:26

I love that round trip of how you laughed and wanted to do something. And now Now you’re doing it. And the region, you know, I’m quite interested in the region myself, my wife is Peruvian. And so we traveled to Latin America, typically every year, and I’m looking to hear some of these stories. We’ve been to Colombia a couple of times, and this is not legal advice. But Colombia is a great place to visit, we had a fantastic day layover in Bogota, we’ve been to Kentucky and a few times. And it’s a fantastic place to travel. So tell us, you know, I’d love to hear a bit more overview about the startup tech scene across Latin America. What are the hubs? And what kind of companies have you invested in just tell us some of the stories?

Ivan Montoya  08:14

Yeah, so. So I primarily focus on three areas, which is FinTech or companies trying to innovate around the financial system, you know, either whether it’s helping give businesses or consumers access to credit, or improving the way payments get done. So just everything around innovating around the financial system. The second area is property tech, or prop tech. So this is all about trying to remove friction, and make it easier for people to buy and sell homes or businesses to to get commercial real estate. Lots and lots of friction there. Lots of opportunities to help. And then the third area is supply chain and mobility. So my first angel investment was a company called PCAP, which does ride hailing on motorcycles. So they’re similar in model to a couple of companies in Southeast Asia. One called Go Jek one called grab, where they basically started with ride hailing on motorcycles, which I remember thinking like, that’s unbelievable. Never do that. Right. But but we can talk more about that later. But, but one of the things I learned through pickup was, you know, traffic is, is pretty horrific. In Latin America, I forget something like four out of the 10 worst traffic. Cities are in Latin America. There’s all this trade that’s going on. A lot of it is very archaic. So every, every aspect of supply chain and mobility has tons of friction. And so anyway, so those are the three areas that I focus on, and I mostly invest in envy. very early stage companies, so maybe precede seed somewhere around there. Usually companies that have launched and maybe have a few months of data, maybe if it’s a bootstrap company, maybe they have a few years of data. But, but I invest it at those stages. And yeah, I mostly invest in Spanish speaking Latin America. So Brazil is a very different ecosystem, different players and so on. So out of the 40 investments, I think I’ve done 12 In Colombia, 13, in Mexico to improve to in Bolivia to in Chile. And back to a couple of Ecuadorian founders. So for sure, the hotbed in Spanish speaking Latin is Mexico City, no doubt, or Mexico as a whole. But Mexico City is sort of the Mecca. The other Mecca is Sao Paulo, right. But in between that, I would say, Bogota, Colombia, sort of like the, I refer to it as the Mountain View of the tech scene. So it’s, it’s like this smaller community, but filled with entrepreneurs and a very strong entrepreneurial spirit. So a lot of the I enjoyed backing companies in Colombia, because those founders are very ambitious and scrappy, and, and so on.

Will Bachman  11:18

Tell us a bit about the kind of whole accelerator scene. I mean, most of us have probably at least heard of Y Combinator in the US and TechStars. But tell us about the different accelerators and and you mentioned Bogota, Mexico City, Sao Paulo. We also love to hear about kind of the other like Lima Santiago, Chile.

Ivan Montoya  11:39

Yeah. Yeah. So I would say, you know, getting into the kind of the specifics of the Latin American, Texas, kind of landscape, Y Combinator has been a huge impact. And in fact, I think without Y Combinator, I’m not able to do what I do. Because I would joke with people, you know, if I had a call with an entrepreneur in 2015, they’d be saying, you know, first of all, it would be very difficult because nobody’s using video conferencing back then. But but if I were to have a video call with them, they’d be saying, Who the heck is this gringo from California, right. But after several very prominent Latin American startups went through Y Combinator and had a lot of success, most notably a company called Rapi, which is essentially the DoorDash of Latin America. And so after Rapi, success and several others, essentially all of the are the majority, I would say, of startups in Latin America want to get into yc. And, and so then the other factor is, you know, if you’re from Silicon Valley now, instead of it being the screen go from Menlo Park, it’s like, oh, you’re Colombian in Menlo Park, you know, what’s your network like, and whatever. Right. So now, all of a sudden, I think founders were more, you know, when I would have conversations with founders, like the engagement level was super high. And, you know, Y Combinator, I live in the valley. I live in a place called Portola Valley, which is right behind Stanford. I’m very involved with with all the Latin American companies that go through yc. So I think last winter batch, there were maybe 10 companies from Latin America. And that was seven of them directly in person here. And so yeah, so that’s a very big one. But there are a couple other ones. There’s one that started in Chile called Platon this ventures. So I’ve been to all their demo days, I’m very close to the partners who run that they’re they cover all of Latin America, but they’re originally from Chile. And then there’s other startup communities in the region. So one is called latitude, which is a very prominent one. I’m a mentor there TechStars. Miami is run by a Colombian guy. And I’m a mentor in TechStars. Miami, so I’m spending more and more time down there. And a lot of Latin American founders will go to that. Tech Stars. But yeah, so hopefully, I don’t know if that answered your question. But it gives you a sense of, of at least the the communities and the accelerators in the region.

Will Bachman  14:25

Now within Prop Tech, I have heard and I forget the economist, but I remember the takeaway, which is that in some countries, where they don’t have good documentation of, you know, property rights, it can be difficult for you know, sort of the, the bottom billion to you know, get a loan, right because they can squat but then they can’t assert their land rights. They can’t treat that as assets they can’t get alone. Talk to me about what some of the you know, if any of the companies that you’re working with are sort of addressing those sorts of issues, what other sorts of Prop tech title type issues? Have you seen them working on across Latin America?

Ivan Montoya  15:09

Yeah, so this is where we’ll it’ll take us to Peru on this journey. So I oftentimes think that, you know, us, well, I shouldn’t generalize, but me living in the US, right. And in particular, being here in the heart of wherever a lot of technology stuff happens. When when I work with founders, or folks in Latin America, it’s often times it feels like I see the future, I’m in the future. And I’m big, able to go back in time, and help people, you know, accelerate and solve problems, at least with some ideas of what what might come in the future, right. So let’s just talk about property, prop tech, or the whole real estate process in Latin America. So one thing that you will hear about a lot is that there is no equivalent to the MLS system, which I think it’s the Multiple Listing system, which I think started in the US, I don’t know, 100 years ago, or however, a long, long time ago, but it was way for brokers and real estate agents to share that they’re listing a property, right. And I believe in, I may be totally wrong on this. But my impression is, it’s like an Industry Association, and everybody pays a fee, and they get access to this data, or that’s the way at least it originally started. And so that makes it you know, now there’s information in the marketplace about what houses are available, what the inventory looks like, what the pricing is, it enables the marketplace to happen. Well, in Latin America, there’s none of this. And, you know, there, it’s starting to get there. But there was no MLS in there. And so the data is super unclear and opaque. Sometimes the data is inaccurate. So if you are looking to rent a place in Mexico City, you know, I was told as recently as maybe even now, but as recently as a few years ago, you didn’t know exactly what was for sale, you didn’t know exactly what was the price, you might see pricing all over the map. Right? You don’t know if it’s available, all that stuff, right? So I’ve I’ve invested in companies that essentially are trying to fix the data problem. And so there’s a company in Peru called Go home, which I invested in December of 2021, they ended up coming to yc. And they’re essentially trying to create the Zillow of Latin America, right? You have other things with the the real estate system. So even more mundane things, right? So I think you raise a really good point. Getting access to credit is super hard. I think the number of people who use who have mortgages in Latin America relative to the US is like, I’m gonna get this metric wrong. But maybe 70% of people in the US who own home use a mortgage in Latin America, it’s like 20% or less. So I’ve invested in mortgage companies, both in Brazil, sorry, in Mexico, and Colombia, trying to create what’s called the Rocket Mortgage, a Latin American, like trying to streamline mortgage origination and all that. And then within that, because there’s credit scoring, and a lot of people are in the informal, what they call the informal economy. In other words, they don’t they don’t pay me maybe they don’t have bank accounts, maybe they don’t pay taxes, right. So in the US, you’ve got credit bureaus, and all of this, which more or less cover a big percentage of the population. In Latin America, there wasn’t any of that, right. And so you get these weird things where, for example, to rent an apartment, you have to get a third party, not a family member, but somebody else to essentially vouch for you. And like, I don’t know, if they have to sign some documents or whatever. But you know, you can imagine an expat moving to Mexico City. Oh, my God, how do I get how do I rent an apartment, right? I’ve got to go find somebody to do this. So I’ve got companies that are trying to innovate and solve that problem, right. So there’s just tons and tons of friction at all stages of this and for sure, to get to your question. It’s very inaccessible for people, you know, who are not in the top. Let’s call it 10% of society.

Will Bachman  19:30

Talk to us about some of the things that your FINDEX that you’ve found, funded, are working on, you know, some things that we might not think about in the US in terms of payments and other parts of the financial infrastructure that they are working to create dinner.

Ivan Montoya  19:47

Sure, yeah. So I invested in a company called Jeeves back in 2020. Before they launched, it is a company that essentially competes with American Express So there was a period of time, maybe four or five years ago, where a couple of startups in the US got launched to essentially compete with the corporate card segment in the US, so there’s a very famous company called Umbrex, and other one called ramp. Well, Jeeves is essentially that for Latin America. So business to business, credit card, spending card, and so on. And it’s super interesting because a company like American Express every had how old they are, but they’re, you know, they’ve been around a long, long time, they’ve essentially had a monopoly in that corporate card environment. And anyway, so that’s one of them. So can let’s call it b2b, fintech. And that company’s done very well. My most recent investment was a Chilean company that is similar to one in the US called built rewards, where they allow you to pay your rent, and your utilities with a credit card to earn rewards and improve your credit score, right, which is a huge, huge deal, as we talked about earlier, with people not having access as much access to the formal credit system, being able to you take your biggest expense, and actually get something from it, instead of like, just sending it to the landlord. And so they launched in Santiago, they’re going to be heading to Mexico, so I invested in them. I’m just thinking of another fun example. Well, another one is another b2b. So again, in the credit space, there’s a lot of basically access to credit is very limited in Latin America, both on the b2b and b2c side. And I’m probably one of the most enjoyable investments I’ve ever done. I back to 20 year old founder who’d never gone to college, he launched a company called one car now, which essentially allows, let’s say, drivers on on like Uber or DD or Cabify. In Mexico, get access to a brand new car, so it’s almost like a rent on. So they pay out on a 500 $600 a month to get a brand new car, when current manages the insurance and maintenance. And at the end of three years, the driver can either buy it or decide they don’t want it right. And and this is basically a car lending company, right? Because these folks are making good incomes. Many of them make like $25,000 or more a year, as drivers for Uber, let’s say or DD, which is an incredible amount. In Mexico, I forget it maybe five acts like GDP per capita. So these are, these are basically middle class people in Mexico that cannot get access to a loan to buy a car, like Absolutely cannot. And so this company launched in March of 2022. For those of you who are familiar with startups, they’ve already reached 4 million in annual recurring revenue. They’re cashflow positive. I mean, it’s just been an amazing experience. And, you know, backing a founder who probably couldn’t get a meaning from anybody. But the founders incredible, right?

Will Bachman  23:11

And how did he get your sense?

Ivan Montoya  23:12

Well, so I, my model is a little bit different. And I don’t know, I’ve been told by founders that my approach is, is different than many investors in Latin America. So I would say this is true in the US, but I think it’s even more true in Latin America. There is a ton of bias, and who gets access? Or who gets to meet with venture capitalists or with even angels, right? So the, I would say, the traditional profile in Latin America, somebody went to school in the US, they go back to their home country, they work at a prominent firm, it could be they worked at a consulting firm McKinsey, Bain BCG, or they worked at a big one of the early leaders in the tech ecosystem, like Rapi, or new bank, right? And those are the folks who get get meetings very often not all the time. Very often those folks are also come from very wealthy families, right? So it’s just it’s just a slice of a slice of a slice, get access to people who have capital, and kind of growing up professionally in the Bay Area. It’s a very different scene, right? There’s definitely some of that bias for sure. But like I shared, I don’t know if I shared this, but personally, I’ve worked at a company I was employed 20 at a company where the founder was 24 years old. He ends up selling the company for a billion dollars. Take some starts. Another one takes it public, right? So in the valley, there’s much more of a sub perfect but there’s more of a meritocratic kind of spirit. Right, it’s like, you know, show me a founder who’s doing great work or they’ve got traction, I don’t care if that founder is brown, brown, black, white, yellow, whatever doesn’t matter. Like, you know, if they’re an engineer who, who went to school in India or whatever, it doesn’t really matter, like, are they? Are they getting stuff done? Are they doing good work. And so I meet, I take a lot of first meetings, I take hundreds and hundreds of first meetings, and I take meetings that I think other people would never take that are cold. I don’t depend on referrals. Referrals are great, but my primary referrals are from other founders, right. And so I get these meetings, and, you know, if the metrics are off the charts, or if they’re doing something that’s very interesting, that I think could be successful, then I immediately start to help them. And I typically I joke, I have a freemium product. So I’ll work with these founders for anywhere from one month to three months before I make an investment. And that allows them to learn more about me, I get to learn more about them. But most importantly, for me, I get to see how they perform how they act. But also I get to learn more, right? And then usually, at the end of it, it’s a very strong relationship, and whether it’s not a fit, no problem, kind of no harm, no foul, I’ve helped them. And if there is a fit, it’s great. I’ve got way more conviction and and better certainty. So my done this founder, he was reaching out to me on LinkedIn, many times, it was super persistent. I had a hypothesis that there there would be space, more space for, for players in the car financing space in Latin America. So I had kind of a thesis in his area. And so I took the meeting. And as we were going through the meeting, I just started to feel more and more that this founder did not sound like a 20 year old to me. He reminded me a lot of this founder that I had worked with, he was so successful, and was so young. And so I told him, I said, Hey, you know, you’re super early, super young. But I liked what you’re doing, why don’t we meet every Friday for the next three months, and let’s see where we’re at. And he just blew me away, just executed incredibly well. And you know, by the time we get to March, I felt I was the lucky one to have met him. So anyway, I don’t know if that answers your question. But hopefully it gives you a sense of how I work.

Will Bachman  27:25

I love this. Tell me, what, how many times did he reach out that you can recall? And what was it that he said that? You know, got you to find the over the tipping point.

Ivan Montoya  27:40

I think he probably reached out, I don’t know, maybe four or five times over about a month and pretty listen to

Will Bachman  27:46

is pleasantly persistent.

Ivan Montoya  27:49

Yeah. But and I engage with a lot of folks on LinkedIn but But oftentimes, I’d say they’re in a sector that I don’t go in or a usually don’t invest pre lunch, which is probably the nature of my interaction with my own was like, Hey, I usually go before lunch and whatever, but but it was in an area that I was very interested in. And so, and it was FinTech, it was all that so I’m like, Screw it. Let me go ahead and meet with this guy. Let’s see what he’s got. Yeah, see if he’s doing something interesting. And thank God I did that. Yeah.

Will Bachman  28:24

And so are how are people knowing to reach out to you? Do you have you kind of built broad enough awareness across the founder communities that people are telling others about you? Or do you do much, you know, visibility building through, you know, publishing or commenting on Twitter? Like, how are you? How are you generating that awareness?

Ivan Montoya  28:50

So I would say there’s kind of two things. And then one of these will cut back to some Harvard connections. One is, one is, you know, like, I’ve been doing this now for four and a half years, right. So at some point, you meet so many people, I backed 40 founders. So you know, I think between the founders I backed, and the founders I’ve helped, you’re talking about hundreds of founders that are very active in Colombia, and Mexico and Peru and Bolivia, everywhere. And so a lot of that and you do, I don’t know, you personally do this, but pretty much everybody in Latin America uses WhatsApp. Right. And so you, you get all these WhatsApp connections. And I just get a lot a lot of referrals from founders, right, which is hopefully the good thing, right? Because they can vouch for when I’m like as an investor and how I help and all of that. Like I mentioned before, I’m super involved in in the startup community. So I’m a mentoring in these big groups, right. So I get referrals from that there’s my most recent investment And in this chilling company meet pagos, I found out that the founder reached out to me, because he saw me on a webinar, where I was being interviewed with this group called latitude, which talks about how I approach angel investing and how I’m very focused on supporting the founders and, you know, open to founders of all backgrounds. And he’s like, Yeah, we need that guy, you know, we need to reach it. So then he reaches out to Paula, who runs this firm called plantlets ventures accelerator, Paula knows me on WhatsApp, because I’ve helped her. And she’s like, Hey, they didn’t go through our program. But I’ve heard really good things about him, right. So that’s a classic kind of way that people reach out to me. I also look, I invest very early, and my cheque sizes are small these days. So I don’t really compete with anybody. And in fact, my job for the founders is to connect them with other investors. So like, I joke that I want to be the best lead gen for the bigger funds and the funds later downstream. So I work with all of the investors in the region. And so I get leads from them if they run into companies that are too early for them, right, or they have a huge fund. And it doesn’t make sense for them to lead this round. But hey, they’d love to see what I think of them. And then about a year ago, maybe not even a year ago, maybe, maybe November ish, October ish of last year, I started posting selfies on LinkedIn, with founders that I backed or other people that I’ve worked with, because I started traveling more, right, the pandemic was sort of semi behind us, people, we’re now starting to have events. So I was in New York, for Latin American VC Association event. And they’re all these folks that I’ve worked with on Zoom for many years. And we’re finally meeting in person. So I decided to post a selfie. And I did really well. And then I posted another selfie, and another selfies and I’m like, I think I’m the selfie guy in the Latin American tech community. And it does really well. And and because I think it makes me more human, right. And whenever I write a post, it’s almost it’s 90%, about the person I’m with. So oftentimes, these are founders who are very young or whatever. And I really highlight them or it could be other investors. And the funniest thing was going back to my classmate Alex system is. So Alex and I’m really close to Tim wittmeyer. And tree Felice. I had a cat, an Instagram account for one of my cats. And I can tell the whole story about that later, we can go deeper, but the but the net of it was, I had a bet with my youngest daughter. This is back when I first learned of Instagram that she said, like, oh, you know, there’s no way you can get to 1000 followers for Coco. And I said, Okay, I bet her that if I win, she has to run this hill at Stanford called the dish, which is very steep, and she’s like, Well, maybe you can get to 1000. So the number kept going up till we got to 10,000. Like, there’s no way you can get to 10,000. And there was time constraint, I had to do it between March, and like the end of May, and I couldn’t spend money or whatever. And so I ended up getting to 10,000. And that’s a whole story in and of itself. But one of the things I learned was whenever I took a picture of the cat, if Coco with one of the kids or with somebody that performed better, and so I remember, I started posting these selfies on LinkedIn. And Alex sends me a text he’s like, are you doing Coco, the Bombay cat on LinkedIn. And like, sure enough, so anyway, so see, if anybody goes to my LinkedIn profile, you will see an array of selfies. And so that’s been invaluable. Because especially for founders in Latin America, I think they find LinkedIn a kind of a safer place. I’m really not sure how effective Twitter is, in Latin America, at least for the founder community. And, but LinkedIn is great. And so it’s, again, that’s another source of inbound and, and also a, it helps me when I do app, and when I reach out to founders, you know, I get 100% conversion to meeting. So LinkedIn has been great.

Will Bachman  34:16

You mentioned that you help founders with your freemium model. Tell us a little bit about what are the types of help that you would provide? What are the typical, you know, things that you hear problems that you hear? What’s kind of the advice is it helping them connect them to people? Is it that you’ve, you know, have some expertise in particular areas?

Ivan Montoya  34:41

Sure. So, because I focus on three areas in particular at this point, I’ve I have seen probably 1000 pitch decks and all three of the areas I focus on, and I’m literally met with hundreds in all three areas, right. So I have an approach Which, where, you know, usually these introductory meetings are 30 minutes. And my goal is in those first 30 minutes to give them something that is useful. And so usually we will, you know, I listen first 20 minutes, I say very little, I just listened to them pitch or describe their model, however they want to do it. And then we engage in 10 to 20 minutes of what I would call professional brainstorming. And where I’m very direct, right, I give them feedback, but it’s in a very constructive way. It’s not like, hey, I really hate this and this about your business, it’s more like, yeah, as an investor, be really helpful if I could under better understand x, right? If you have a page in your deck that that showed, let’s say it’s a b2b company, a case study, like before, your solution, this is what the customer had to do. But afterwards, here’s what you did, and blah, blah, blah, right. And so, or it could be other things, right. And so I find that initial meeting for me, it’s like, performance I need to be on I need to really listen and be in the moment and help and try to, you know, if there’s one or two nuggets that they take away from that, that they find very helpful. A classic one that I do with all of my founders is, you know, walk me how you get to a million in revenue or annualized recurring revenue, depending on their business model? How do you get to 10 million and how you get to 100? million, right? Because if you’re gonna, if you’re looking for VC investment, at some point, they’re gonna need an exit, where you’re generating, maybe somewhere between 50 and 100 million in revenue, you don’t have to have the answer right now. But if that’s a super complicated story, they’re not going to invest, right? But if it’s straightforward, and you don’t have 50 assumptions, right. So these are conversations I can have with founders in the first 30 minutes. And then they go off, and they do it and they send me in a WhatsApp and hey, can you give us feedback on this, whatever, boom, even if there’s no other meetings, I’ve hopefully helped them. And then if we do go, let’s say to the second meeting, or they’re one of the ones that I engage with, in the freemium model, if they’re ready to go, I introduce him to founder to other investors right away. So approving company back in January of 2022, is a company called caching. And they do micro lending. And they were very similar to an African company I’d seen in YC, that a very interesting model. And so I was very excited about them, I introduced them to two or three other investors that I knew would probably like their model. And they got 400,003 weeks after meeting me, which was a very, very big deal for them. Most founders, including this example, I help them with their pitch deck, inevitably, you know, even if they’re second time founders, whatever, they’re just not pitching all the time, right. So I can help them clean up and tighten up their story. Or in other cases, we do more work, right. And the pitch deck for a founder at that stage is a strategy document. So it’s super high leverage, and I can pull in both my experiences as a consultant and McKinsey to, you know, what I’m seeing and other work I’ve done with founders. So I would say that’s kind of where it starts. And then if I invest, then it can be other stuff, right? But for sure, connecting them with other potential investors is a key part.

Will Bachman  38:32

Tyler Cowen came out with a book talent last year, which talks about how to assess talent. And and I’d love to hear your approach. So in that 30 minute conversation, what are the clues that you’re looking for? What are your kind of questions, your go to questions? Or how do you think about judging the kind of the capability, motivation, ability to execute of these founders, you speaking with?

Ivan Montoya  39:01

Yeah, so I’m gonna, I’m gonna answer this question in a weird way, which is, I think, I think it’s very hard to judge talent in 30 minutes. In fact, I would argue, almost impossible. Sometimes, you know, you can maybe can rule people out, right, I think I think you might be able to do that pretty reliably, right? Like if somebody, you know, is all over the place, and maybe isn’t very clear, and their their thought process, right, but, but I’ve seen errors of all types. And I think that’s where bias gets introduced into the system pretty quickly. So for me, the first meeting is really just trying to filter out do I want to dive deeper with these folks or not? And then the judging of talent really is something that’s done over time. So for example, so what I would say is in the first 30 minutes, I you know, this is almost heretical. It’s very contrary I mean to say this as an early stage investor, there is this mythology, I think, and I shouldn’t say mythology, because it is important. But everybody’s like, Oh, it’s about the team. It’s about the team. It’s all about the team. And I disagree. I think it’s about everything, right? Because I’ve been as an operator in companies were the team was amazing, perfect for what they were trying to do. But the market was terrible. And so the team just hits their head against the wall for five years or whatever, right? Yeah. And everybody talks about the pivots and all that stuff, but that survivorship bias is right. For every one pivot that’s successful. I’ll give you 99. That didn’t work. Right. So for me, usually, in the first 30 minutes, what I’m actually trying to assess is, do they have traction? Do they have some signal a product market fit? Like, is there some indication that people want what these people have created? Because if they don’t, there’s no amount of coaching, that’s gonna solve that, that’s the magic of entrepreneurship, right? Is finding building something that people really, really want, or you’re solving a really, really important problem in a different way. And so that’s what I focus on mostly is the market and the problem they’re solving and so on. And then you know, for sure, if, if it’s somebody who’s totally scattered, it’s probably going to be hard to work with them. But I don’t, I don’t put a ton of focus on that early. Because I’ve worked with founders who couldn’t speak English very well, I do most of my meetings in Spanish. But I know eventually, if they’re gonna raise a lot of capital, they’re gonna have to speak in English to a lot of investors. So that ends up becoming a factor. But I backed founders, who are not great in English, but her just Yeah, it’s undeniable, the metrics right, and what they’re doing and their execution. So then, once I get beyond the first meeting, a lot of it is, I would say in the first meetings, aside from the just are, do they have traction? What’s the quality of the idea? A lot of this is the there’s a profile love Tabak, which is what I would call a humble the very competitive person, right? Somebody who’s self aware, they want to get better. They’re open to listening. They’re very intellectually curious. But but they’re very competitive, right? So they want to be the best at what they’re doing. You know, they’re very, you know, they they might, you know, hopefully they don’t take all the advice they get, in fact, they’re processing it, but they listen, right? And so there are many founders might own is a good example of this. And then you work with them. And you see how do they respond to feedback? How more importantly, how did they execute? So if I work with them over the course of a period of time? Are they delivering product? Are they launching stuff? Are they executing against the stuff that we talked about? The depth of their understanding of their market? Right? Because that shows me how thoughtful they are. So I don’t know if that answers your question. But for me, it’s a lot of data points, to get a strong feeling of, of how they execute and their talent.

Will Bachman  43:08

You mentioned how you talked earlier about kind of bias and how the more typical person who gets a meeting is the person who went to Harvard, went to McKinsey at the Chicago office or whatever now is returned to Mexico City. Talk to me about the backgrounds of some of the folks that you have backed, you know, what kind of schools did they go to? or their parents like middle class driving an Uber or something or equivalent? And how did they were they self taught? Did they watch a bunch of YouTube videos to learn how to code like, what’s, what’s the kind of background of these folks that you are meeting with and founding and funding?

Ivan Montoya  43:48

Yeah, so I would say I’m an equal opportunity. Investor, right? So I’ve got folks of all backgrounds. So whether it’s, you know, they they went to Stanford and whatever, right, so one of the founders that I backed very early on is a woman named Daniele scare though, he scared of that whose company called Food ology, which is kind of a cloud kitchen or virtual kitchen company in Latin America, founded in Colombia. So I think she went to HBS. They won. She and her I forget it for a co founder was already involved, but they won like a startup competition in HBS. This was right before the pandemic. She goes back to Colombia works in McKinsey. I think she’s very connected to the ropey you know, kind of Mafia as they refer to him down there. They’re kind of like the PayPal Mafia. But I knew none of this right. Other than obviously, I knew her credentials, but, but for me, it was like, you know, when I saw that pitch deck, they had 60,000 orders already on their system. The pandemic had hit, so obviously that accelerated their business. And just the insights were unbelievable. So this is somebody who executed very Well, was, you know, there was data already. And again, for those who know this space, it was like, I think, a 10 million post money. It was like a good price for a company with a ton of traction. And it was still very, very early. So she had all of the kind of classic profile, but I’m like, Yeah, let’s do it. This looks exciting, solving something very important. And that’s been an amazing experience. And I got a chance to meet her in Bogota, back in March. It was awesome, right. But for me, it’s just more about, you know, do they have the traction do they perform, etc. So, yeah, folks from, you know, in Columbia, one of the big universities there, Zuni. And this. So my first angel investment was a company called pick app. And the founders went through any of this, right? No, no US connection of any sort the founder was, I think a software engineer is just a grinder, you know, that company, the revenue went to zero during the pandemic, because he was going to be riding on the back of a motorcycle or anything. And when the pandemic was hitting, he focused with his team to try to automate all the manual processes. Then, when people started kind of going out into the economy again, this revenue comes back, this cost stayed flat. They may never raise money, again, cashflow positive, I’m very old school, I believe in the laws of economic gravity. So So anyway, so he’s one. A lot of folks in Mexico went to take them on today. So just a mix mix of folks, for sure. Look for if you’re gonna go to university in Latin America, I mean, now, it’s a little bit different than when we were in our age. But those folks oftentimes still have resources. Right. So I won’t say that, that, you know, you know, even folks who don’t have connections to the US may come from middle class families, right. But, but it’s just a mix. Total mix of founders.

Will Bachman  47:07

Okay, we got to hear the story of Coco’s Instagram.

Ivan Montoya  47:13

Okay, so I know we may be getting close to the end of the interview, so I’ll try to keep it fun but but brief. So yeah, I, I don’t know when this was this was made what’s called 10 years ago, however long it was when I first discovered Instagram. And so I have Coco. She’s a Bombay cat. She’s got these striking yellow eyes. She’s the we’ve owned cats, since 1997, and my criteria for getting a cat is that it’d be doglike. So in response to the name, it allows you to hold it. So Bombay cats are very dog like cats. And so Coco is amazing. And, and I would, I would send photos, like to the Text group of the family, whatever. And then I discover Instagram, I like that cats are really big on Instagram. And so I have this conversation with Isabella. And so the it was game on, right. And so I start posting pictures of Coco, on Instagram. And I start I do all these different tactics like brute force. So I figured, oh, you know what, I’ll do a follow up post a picture of Coco. And then I’ll follow all the other very popular Bombay cats. And maybe I’ll try to get, you know, hashtag mom, they can do really well there. So I started following all these other cat accounts, they follow me back, I’d start to get spread, right. And at some point, I followed like 7000 people on Instagram. And I didn’t know that there was a limit. So I got banned from Instagram for like, a day or two days, because I guess they thought I was a bot, like a Russian bot or something. It’s a cat. So then I’m like, oh, man, I’m screwed. I’m not gonna be able to get to the 10,000. And then one of my son says, Dad, there’s these apps that clean up your your Instagram account, you can unfollow the people that don’t follow you back. I’m like, great. I’m back in business. So then I started I’m following all these people didn’t follow me back. And then it turns out, there’s an API limit, like you can’t do more than 50 actions in one day. I got banned again. It’s are 50 actions in an hour. So then I’m like, you know, I have this program or like, every hour to get on follows 50 people, whatever. So I did it. I did this up and down business for a while. And then I discovered that pictures with the kids perform better. So then I started doing pictures with the kids and stuff and I get that but then at some point, I hit a wall. And probably like it’s 6000 or 7000 followers and like, oh god, how am I gonna get there? And then I discovered we had a lot of comments with I guess what was Japanese characters? And like, oh my god, this is like, it’s like cheap trick. Coke was big in Japan. And so I post pictures at rush hour Tokyo time, which I think was in the evening in California. Yeah. And that’s what took me over the top and I got to 10,000. Like, towards the end of May, I won the bet. But eventually I stopped posting to that account because it was like, you know, it’s what you see all these mental health issues with social media, it’s like, I post this great picture of Coco. And I’m expecting this was going to perform really well and it wouldn’t get that many likes. It’s I feel bad. It’s a tough point. I’m like, okay, nobody gets between me and cocoa, nobody. So I stopped posting because I didn’t want to go through the mental health issues of just me and cocoa now. So you can go find the account, that’s Coco, the Bombay cat,

Will Bachman  50:42

Coco, the Bombay cat, okay, we’ll include that link in the show notes for people that want to follow, but it’s not going to be fresh pictures. Plus, it’s not

Ivan Montoya  50:50

very active. Maybe Maybe I’ll post a few pictures just for old times. Okay, but, but it’s very funny.

Will Bachman  50:58

We already talked about one and I wanted to loop back with it. You mentioned that the Cuban Revolution course that you had at Harvard? Because my normal question now is to wrap it up is to ask about course of professors at Harvard that have resonate with you. What was it that you took away from that course about the Cuban revolution that has resonated with you?

Ivan Montoya  51:19

Yeah, I think it was, I mean, the content was interesting. I’ll talk about that. But I think it was more than Professor. I mean, and I know Professor Domingo’s is sad, some controversial stuff go on, but, but I’ll just talk to him really about his personal impact on me. But first of all, this guy, it was like he would perform in class, right? You would walk in and the way the class was structured was three days a week, one day, he would take one position on an argument, right? Maybe it was, you know, I’m gonna make something up. But there was this theme, this idea of, you know, what structural right. There’s these things in history that happen that are inevitable, possibly, right. That’s one argument. And another one where it’s more, he use a term volunteer, turistic. But the idea was, how much depends on people, right? Like an individual

Will Bachman  52:12

like, right, the great man theory, the great person, yeah, right. And

Ivan Montoya  52:15

so let’s just say for argument’s sake, that was the discussion of the week. So one day, he would say, Oh, it was inevitable that the Cuban revolution would happen. And he’d go through the arc of history of how whatever. And then and you’d leave that class in? Yeah. Yeah. That’s, that makes total sense. And then the next class, he would take the complete opposite point of view. And it’s a no, it depended on individual right, it depended on Fidel Castro. And they would go through how like, multiple times Fidel almost got killed, and whatever. And like, if it had not been for him, this wouldn’t happen. And all these structural things existed before him, but it was him, you know, who caused the revolution, right? Or led it or whatever? And then you leave that class, you’re like, Yeah, that was right. And then on Friday, or whatever the third day was, he would have an open discussion. And you never really knew what he believed. But he would facilitate a discussion amongst the class, right? Or what about it. And there were three things that came out of it. Number one was, wow, this guy cared, like, he cared, he performed. I mean, it was a tour de force, it wasn’t a professor just kind of going through the motions. It was like, it was exciting to go to class, like, never missed a class. Second, he made a point, which was look, reasonable people, smart people, intelligent people can can have two totally different points of view. And that is normal. And so you know, this way, you know, I’m sure there was partisanship back when we were in college, for sure. But it was just this idea, like, Hey, it’s okay. You know, you might run into somebody who’s, who’s just as just as much knowledge, whatever. And it’s okay to disagree. You know, and then the third thing is that you need to seek your truth. Right? If all you do is surround yourself, this is terminology, we didn’t have us back then. But if you surround yourself by your own echo chamber, then guess what, you know what you’re gonna believe, right? And then you become immune to being open to other ideas. And it was just powerful to see him because on this issue, particularly the Cuban Revolution, you can imagine we had Cuban, you know, Americans in the class who were Ardan on, let’s say, one side, right? And just to see, you know, not that they change their point of view, but that they were open to like, yeah, I understand why I may disagree with what happened, or how they did it or whatever. But like, yeah, you become open to other ideas. And I think the last thing he finished his class with, like, You got to be a lifelong learner. You got to never assume that you know the truth, right. And those things are, I mean, more powerful today than they were back then. Right. And it was awesome. I’ve met a lot of people I’m still very close to in that class, it was a great experience.

Will Bachman  55:05

What an incredible format and way of learning and to lessen you know, to steal man, the opposing arguments. And Brian Kaplan, I think has this concept of the policy Turing test. So can you, you know, can you state the position of the other side in a convincing enough way that you actually sound like you might support it? And it’s not that’s incredible to witness to him presenting both sides like that, even? How can people follow up with you track your progress? Find out more about your portfolio and investments? How can they get in touch?

Ivan Montoya  55:51

Yeah, so I’d say the best way for now is my LinkedIn, because I post a lot of content and share what’s going on. We’re, as we speak, we’re literally about to relaunch the firm’s website. So I’m a solo GP right now. So what that means is, it’s just me, and a couple of kind of more junior folks. But eventually, the vision for the firm is to get bigger and have more partners. So right now, the website is very minimalist. But over the coming probably in September, it’ll be much more robust. You can sign up for a newsletter that we’ll be launching, where I’ll share my kind of what I’m seeing in the marketplace, and maybe some anecdotes or stories about some of the companies that are backed. So new moonbow ventures, so it’s spelled n u m, u n, d o, kind of like New World, new mundo ventures.com. So that’ll be that’ll be under construction and improved over the coming weeks. But that’ll be the second best place to track what’s going on.

Will Bachman  56:50

Amazing, Yvonne, thank you so much for joining today. This was an amazing discussion. Listen, if you go to 92 report.com, you can get the full transcript of this episode in the show notes. Thanks for joining.

Ivan Montoya  57:02

Yeah, and maybe just as a final thing, I just want to give a shout out. You know, over the years, I’ve remained very, very close to a couple of folks that I mentioned, Tim wittmeyer, Sharif malaise and Alex stevis. And we actually have an annual get together. And I just got back from it. So we went to Alex’s, he has a place in South Carolina lake house. And so we’ve been doing this for the last five years. And it’s great, right? It’s we hang out and, and all this stuff. And we usually have one day, which I refer to our one session, which I refer to as our therapy session. Okay. And, you know, we talked about, you know, what we’re most excited about in the coming year, what we’re most afraid of in the coming year. And I highly encourage, you know, obviously this goes without saying, friendships, relationships are super important. And I just feel lucky that, you know, there’s a few of these friendships from Harvard that remain vital in you know, we all go through ups and downs, and it’s great to tap people to help you through the tough times as well as enjoy the good ones. So shout out to those guys.

Will Bachman  58:14

That’s incredible that you have kept that together. Tim has been a guest on the show. Did he put you through an f3 workout?

Ivan Montoya  58:22

Yeah, I have. I have. I have experienced some of those workouts. Yes.

Will Bachman  58:28

Include a link to the Tim wittmeyer episode in the show notes of this one as well. Thank you for that last part of sharing that. And I think that’s a good message for all of us that even if you can’t manage to do an annual weekend retreat, one of your classmates is out there and probably could really use a call, you know, maybe there something is going not best for them and I think that they would appreciate a call. So reach out, reach out and I’m gonna ring for sure. Thanks

Ivan Montoya  58:59

a lot. Well, I really had fun.

Will Bachman  59:00

Thank you.