Angeles Inversionistas

ACADEMIA DE LA INVERSIÓN
BUCARAMANGA
13-14 DE AGOSTO 2019
Ludovic Prades
Portfolio Manager
lprades@angelventures.vc
Confidentiality disclaimer
The information contained in this document is confidential,
privileged and only for the information of the intended
recipient and may not be used, published or redistributed
without the prior written consent of Angel Ventures.
The opinions expressed are in good faith and while every care
has been taken preparing this document, Angel Ventures makes
no representations and gives no warranties of whatever nature
in respect to those documents, including but not limited to the
accuracy of completeness of any information, facts and/or
opinions contained therein.
Angel Ventures, its subsidiaries, the directors, employees and

agents cannot be held liable for the use of and reliance of the
opinions, estimates, forecasts and findings in this document.
2
Introducción
3
AV is the largest Mexican VC Firm
with a pan-regional investment thesis
Founded in 2008, AV is one of the most active and influential Mexican VC firms in Latin America. The
Firm invests in early-stage to early-growth companies by becoming a leading Series Seed and Series A
investor in startups that drive innovative business models tailored for the Latin American market. We
manage two investment funds (one of them in divestment period), and we strive to perform the best
possible investments by attracting best-in-class entrepreneurs, applying exhaustive and progressive
methodologies to assess opportunities and leveraging our intangible assets to boost our portfolio
returns, all while being compliant with major global standards for VC practices.
94 10 30 USD 36m
total limited different LP portfolio invested through
partners nationalities companies funds I & II
$350M 4 13
raised by regional investment official VC
portfolio offices team manager
companies* professionals
CONFIDENTIAL *US dollars. As of Q1’19 4

The firm has several business units that bring value to our funds
AV Network Archetype Incubator BP-Xpress

Largest angel investor network in Latam Incubation program that graduated Workshop that aims to develop a
and the US-Hispanic community with 350+ 169 very early stage startups that working business model in one day
members. raised a total of +15M
AV-Fellows AI Magazine Investor Academy

One-year leadership program for MBA Monthly publication that aims to create a Executive program developed in
candidates at top-tier schools who are space where more than 25,000 readers can conjunction with universities to
interested in the Latam VC industry. keep updated about the industry train new investors.
Startup Drinks CDMX Tech-Tour

Monthly sponsored event where Summit sponsored by AV that brings
entrepreneurs, investors and allies engage in international VC players to a live tour in Mexico
conversations in a private, informal City to discover its thriving ecosystem
environment
CONFIDENTIAL 5
AV Fund One - Portfolio Summary
Travel & leisure e-Commerce Big Data and Artificial Intelligence Non-invasive portable medical Financial solutions applied to
Doctors and patients’ Marketplace Fashion e-Commerce platform
platform for the real estate market device that detects cervical cancer health-related services for BoP.
Location - MX Location: MX
Location – MX Location - MX Location - MX, US Location - MX
Mobile payment processing Technology-themed online Anonymous mobile identifier for Real-time spreadsheet integration Solar water-heating system for B2B2C IoT device that monitors LP
terminal learning courses advertisers and publishers for the supply chain industrial manufacturing gas consumption
Location - MX & US Location - MX, CL, CO, PE, SP Location: MX, US Location – MX, US Location - MX Location: MX, US
Home-vacation booking and Mobile virtual reality distributor &

Senior Day-Care Centers Mortgage brokerage services Online logistics brokerage platform
rentals in LATAM video producer.
Location: MX Location - MX Location – MX, BR, CL, PA & UR
Location - MX, AR & BR Location: MX, AR, US, PE
Micro-lending platform in Latin Business and financial intelligence Real-time musical performances
Home services marketplace
America tools for consumers through a social network
Location – MX, BR, CO, AR
Location - MX Location – MX, CO Location – MX, US
CONFIDENTIAL 6
Fund is still in fundraising phase, even though a first closing has been executed.
Any request for further information – lprades@angelventures.vc
Fund Size Cap (USD) $100M
Angel Ventures Term 8+2 years: 4-year investment period
Pacific Alliance Target Return 24% Net IRR | 4.0x MOIC
Fund II, LP Opportunity Up to 10% of total fund can be invested

Investments outside the Pacific Alliance
S U M M A R Y O F
Closing Date October 2019
T E R M S
Major LPs
CONFIDENTIAL 7
AVPAF Fund II: Investment Strategy - creating pan-regional companies
A1 /. A2 / A3 /
Business Models Conglomerates Disruptor
We Invest in 2-4 different companies that share We Invest in a company that will expand its No direct or meaningful competitor
similar business models, to later consolidate them operations by acquiring stakes in its competitors or available: we invest to scale and grow.
into a single, bigger company. complimentary business models.
~40% of total fund ~40% of total fund ~20% of total fund
CONFIDENTIAL 8
Industry: ICT | Mobility
A2 | Conglomerate
Operations: MX, PE, CO
Rental, operating and financing system for

shared individual transportation vehicles in
emerging markets, including ride-sharing
support & fleet management
Current
FUND II
PORTFOLIO
Portfolio
Industry: ICT | Smart Cities Industry: BoP / |Clean Energy

A3 | Single Company A3 | Disruptor
Operations: CL, MX Operations: MX
Proprietary software and hardware platform that Hybrid water heating system (solar and electricity)
develops Smart City Solutions in the security, for the consumer household market, using
transportation, public space, environment, patented technology and an innovative
advertising and entertainment sectors. commercialization model
CONFIDENTIAL 9
Industry: Retail | K-Beauty
A3 | Conglomerate
Operations: KR, MX, US, CN, VN, TW
B2B, global distributor of Korean beauty brands

to international retailers, supplying 85+ brands
Current
FUND II
PORTFOLIO
Portfolio
Industry: ICT | Property Tech

A3 | Single Company
Operations: MX Industry: Retail
A2 | Conglomerate
Operations: CO, MX, AR, BR, ROLA
End-to-end, long term property rental services

that use technology to expedite the process for
tenants and property holders. One-stop-shop B2B platform for IT products
and services in LATAM, optimized for both
SMEs and corporations.
CONFIDENTIAL 10
Industry: Mobility | ICT
A1 | Business Model
Operations: MX, CO
App-based mass transit mobility network that smartly

connects inner-city commuting routes by providing a safe,
comfortable, efficient and accessible experience,
Current
FUND II
PORTFOLIO
Portfolio
Industry: Retail Industry: Retail | Hospitality

A1 | Business Model A2 | Conglomerates
Operations: MX, CO Operations: SP, MX
A curated, omnichannel marketplace with a strong Hotel booking platform to allow users to decide the check-
white label brand offering affordable design in time, how many hours they want to stay in the hotel,
furniture to the high & aspirational middle class. and just pay for those hours (micro-stays).
CONFIDENTIAL 11
Agenda
I. Introducción al Venture Capital
II. Invertir en VC en directo – Angel Investing
III. El proceso de inversión
IV. Proyecciones financieras & Valuación
V. Invertir a través de fondos de VC & medir

retornos
CONFIDENTIAL
VENTURE CAPITAL
Venture Capitalists finance emerging and highly disruptive

enterprises, through equity and other subordinated vehicles.
These investments go along mentorship, advisory on certain
corporate matters and strategic development that generate
value to the Company. The value-generating strategy helps the
Company growth to a point where investors can sell their
positions and an increased purchase price.
VCs are considered one of the best and most important

catalysts for generating companies, business models and
innovative products and services.
13
The VC Industry
The business of creating businesses
VCs are professional, institutional asset • Manage their own (or somebody else’s) assets
managers that manage high-risk assets… • Fiduciary responsibility
• Portfolio asset diversification
• Disruptive innovation
…who develop and grow many of the most
• Exponential growth (bigger and faster)
important and innovative companies…
• New forms to do something…
• Value is based on knowledge, not necessarily on

…that can’t (or are difficult to) be financed bricks…
through traditional means… • Startups do not meet bank’s requirements
• “There’s nothing…for the moment”
• Long-term investments
…where only a handful will provide the
• J-curve: Big losses today…big profits tomorrow
necessary returns for investors…
• Huge investment returns (+30% IRR)
HOW DOES THE INDUSTRY WORK?
17
Formas de financiamiento de una Startup
Origen Disponibilidad Costo Montos Etapa Riesgos

• Tardas años en poder crecer
BAJO BAJO BAJO Crecimiento • Es difícil generarlo
• No hay
• Difícil de administrar
BAJO ALTO BAJO I&D - Crecimiento • Conflictos de interés
• No hay valor agregado
• Muchos requisitos que hoy no puedes cumplir
MEDIO MEDIO MEDIO Crecimiento • Tardado
• Lleva garantías
• Muchos requisitos que hoy no puedes cumplir
MEDIO BAJO BAJO I&D - Validación • Tardado
• Muy difícil de administrar
• Muy dinámica la forma de administrar
MEDIO MEDIO BAJO I&D - Validación • Es difícil conseguir
• Puede ser complicado administrar
• Muchas expectativas que cumplir
I&D – Capital
MEDIO ALTO MEDIO / ALTO • Puedes perder el control
Privado
• Necesitas haber trabajado la startup antes
• No siempre es sofisticado
Varía (aunque es
• Es difícil conseguir
BAJO MEDIO MEDIO / ALTO más hacia
• Puede limitar la estrategia -> corporatización
Validación)
• Tardado
PRIVATE & CONFIDENTIAL

Angel Investing & Venture Capital
The financing curve
VC Investment Curve
Investment Method
&
Fools Time
&
National Fans
Bank of
Me
Company’s
I&D Development Growth Expansion Consolidation
Stage
In operation for… -1.5 - 0 years 0 - 1.5 years 1.5 - 3 years 3 - 5 years +5 years
VC Industry – Sample Companies that were invested by Angel
investors & VC funds
The VC Industry
Who are involved?
Incubator
High-Impact Incubator
Accelerator
Universities & Research Centers
Events / Bootcamps
Co-working Space
Government Initiatives
Associations & Think Tanks
Angel Investing
Crowdfunding
PEVC Investment
Latam ecosystem is increasing the appetite of international investors for
global investments
High-yield transactions have become more valuable and abundant…
Capital raised by Latin American startups
US Dollars, LAVCA
1,976M
$ invested
# deals
1,141M ▪ On-demand ▪ Mobile payment ▪ Online travel

delivery app processing eCommerce
594M ▪ LATAM Unicorn terminal ▪ IPO in 2018
526M 500M 463 ▪ Raised $1.5Bn ▪ Raised +180M
387M 425M
186 182 197 249
143M 119
69 11
2011 2012 2013 2014 2015 2016 2017 2018
▪ On demand scooter ▪ Microlending ▪ Banking platform

rental service platform ▪ Raised +$700M
▪ Latam has started to raise investment rounds with a target size of more than $100 ▪ Raised 73M ▪ Raised 124M
million, a relatively rare occurrence in the region in previous years.
…attracting top-tier international investors:

▪ Co-investments between global and LATAM investors are rising; $1.2 billion dollars
invested in 2018 (vs. $633 million in 2017).
▪ Mexico was the second most active market by number of deals after Brazil (82
startup investments totaling $154 million), but Colombia saw more money invested
($188 million over 23 deals).
CONFIDENTIAL 21
The PE industry is growing at a steady pace in Colombia
Funds raised by the Colombian PE industry by year Comparing the Colombian PE industry to other LatAm countries
Investments by share of Investments in USD Millions

country GDP
Funds raised by the Colombian PE industry by region of

origin
CONFIDENTIAL 22
Energy and construction sectors have attracted most of the investments in the
recent history of Colombia…with a strong push from the Fondos de Pensión
Investments by sector (USD Millions) Investments by sector (#) Share of total industry’s capital commitment by investors’
type
CONFIDENTIAL 23
Venture Capital is growing fast but remains relatively small
Accumulated commitments by investment type (USD M) Forecasted size of funds currently in fundraising phase
Commitments within the VC segment in Colombia by

investors’ category
CONFIDENTIAL 24
Agenda

retornos
CONFIDENTIAL
27
Angel Investing
What is an Angel Investor?
Despite being a relatively young

industry, early stage investing has
developed in the last decades since
it started to organized informally in
the 80’s. Angel investors are an
intrinsic part in the development of
high-tech, innovative and cutting
edge companies that have the
potential of creating jobs and Characteristics of an
disrupting traditional industries.
Angel Investor
An angel investor is an individual who invest his own capital in startups or early stage companies in exchange for ownership. The
typical angel investor is an experienced professional with a particular industry expertise and has the capacity to invest (and lose) 5%
to 20% of wealth in startups. The investor also has an intrinsic entrepreneurial spirit and desires to support the companies he invests
in. Hence, an angel investor more than just injecting cash in a company is expected to provide smart capital and support the startup
with his expertise, experience and contacts.
Angel Investing & Venture Capital
The genesis of startup financing…
ANGEL INVESTORS PROVIDE LESS EQUITY BY …BUT FUND NEARLY ALL SEED / EARLY-STAGE
TOTAL DOLLARS. DEALS
Angel
Investing
Venture
Capital
Private
Equity
Angel Investing
Where are they?
¿Quiénes son?
Empresarios
retirados
24% Ejecutivos 25%
Ángeles
Inversionistas
Profesionales, 12
Family
Empresarios activos 33% Offices
6%
Fuente: LAVCA
30
Angel Investing
How and why you should do it?
• Often successful entrepreneurs or

retired business professionals
• Help entrepreneurs
• Active investors providing
money, expertise, and their • Stay engaged – use skills an
network experiences to help build a business
• Contribute to their local • Give back to community or university
ecosystem (mentoring, judging,
• Active form of investing – not just
educating)
watch markets
• Invest their own money (not money • Find their next opportunity
managers)
• Network and learn
• Generally invest in local companies
with high-growth potential • Return on investments is the metric
• Invest in businesses not run by family

31
Angel Investing
The connection between investors & entrepreneurs
• Many angel provide • Often invest in multiple rounds to

mentoring before and after ensure entrepreneurs can grow
investment • Develop relationships with
venture capital firms for
• Many serve as board expansion capital
members or observers
• Help lead M&A process early on
• Some join C-level executive • Angel monitoring/mentorship
for an interim period improves startup health
• Harvard/MIT study shows angel
• Information rights in term support improves startup success
sheet rate

Venture
Economics
32
The VC Industry: The process towards a lean, successful startup
33
Venture Economics
How do we get profits? $45M pre
$80M pre
$17.5M pre $50M post 1.2x $90M post
$22.5M post
$6M pre 1.6x
$7M post 2x 1.3x $110M pre
$10M $120M post
$1.5M pre
$1.75M post 2.5x $10M Serie
Mezzanine
3.4x “D” $159M

$5M Serie Analíticos
$5M Serie “b” de ventas
$1M “A”
Series Acuerdo de
distribución
QUIEN SABE…
Seed Expansión
Validar de la
$240K R&D Validar modelo de Compañía
propuesta de negocio &
valor al
MVP consumidor
economics
Determinar riesgos de éxito / organizar “milestones” Fuente: Trevor Loy – Stanford University
Los Economics de un VC - ¿Como hacen dinero? (1/2)
Proyecciones del inversionista • Ingresos - $52 millones

• 14 millones de usuarios pagados
• 28% utilidad operativa
• 14% utilidad neta
• 12 patentes
• 3 redes exclusivas de
distribución
Rango
Indicador Resultado $131 – 280 millones
Múltiplo de ventas: 3.5x $182 millones Promedio
Precio por usuario pagado: $280 millones $159 millones
$20 Media:
Múltiplo EBITDA: 9x $131 millones $179 millones
P/E Ratio: 24x $175 millones
Fuente: Trevor Loy – Stanford University
Los Economics de un VC - ¿Como hacen dinero? (2/2)
Aumento del valor del activo = $8M
Pre-money:
$18M
Post-money:
$10M
Valuación Pre-money
Valuación de una compañía antes de recibir una inyección de capital
Valuación Post-money
Pre-money + capital recibido por la compañía en la ronda
Venture Economics
How do we get profits?
The role of a VC is to
create value using
certain drivers
(operational efficiency,
revenue growth, asset
restructuring, etc.). As
always, the company’s
capacity to generate
cash flows may be
one of the utter
reasons for a
profitable exit.
Agenda

retornos
CONFIDENTIAL
Eligibility
The Investment Process – Speaking VC Language…
• Technology • I&D
• Healthcare • Series Seed
• Retail / Consumer • Bridges
• Software • Series A
• Virtual Reality… • Series B...Z
• Mezzanine
• Industry experience
• Operational / financial / strategic support • Idea • Growth
• Leverage network • Concept • Botton-line growth
• Coaching & advising • Prototype • Consoldiation
• Material resources • Iteration stage (α,β, MVP, (geographical, product
• Branding & “Bragging rights” 1.0) vertical, etc.)
• Product • How much capital?

• Business Model • Valuation?
• Problem / Market Need • Vehicle?
• Distribution Channels • Type and Terms
• Competitive Landscape • Corporate Governance
• Secret Sauce? • Use of proceeds
• Milestones • Holding structuring
• Forecasted Cash Flow

• Assumptions
• Customer Acquisition
• Revenue build-up
• Expense budgeting
• Timeframe depends on the company stage
•Actuals vs. Forecasts •Management Team •Corporate Structure •Valuation

•Marketing •Board of Directors •Bylaws •Shareholder Rights
•Business Model •Suppliers •Related Parties •Powers of Attorney
•Fiscal Issues •Employees •Current Investor look-up •Management Obligations
•Ops rationale •Allies & Partnerships •ESOPs, Options & & Responsbilities
•Product validation •Mentors / Advisors Warrants •Information Rights
•Any other issue? •Clients •Incentive Aligment
43
The DDProcess
References
/ Market
Validation
ESG Legal &

Investment Memo
Matters Regulatory
Define What do we do with it?
Follow-up
action
session
courses
• Handbook for Investment

Committee
Business • Term sheet negotiation
Intelectual
Model &
Operations Validate
Property • Risk Assessment
information & Info inquiry • AV Ask integration
build & analysis • Branch office role-assignment
assumptions
• Approach I & II set-up and
integration procedures
Team / Financial
Information • Portfolio integration procedure
HR
• Portfolio profiling
Financial &
Market Mistery Stakeholder Statistical Background Sensibility
Tools Research Shopping Analysis Modeling Checks Analysis
Cosas que hay que tener en el “top of mind”…
V. Requreimientos de Capital
VI. Estructura del Deal
I. Credenciales del emprendedor
VII. Exit
II. Mindset del emprendedor y habilidades
III. Liderazgo del emprendedor
IV. Honestidad e Integridad I. Tamaño del mercado
V. Juicio Claro II. Dynamics del mercado
III. Competencia
IV. Barreras de Entrada
I. Tamaño del mercado
II. Dynamics del mercado
III. Competencia I. Realidad de las proyecciones
IV. Barreras de Entrada II. Alcance de las proyecciones
III. Timing del cash-Flow
IV. Gastos razonables
I. Propuesta de valor
V. Crecimiento del top-line
II. Diferenciación
VI. Salarios del management
III. Estrategia de crecimiento
IV. Revenue recurrente
El Inversionista - ¿Qué buscas y qué esperas?
• Que te cuenten una historia…busca que el emprendedor

• Buscas a un emprendedor donde haga un buen haga una buena impresión
“match” con el inversionista -> Calidez • El de la historia incluye un final con
• Buscan a una startup que se a tu Tesis de
• Puedes crear un vínculo emocional con ellos
Inversión -> la sinergia, no van a ser el fit perfecto
• No sabes quien es, ¿porqué deberías prestarte
• Buscas a un equipo, no a una persona -> deben ser atención?
• No es el , no dejes que sea
• Paradójicamente, tú al equipo si las
• Llévate datos a comités de inversión, juntas de equipos,
cosas van muy, muy mal. los socios, etc…
• Identifica un proyecto escalable, sobre todo • algo…siempre algo! (una segunda cita,
aprovechando de escala y de alcance feedback, un contacto nuevo, una amigo…)
• Evita el Fire to the caveman! – No te emociones • Mindset en la junta: La startup debe multiplicar en
aunque veas que la tecnología es algo fuera de este decenas veces el valor de la inversión.
mundo
Due Diligence - ¿En Qué Enfocarse?- Equipo
• Entender quienes son los genios detrás de la

empresa
• Credenciales ¿Cómo apalancan sus experiencias
previas a la startup?
• Entender que % de la compañía tienen los founders
entre ellos. Hay que tomar en cuenta que un
proyecto exitoso llevará a mas dilución. No es
recomendable invertir en proyecto de VC donde los
founders tienen < 25% de la compañía.
• Entender si el equipo tiene las habilidades
comerciales, financieras y técnicas requeridas.
Due Diligence - ¿En Qué Enfocarse?- El Problema y
mercado
• Entender el “dolor "que tiene el cliente y como se

lo quita • ¿Por qué sus clientes necesitan el producto?
• “Más rápido, mejor, más eficiente” son • ¿Por qué sus clientes no pueden resolver el
acercamientos, no es el problema problema?
• ¿Por qué sus clientes no pueden evitar el comprar
tu solución?
• ¿Cuál es la evidencia que tienes de que sus
• ¿Qué tan grande es? ¿Cuales son las tendencias? clientes preferirán tu solución?
• ¿Cuál es el costo de no tener esa solución?
Due Diligence - ¿En Qué Enfocarse?-
La solución: el producto
• Entender de qué forma resuelve el

problema y cómo le genera valor al
cliente
• ¿Por qué lo percibirá como una solución
el cliente?
Due Diligence - ¿En Qué Enfocarse?- Modelo de Negocios
• Propuesta de valor:
• Como segmenta a sus clientes
• Cómo se relaciona con sus clientes (antes, durante y después
de ofrecer el producto)
• ¿Cuáles son los recursos que necesita?
• ¿Qué actividades en específico debe realizar para generarle la
propuesta de valor al cliente?
• ¿Tiene partners? ¿Aliados? ¿Cómo los involucra?
• Tiene que explicarlo con manzanas.

• No debe usar lenguaje complicado.
Due Diligence - ¿En Qué Enfocarse?- Competidores
• ¿En qué se diferencia con ellos?

Positivas y negativas
• ¿Dónde encuentra mejora contra en
comparación con la competencia?
• Generalmente, usan una “competitive
landscape matrix”
• Los competidores incluyen los
sustitutos también…y en algunos
casos hasta complementos.
• El objetivo es que entiendas qué hay
afuera…
Due Diligence - ¿En Qué Enfocarse?- Go-to-Market Strategy
• Explicar cómo va a adquirir clientes -> ¿Qué

necesita?
• Explicar de qué manera va a adquirir clientes ->
¿Cómo lo va a hacer?
• ¿Cómo va a generar tracción? -> ¿Cómo escala la
estrategia, la hace más grande y más eficiente?
• Entender el plan de penetración - ¿tiempos?

• Entender el proceso de ciclo de venta
• ¿Cómo entran los aliados aquí? ¿Cómo van a

ayudar?
• ¿Tiene clientes ideales? A veces hay incluso
calidad entre los clientes que adquieres
Due Diligence - ¿En Qué Enfocarse?- El
componente “sexy”: ventaja competitiva
• Entender la naturaleza de su ventaja

competitiva: eficiencia, Premium, rapidez,
complementariedad, etc.
• Entender cómo espera mantenerla durante
un largo periodo (o en su caso, cómo vas
mantenerte a flote)
Due Diligence - ¿En Qué Enfocarse? - Financieros y Unit
Economics
• Entender la eficiencia de sus insumos durante el crecimiento de la compañía

• No es mala señal que al termino del periodo seguirá teniendo pérdidas…
• …sin embargo, hay que entender en qué momento la empresa se vuelve rentable (punto de equilibro)
• Analizar a través de varios escenarios, cual sería el impacto sobre la compañía de cambios en las
proyecciones de cada una de las variables importantes (e.g. crecimiento, rentabilidad, churn rate, etc)
Due Diligence - ¿En Qué Enfocarse?- Logros y Milestones
• Debe demostrar que el modelo de

negocios y el producto funcionan
• Recursos humanos, expos, premios,
validaciones, partners, proveedores
• Debe demostrar que hizo mucho con
pocas cosas
Due Diligence - ¿En Qué Enfocarse?- Los “Asks”
• Programa de objetivos (los más importantes) que

• Tamaño de la ronda sean MARTE (medibles, alcanzable, rentables,
temporales y específicos)
• Valuación
• Deberá poner cuándo estará buscando otra nueva
• Vehículo de la Inversión y términos ronda de inversión (si es necesario)
• Cuándo terminará de cerrar la ronda • Menciona potenciales salidas: ¿Cómo sería la venta
• Usos de capital de la empresa y a quién?
• Inversionistas que ya cerró
• Inversionistas que está viendo (y en qué etapa están
del proceso)
• Si está buscando advisors / mentores
• Si está buscando gente para incluir en la plantilla
laboral
• Si está buscando contactos e intros con aliados y
potenciales clientes
Agenda

retornos
CONFIDENTIAL
Venture Economics
Misconceptions about valuations
• All valuations are biased. • There are no precise • The understanding of the
The only question is how valuations model is inversely
much and in which proportional to the number
direction. of assumptions required.
• Direction and magnitude of • Simpler models do much

the bias is directly better than complex ones.
proportional to who pays
you and by how much.
Venture Economics
Approaches to valuation – What is the underlying concept?
• Relates the value of an asset to

the present value of expected
future cashflows on that asset.
• Estimates the value of an asset by

looking at the pricing of
“comparable” assets relative to a
common variable, such as earnings,
cashflows, book value, sales… the
such famous “multiples”
Valuation
59
Valuation
Forecasting Financial Statements
A few things you need to know about forecasting
…they always will …they always will …they always are …they are not a
be wrong… become obsolete optimistic… substitute for
rather quickly… financial
planning…
…carefully
How your
…using market …which is …using
Company makes adjusted by
logically wishful
data… industry
money… presented… thinking.
standards
Valuation
Understanding the revenue streams
La Curva S
1. Define la unidad de medida
2. Estima el precio del producto
Sobre estimas el
a) Basado en el cliente
crecimiento de
b) Basado en el mercado ingresos
3. Estima cantidades
a) Top-down
b) Bottom-up
I. Estima potencial de compra por ??? Limitas el
unidad
crecimiento
II. Estima un precio promedio prematuro
III. Realiza crecimientos de tu producto
c) Datos de mercado, comparables, etc..
Valuation
Understanding the costs
1. ¿Recuerdas tu unidad de medida? Tiene costos 2. ¿Cómo los estimas?

asociados: a) Costos directamente de proveedores y
a) Mano de obra expertos
b) Materiales b) Competidores
c) Gastos Indirectos
d) Gastos Directos e Indirectos
1. ¿Qué gastos incurren?

1. Costos del equipo y facilidades
2. Costos de empleados
3. Costos de venta y marketing
4. Costos de gobierno corporativo
2. ¿Qué pasa con el founder?
3. ¿Qué costos de desarrollo existen?
1. Costos de set-up
2. Pre-revenue development plan
3. Costos de capital y desarrollo
4. ¿Qué pasa con los impuestos?
Valuación de Empresas
¿Cómo se miden los retornos de inversión? IRR & CoC
Los VCs calculan un rango de cifras que consideran diferentes grados de éxito operativo y diferentes múltiplos de salida usando el EBITDA. El VC generalmente toma el
EBITDA del año de salida proyectado por el emprendedor y asume que este es el mejor escenario operativo, luego multiplica este valor de EBITDA por otros porcentajes
para producir un rango de posible rendimiento de EBITDA. El VC también considera un rango de posibles múltiplos de EBITDA de año de salida basados en compañías
comparables, pero descontados para reflejar la falta de liquidez de la inversión de VC. Las ganancias se calculan luego en ambos rangos, y generalmente se calculan para
al menos dos años de salida posibles.
Año 0 Año 1 Año 2 Año 3 Año 4
EBITDA año de Salida $5.8

Performance Operativo 100.0%
Ronda 1 / Año 0
Multiplo EBITDA 7.0x
Precio por acción $1.00
Enterprise Value $40.6
(-) Deuda Neta 0.0
#
Total Equity Value $40.6
Accionistas Inversión Acciones Tenencia
Investor 1 Tenencia 25.0%

Management - 3.900 75.0%
Investor 1 Equity Value $10.2
Investor 1 $1.3 1.300 25.0%
Flujo a la Salida $10.2
Investor 2 - 0.000 0.0%
Investor 3 - 0.000 0.0%
Flujo de Efectivo Inversionista 1 ($1.3) - - - $10.2
Total $1.3 5.200 100.0%
Internal Rate of Return (IRR) 67%

Post-money $5.2
Cash-on-Cash (CoC) o
Pre-money $3.9
Multiple on Invested
Capital (MOIC) 7.8x
Valuación de Empresas
¿Cómo se miden los retornos de inversión? IRR & CoC
Round 1 in Year 0 Round 2 in Year 2 Year 0 Year 1 Year 2 Year 3 Year 4

Price/Share $1.00 $1.96
Exit-Year EBITDA $5.8
Invest- # of Owner- Invest- # of Owner- Operating Performance 100.0%
Shareholders ment Shares ship ment Shares ship EBITDA Multiple 7.0x
Enterprise Value $40.6
Management - 3.900 75.0% - 3.900 51.7% Less: Net Debt 0.0
Investor 1 $1.3 1.300 25.0% $1.1 1.861 24.7% Total Equity Value $40.6
Investor 2 - 0.000 0.0% $3.5 1.785 23.7%
Investor 3 - 0.000 0.0% - 0.000 0.0% Investor 1 Ownership 24.7%
Total $1.3 5.200 100.0% $4.6 7.546 100.0% Investor 1 Equity Value $10.0
Proceeds at Exit $10.0
Post-Money
Valuation $5.2 $14.8 Total Proceeds to Investor 1 ($1.3) - ($1.1) - $10.0
Pre-Money
Valuation $3.9 $10.2 Internal Rate of Return (IRR) 54%
Cash-on-Cash (CoC)
o Multiple on Invested
Capital (MOIC) 4.2x
Valuation Method
65
Multiples Valuation Method
What is it?
Enterprise Value Multiples Equity Value Multiples

EV/EBITDA (6.0x – 18.0x) Price / EPS (P/E ratio) (15.0x – 30.0x)
EV/EBIT (10.0x – 25.0x) Equity Value / Book Value
EV/Sales (1.0x – 3.0x) P/E/Growth (PEG ratio) (0.5x – 3.0x)
The denominator usually is either a stock or a flow. A stock is measured at a single point in time (e.g. book value), while a flow is measured over a
period of time (e.g. EBITDA).
Historical valuation multiples are usually calculated over the last twelve month (LTM) period. To calculate the LTM EBITDA, for example, add the
EBITDA from the most recent stub period to the latest full-year EBITDA, and subtract the EBITDA from the corresponding stub period last year.
A company reported an EBIT of $100 for the fiscal year ending 12/31/16. The company's latest Board Meeting reported an EBIT of $80 for the nine
months ended 9/30/17 and $70 for the nine months ended 9/30/16. What is the company's LTM EBIT?
LTM EBIT = $100 + $80 − $70 = $110.
Adjust the denominator to exclude the effects of extraordinary and non-recurring items such as restructuring charges, one-time gains/losses,
accounting changes, legal settlements, discontinued operations, and asset impairment charges. Also, if noncontrolling interest is excluded from the
calculation of EV, the portion of EBITDA and EBIT attributable to the noncontrolling interest should also be excluded from the denominator.
Comparable company assessment
Comparable companies analysis has application in M&A advisory, fairness opinions, restructuring, IPOs
and follow-on offerings, and share repurchases. Consider an IPO of a private company that does not
have a public market valuation. To determine how public markets might value the company, an
investment banker will establish the comparables universe, which may consist or one or more peer
groups. He or she will use the operating metrics and valuation multiples of the public comparables to
determine an appropriate valuation multiple for the private company.
• Select your group by similar industry , business

• The control premium a buyer and financial characteristics.
typically pays in an M&A is not • Find financial forecasted information when
consensus figures are unavailable.
affected
• The discount the public markets
may apply to newly issued
shares from an IPO.
Comparable company assessment
To compare comparable companies

effectively, you must understand why their
multiples are different. Possible reasons are
slower projected growth, declining margins, or
higher risk. Although metrics such as growth,
margins, and risk are not explicit inputs to the
EV/EBITDA calculation, they are implicit in
equity value, which is a determinant of EV. It is
often useful to compare one company's
multiples to those of the peer group,
collectively. To do so, calculate the high, low,
mean, and median summary statistics for the
group. The median is generally the most
meaningful metric, because it naturally
screens outliers.
Things to watch out..
Multiples will generally go down over time since the denominator usually increases from one year to the next,
unless business is declining.
Revenues of healthy companies generally grow over time. When you see negative revenue growth, you should
investigate the reason.
Healthy companies usually improve their margins over time. When you observe strong year-over-
year revenue growth concurrent with margins that decline from one year to the next, you should check that your margins are
calculated properly and that their computational inputs are correct.
When the denominator is very small relative to the numerator, extremely large multiples can result. Such might be the
case when calculating the P/E multiple of a nascent high-tech company with little earnings but high growth and lots of potential.
When an output value is very large relative to the peer group, try to determine the reason, mark the multiple as "NM" (not
material) in your spreadsheet, and exclude the outlier from the calculation of summary statistics.
Valuation Method
70
Valuación DCF
¿Por qué valuar una empresa?
•
DCF Valuation
Overview
Representa el valor presente neto (VPN) de los flujos de efectivo proyectados disponibles para todos los proveedores de capital, neto del efectivo
que se necesita invertir para generar el crecimiento proyectado. El concepto de valuación de DCF se basa en el principio de que el valor de un
negocio o activo se basa intrínsecamente en su capacidad para generar flujos de efectivo para los proveedores de capital. En ese sentido, el DCF se
basa más en las expectativas fundamentales del negocio que en los factores del mercado público o los precedentes históricos, y es un enfoque más
teórico que se basa en numerosas suposiciones. Un análisis de DCF arroja el valor total de una empresa (EV), que incluye deuda y capital.
Tasa de Descuento Valor Terminal Flujo Libre de Efectivo

Conceptos Generales de Valuación
Principios básicos de proyección de flujos
• Las decisión de qué proyectar siempre está basada en los flujos

de efectivo. No se basan en conceptos contables, como los
ingresos netos. Los costos y beneficios intangibles a menudo se
ignoran porque, si son reales, deberían dar lugar a flujos de
efectivo en algún momento.
• El timing de los flujos de efectivo es crucial.
• Los flujos de efectivo se basan en los costos de oportunidad.
• Los flujos de efectivo se analizan después de impuestos. Los

impuestos deben reflejarse completamente en los presupuestos
de capital.
• Los costos de financiamiento se ignoran porque se reflejan en el

VAN con una tasa de rendimiento requerida.
Valuación DCF
Errores Comunes en las Proyecciones
• Crecimiento en las ventas fuera del comportamiento • CAPEX y Capital de Trabajo incosistente con el
histórico y las expectativas del futuro cercano potencial de crecimiento de la empresa
• Márgenes no coinciden con el modelo de negocios • Caja negativa
• Proyectar beneficios fiscales que no son sostenibles
• Proyectar ingresos o egresos que fueron
extraordinarios en periodos anteriores
• Factores de descuento mal calculados

• No cuadran los EEFF
• Partidas virtuales no consideradas
• Cálculo del FCF
• Movimientos que no generaron Cash
74
Valuación DCF
Consideraciones Adicionales
Basado en Flujos de Efectivo Depende de Proyecciones Financieras

Resulta un valor más fundamental de la empresa respecto a Complejidad de pronosticar escenarios reales, especialmente si el
otros métodos horizonte de proyección es demasiado largo
Independiente al Mercado Alta Sensibilidad a Factores Clave

Los resultados se mantienen más aislados ante situaciones La valuación puede variar de forma relevante ante pequeños cambios en
irracionales o temporales de mercado los supuestos considerados para la proyección de FCF
Método Suficiente Valor Terminal

A diferencia de otros métodos, el DCF no está sujeto a la El valor terminal pudiera representar una alta proporción de la valuación,
disponibilidad de la información de empresas o transacciones lo cual disminuye de forma importante los resultados del periodo de
comparables proyección
Flexibilidad Asume una Estructura de Capital Constante

Se pueden determinar un rango de valuación estimando diversos Esta metodología muestra baja flexibilidad ante movimientos en la
escenarios de acuerdo a diferentes supuestos sobre indicadores estructura de capital en el periodo de proyección o incluso en años
clave posteriores que están capturados en el valor terminal
75
Caso de valuación
Case study
Kavak
Kavak (kavak.com) is looking for financing in order to grow the company. Kavak is
raising $15 million USD in exchange for 30% of the company's equity post-
investment (ignoring their recent fundraising announcement).
Pre-money valuation : $35M
Ludovic Prades
Ludovic.prades@edhec.com
Table of contents
I. Analysis of Kavak
II. Industry and environment analysis
III. Valuation
IV. Investment recommendation
Notes:
• All references, sources and rationales used for this document are detailed in the attached XLS file
• All values are in $ USD
I. Analysis of Kavak
Kavak is the online platform that offers an exceptional experience of buying and selling used cars
The company was founded in 2016 in Mexico and currently operates only in Mexico City. It is known for having closed one of the largest seed round in Mexico
Kavak has built a robust operating model supporting its two … and it has an attractive business model it can leverage
value propositions...
Kavak provides its services to buyers and sellers through an 1 2

Cash benefits Good margins
online platform (web & app)
Operating model • Up to three payment options giving • Kavak’s average take is 11% per car it sales
Kavak room to adjust cash flows through its platform
• This allows the company to leverage • High average ticket. This enables greater
• A seamless digital experience
high-rotation cars to build up cash contribution margins
• A quality assessment of the cars (240 points evaluated, 30%
and re-use it for growth • Kavak is above the 8-9% margins between
approval rate)
manufacturers and dealerships in the new
• A cost-efficient structure without any salesmen and sales
cars market (note: those businesses are not
incentives
fully comparable, but there is little public
• A propriety algorithm allowing for fair pricing on both sides
data on comparable players’ margins)
Buyer value proposition Seller value proposition 3 4
• Good price (Kavak’s lower A lean cost structure Ancillary revenues
• Good price (Kavak’s lower
cost structure + pricing cost structure + pricing • All processes are partially or totally • Kavak has partnerships with BBVA and
algorithm) algorithm) digitalized, thus reducing the Mapfre (bank and insurance companies)
• Confidence and quality • A car sold quickly and with headcounts requirements • They can then reduce the time and effort it
(guarantee, trial period, little frictions • Kavak does not rely on salesmen, takes their clients to get a credit…
2010+ cars, quality check) • Confidence in payment and which usually eat up to 25% of the • … and Mapfre helps them offer more
• Financing & insurance up to three payment options gross profit insurance options to the buyers (e.g.
solutions for car owners (immediate, extended guarantee)
30 days or upon sale)
II. Industry and environment analysis
The second-hand car market in LatAm’s In Mexico, the competitive landscape is unstructured and fragmented, even though a new generation of
major urban areas is very large and growing players is emerging and classified ads websites have a strong presence
Total value of second-hand cars sold in the # second-hand cars • People rely mainly on their network or Historical dealerships
1
period (Bn $US) sold in Mexico in Through classified ads websites to sell their network in Mexico
60 2018, by channel historical cars
53
47 48 49 50 51 52 (millions) dealerships and
• Only ~20% of second-hand cars are • 650-800 dealers spread across Mexico
50 new players
going through more established • Operate differently and independently from
40 channels one another
C2C (of which an
4.52 • There is room for several players to • Sub-optimal digitalization (e.g. online
30 unknown share is
going through concentrate and structure the market, catalogs)
20 classified ads as experts estimate the largest player • Price and quality of the cars can vary a lot
11 11 11 12 12 12 12 websites)
1 to have < 1% of total market value
10
32 32 32 32 32 33 33
- 2 New players and classified ads websites in Mexico
2019 2020 2021 2022 2023 2024 2025
Name Description
CDMX MTY
• Online platform buying used cars. They then sale it through an Auction process attractive for both Auction process might end up
GDL Other major urban areas in LatAm
Carmatch auctions system that can also be used for cars they do not own parties being time consuming
(Sao Paulo, Rio de Janeiro, Buenos
• Partnership with a network of dealerships Footprint with the partnership No guarantees for buyers
Aires, Lima, Santiago de Chile,
Bogota) • Online platform buying used cars Presence in 10+ cities No solution for buyers
Vendetuauto
Online quotation
• Driven by solid population growth in urban areas • Online platform connecting sellers and buyers (they do not Financing and insurance No guarantees for buyers
and sustained economic growth, the second- Wanacar invest in cars) partnerships Delay to sell the car
hand car market is set to reach $70 Bn by 2025 in • Provides services to existing dealerships
Latin America’s nine major urban areas • Online platform connecting sellers and buyers (they do not Sellers do not need to stop using Sellers are paid upon sale only
Tipitop
invest in cars) the cars while finding a buyer Guarantee is 2% additional fee
• For the top three Mexican cities only, this
• E-commerce marketplace where dealerships and individuals Large selection No guarantees for buyers
market will be growing at a ~2.2% CAGR by 2025, MercadoLibre
can sell their second-hand cars Online booking refundable option Vehicles are not checked
to reach 18bn$
• All-category classified ads website Large selection No guarantees for buyers
SegundaMano
Vehicles are not checked
III. Valuation
Under a regional expansion scenario, Kavak could be A $35M USD pre-money valuation round looks attractive as the estimated valuation is
generating a yearly GMV of ~1 Bn$ by 2025 ~$77M USD
Kavak's forecasted GMV per country ($US Mln) 1 DCF*

1,200.0
1,015.3 PV Cash flows PV Terminal Pre-money
1,000.0
$US Million 12 value 68 Valuation 60
755.8
800.0 $US Million $US Million
600.0 543.1 2 EV/GMV in 5 years (Uxin)*
359.8
400.0
208.0 GMV run-rate EV/GMV Pre-money
200.0
50.3
109.7 $US Million 1,015 multiple 6.6 Valuation 115
-
$US Million
2019 2020 2021 2022 2023 2024 2025
3 EV/GMV in 5 years (Carvana Co)*
CDMX, MTY, GDL Sao Paulo, Rio de Janeiro BsAs, Lima, Santiago, Bogota Total
Kavak’s GMV will grow at a 65% CAGR by 2025, driven by GMV run-rate EV/GMV Pre-money
market share increase in CDMX, the opening of eight new cities $US Million 1,015 multiple 1.2 Valuation 22
and an overall growing market $US Million
Kavak's EBIDTA margin (as % of GMV)

11.00% 8.83%
8.30% 9.21% 9.34% 9.48% In the light of these
9.00% 9.42%
7.54%
estimated valuations,
7.00%
2019 2020 2021 2022 2023 2024 2025
the $35M pre-money
proposed valuation
Kavak’s EBIDTA% will increase by ~200 bps by 2025, driven by looks attractive
improved pricing and limited growth of G&A expenses
*For more information please refer to the XLS file
Legend
1: Macro economics 4: Company economics
IV. Investment recommendation 2: Company advantage 5: Management team Unattractive
Highly
attractive
3: Strategy 6: Valuation
Attractiveness
# Item Description
assessment
1 Market potential Combined value of second-hand car market in top 9 urban areas in LatAm is ~$60Bn in 2019 and expected to gr ow~2% CAGR by 2025
2 Competition Very fragmented market, with largest player owning < 1% m.s. in MX. There is room to consolidate but that also means though competition
2 Value proposition Strong value proposition but there is no very robust barrier impeding competition from replicating the model
2 Scalability Lean structure and high-rotation vehicles can help scale. However, building a large catalog requires important working capital
3 Partnerships BBVA and Mapfre partnerships brings good value to Kavak’s customers
3 Ancillary revenues High potential of ancillary revenues to be generated from financing and insurance options
4 Profitability Kavak’s EBIDTA% is already high and growing, it is mainly driven by improved pricing on both sides
4 Cash flows Kavak will reach positive cash flows by 2020 thanks to an improved working capital management
5 Founders experience The three founders all have a strong track record of building teams and businesses in LatAm (e.g. Linio) but there is no tech specialist in the
and complementarity cofounders team
5 Ownership 30% stake with a $35M pre-money valuation + seed round likely means the co-founders might lack equity incentives in the end
6 Valuation The $35M pre-money valuation at which are looking to raise funds is attractive in the light of the valuation forecasted
Risks Exit scenarios
• High exposure to market and economic crisis • IPOs are likely: Uxin’s 2018 IPO (car e-commerce platform in China), was a success and so
• Larger players enter the LatAm market with similar solutions was USA’s Carvana, another car e-commmerce, in 2017
• Fragmented market also means though competition • Selling to a competitor: since its IPO, Carvana has bought two competitors in the US
CONCLUSIONS
• I recommend that XXX invests in Kavak’s next round, at the proposed $35 pre-money valuation
• This high growth company would be a good fit within XXX portfolio
• Given DC’s investment theory, the ticket should be in the $1-10M bracket and it would be reasonable to ask for a board seat in exchange
Case study - Ver el EXCEL
Agenda

retornos
CONFIDENTIAL
The VC Industry
The story of fundraising… for VC Funds
Limited Partners • Pension Funds

X
LPs o “Investors” B A • Endowments
• Sovereign Funds
• Corporate Funds
• Family Offices
X Partners
General Partner (VC Firm) General • Insurance Companies
Y Ventures
Fund Manager Partner
Z Fund I • Bank / Inv. Bank
• Fund of Funds
• High Net Worth
Individuals
Investment Portfolio
VC allocation in
any portfolio
The VC Industry
The story of fundraising… for VC Funds
Exits ,
Makin g Dis s o lu tio n
In ve s tm e n ts an d
Liq u id atio n
At least 6 months
3 – 12
months
12 – 18 months
The road ahead… 4 – 6 years 4 – 6 years

Everything he
needs…
Limited partnership agreement Subscription agreement

CG Fram e w o rk
Financial model
Investor’s pitch deck
Private Placement
Memorandum
Qualified investor questionaire Side letters (if applicable)
The VC Industry
Mechanics of PEVC Funds: the J-Curve Effect
• Negative flows are a characteristic of PEVC funds in early years, resulting from capital calls, management
fees and investments.
• As the PEVC generates value to its portfolio, it ultimately translates in more money generated for each
potential exit; flows reach breakeven and then turn positive as investments are exited.
The VC Industry
How do they make money? The answer is…Diversification!
Deal Number Investment ($5MM) Return
2 $10M 0x $0.00
4 $20M 0.5x $10M
4 $20M 1x $20M
3 $15M 3x $45M
5 $25M 5x $125M
2 $10M 12x $120M
Write-off Write-down 1 - 1.9x 2 - 4.9x 5 - 9.9x > 10x

PEVC Fund Anaytomy- ¿How do Funds Work?
PEVC Fund Anaytomy- ¿How do Funds Work?
Investment Thesis Rationale
Preface
External Forces
Country mapping, fiscal and
regulatory compliance, cultural
sentiment
-
The variables behind the
Impact to the Investment Thesis

AUM, market growth, investment
vehicles, volume and quality
Investment Thesis
Attractiveness, development and

competitive assessment, PEVC
market share,
Business review, metrics framework,

front and middle-end fund framework
Intellectual, physical, economical,

human – The “Why-us” rationale
Limited Partnership Agreement, LP
Base, Investment Committee, Back-
end services, termsheet +
Internal Forces
92
Investment Thesis Rationale
Building the framework… ≥ Sample Long Term Trends
≥ Population changes
≥ ≥ Compliance and risk management
≥ Long term trends ≥ Demand / Supply shifts
≥ Market size & breakdown ≥ Environmental sustainability
≥ Market growth and its drivers ≥ Aging infrastructure
≥ Industry dynamics
≥ Sample Business Model Characteristics
≥
≥ Sustainable and scalable
≥ Business model characteristics Asking the real questions
≥ Map the market & value chain ≥ Differentiated strategy
≥ Addresses key pain point The Investment Thesis is an ≥ Recurring revenue
≥ Do targets exist? overall set of beliefs a fund uses ≥ Attractive exit alternatives
to determine whether or not to
≥ make a particular investment. A
≥ Low customer concentration
≥ Timing impetus fund’s Investment Thesis ≥ Opportunities for operational improvement
≥ Market impetus provides a written guideline of ≥ Entrenched customers (e.g. stickiness)
≥ Path to invest when to take an action and why.
Having a clear Investment Thesis ≥ Defensible position/barriers to entry
≥ POV on market evolution
helps investors establish goals ≥ Profitable and positive cash flow
≥ for their investments and
≥ Operational value adds ≥ Operating leverage
measures whether those goals
≥ Other value adds? are being achieved. ≥ Minimal adoption risk
≥ High value proposition
93
≥ The offering ≥ Responsible investment
≥ Investment objective ≥ International scope
≥ Investment strategy and ≥ Industry impact
rationale
≥ Sourcing capabilities
≥ Co-investment
≥ Risk management
≥ Investment vehicle and
security structure ≥ Value creation
Investment ≥ Stage and potential ≥ Disbursement management
Thesis
≥ Sustainability ≥ Lp compliance?
Rationale
Building the ≥ Investment size ≥ Restrictions on investments
framework… ≥ Follow-on investments ≥ Limits and quotas
≥ Business review ≥ Gp deal recognition
≥ Investment term ≥ In-house vs. Outsourced

operations
≥ Corporate governance
approach ≥ Investment round leadership
≥ Exit opportunities
94
Investment Thesis
Building the framework…
01 Capital to support expansion initiatives 05 Do’s and do not’s | “Getting things

(CAPEX, OPEX, WORCAP)… done” | Know-how
02 Systems integration | geographic 06 C-level for hire | Accounting services |

expansion | strategy prioritization Office space |
03 Management resources to secure next- 07 Key accounts | Government |

stage growth Commercial relationships
04 Strengthen balance sheet | Capital 08 Board of directors | Incentive alignment What can I do?
budgeting | Rules of the game planning
95
Investment Thesis
Case Study ≥
≥ The way we work is changing
≥ We need fundamentally better tools to free up time… so we can live
Industries that invests in:
≥ In that free time, we have an opportunity to consume more ≥ Enterprise
experiences
≥ Hardware
“We want to be the first call for
founders who want to make history,
≥ ≥ Consumer
and to partner with them as company ≥ Every business is now a tech business ≥ Fin-tech
builders in pursuit of that goal…”
≥ Vertical SaaS giving away to new business models
Founded: 1972
Number of Investments: 1,080 ≥
Number of Exits: 281
Total Funds: 17 ≥ Urbanization is transforming how we live
Funds raised: US$ 5,200 million ≥ Wealth disparity is driving the need for financial freedom and Investment Stage:
opportunity ≥ Seed
≥ Experiences, wellness and asset-lightness are becoming the focus ≥ Series A
≥ ≥ Late Stage
≥ Private Equity
≥
≥ Open systems are used against us
≥ Who will matter more than what
≥ We need to shift the economics of the bad guys
96
Investment Thesis
Case Study
“We want to be the first call for

founders who want to make history,
and to partner with them as company
builders in pursuit of that goal…”
Founded: 1972
Number of Investments: 1,080
Number of Exits: 281
Total Funds: 17
Funds raised: US$ 5,200 million
97
The Culmination of the Investment Thesis
Private Placement Memorandum
≥ ≥ Type of Fund – Rationale
≥ ≥ Portfolio Strategy
≥ Geographical Focus
≥ Investment Process
≥
≥ Sourcing, screening and review process
≥ for pipeline
≥ General Economic, Legal and Political
Conditions
≥
≥ Illiquidity, write-off & asset deterioration ≥
≥ Currency ≥ Legal and Operational Framework
≥ Defaulting LPs ≥ Corporate Governance and Organizational
Structure
≥ Tax and Legal changes to framework
≥ Fiscal Considerations.
≥ Financial market fluctuations The what, how
≥ Valuation Risks ≥
≥ Conflicts of Interests ≥
and why…
≥
98
≥ Investment scope
≥ Investment proposal
clearly reflected in ≥ Key executives
the LPA: ≥ Manager removal (with
≥ Sector focus & w/o cause)
≥ Stage focus ≥ Investment committee
Things to watch out ≥ Geography ≥ Advisory board
for… ≥ Restricted sectors ≥ Exclusivity
The relation between the ≥ Alignment of ≥ Conflicts
investor and the Investment interests ≥ Alignment
Thesis ≥ Sufficient protection ≥ Team investment
mechanisms
≥ Management fee
≥ Enforceability
≥ Distributions/allocations
≥ Limited liability
≥ Expenses
99
≥ Review the PE / VC market, map the actors and get to know
them… in vo lve m e nt in the industry is .
≥ Profile your investor targets using your Investment Thesis as

synergy points.
Pre-Marketing
the Fund ≥ Identify the manager is going to partner
Preparing the with.
formula for a ≥ Fu n d d y n am ic s are crucial: do not try to create an strategy
successful that is different from what the performance or fee structure
fundraising suggests it is.
campaign ≥ Work with a fund formation attorney to create the most
appropriate fund entity structure and offering documents,
focusing on strategy and targeted investor groups.
≥ Consider which parts and how much of the overall

infrastructure will be outsourced. It can provide a cost-efficient
way to handle operations and provides an extra layer of
objectivity.
≥ Share ideas, ask for advise, talk about asset classes... be

c re ative !
100
≥ what the manager has in mind can pivot the
fund’s strategy.
≥ Do not rush and send the subscription agreement and
right away talk about the acceptance of the investor.
Marketing the ≥ Trust is often much more important to an investor

Convincing an investor requires
Fund 4 important elements: than fund performance. People want to buy from
The What, Why, people they like and trust.
How and ≥ High-net-worth individuals
Because…
▪ Their are immensely important.
▪ Syndicated investments are a possible outcome.

Operations
▪ Virality can be achieved: one investor pitched,
lots committing at the end.
Financial
track record ▪ The problem? Committing is a result of
Timing confidence and trust
Management team
101
Marketing the Fund
The What, Why, How and Because…
• Often, getting validation from someone who is • : the manager has no control
can greatly increase the over how much an investor will subscribe. Most of the
chances of success. time, the investor will throw out a “why it is not the right
time”. Instead, propose a solution of how can you
• Getting into the investor’s close circle and / or network make the subscription happen latter on.
can provide the best valid atio n o f th e m an ag e r’s
• Create a timeline for all the prospects. Prioritize and
c re d e n tials .
arrange meetings in such a way that you can clear
• First encounter to any investor: turn off your “sales out “bottle-necks”.
mode” and start your “listening and thinking mode”.}
• Keep the relationship fresh and updated.
• Appear everywhere… convince selectively.
Measuring Returns
104
Measuring Returns
105
Measuring Returns
106
Money multiples and IRRs
≥ Money multiples simply compare cash invested to cash returned – ≥ The International Private Equity
although net asset values are used for investments before they are exited Valuation (IPEV) guidelines suggest funds
≥ Money multiples do not take account of the time the money is invested should report their investments at “fair
value”, and provide some guidance on
≥ IRRs do take explicit account of the time money is invested, but can valuation techniques for arriving at fair
sometimes conflict with money multiples (especially when there are quick value:
distributions through interim dividends or quick flips)
≥ “Fair value is the amount for which an
≥ There are various different approaches to measuring IRRs: asset could be exchanged between
knowledgeable, willing parties in an
arm’s length transaction”.
≥ But sometimes fair value cannot be
reliably estimated, in which case the
investment should be reported at cost,
unless there is evidence that the
investment has been impaired
107
Measuring Returns
The Most Used Key Financial Indicators in PEVC
≥ It is calculated by dividing the fund's cumulative distributions and residual

𝐶𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑠 + 𝑅𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑉𝑎𝑙𝑢𝑒
value by the paid-in capital. It provides insight into the fund's performance 𝑇𝑉𝑃𝐼 =
𝑃𝑎𝑖𝑑 𝑖𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
by showing the fund's total value as a multiple of its cost basis. It does not
take into account the time value of money.
≥ It is calculated by dividing the fund's cumulative distributions and residual

value by the paid-in capital. It provides insight into the fund's performance 𝐶𝑢𝑚𝑢𝑙𝑎𝑡𝑖𝑣𝑒 𝐷𝑖𝑠𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑠
𝐷𝑃𝐼 =
by showing the fund's total value as a multiple of its cost basis. It does not 𝑃𝑎𝑖𝑑 𝑖𝑛 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
take into account the time value of money.
≥ The technical definition of RVPI is the current market value of unrealized

investments as a percentage of called capital. The RVPI multiple is
calculated by taking the net asset value, or residual value, of the fund's
𝑅𝑒𝑠𝑖𝑑𝑢𝑎𝑙 𝑉𝑎𝑙𝑢𝑒
holdings and dividing it by the cash flows paid into the fund. Cash flows 𝐷𝑃𝐼 =
are representative of the capital invested, fees paid, and other expenses
incurred by the limited partners to the fund.
108
Measuring Returns
The Most Used Key Financial Indicators in PEVC
≥ The PIC multiple is calculated by dividing paid-in capital by committed

capital. This ratio shows a potential investor the percentage of a fund's
committed capital that has actually been drawn down.
𝐷𝑃𝐼 =
𝐶𝑜𝑚𝑚𝑖𝑡𝑡𝑒𝑑 𝐶𝑎𝑝𝑖𝑡𝑎𝑙
≥ NAV is calculated by adding the value of all of the investments in the fund and
dividing by the number of shares of the fund that are outstanding. NAV
calculations are required for all mutual funds (or open-end funds) and closed-
end funds. The price per share of a closed-end fund will trade at either a
premium or a discount to the NAV of that fund, based on market demand.
Closed-end funds generally trade at a discount to NAV.
109
The Business Review & Quarterly Report
Key events during quarter
•
Company • Discover potential risks on time
• Detect value drivers
Performance • Enhance Company’s Budgeting

KPI’s • Review Assumptions
Estimates
vs. Actuals • Spot risks and create action plans
Strategy Identify opportunities to explore

•
Review • Advisory and mentorship

• Synergies between portfolio companies
MEXICO CITY GUADALAJARA
Horacio 1501, Polanco (Section II), WeWork Midtown
Mexico City, 11570 AV. Adolfo Lopez Mateos 95 @AVM_Mex
+52 (55) 5255 3891 Guadalajara, Jal. México, 44530
+52 (33) 3671 4121
Angel Ventures Mexico
LIMA BOGOTA
WeWork Real 2 WeWork Parque de la 93
Av. Victor Andrés Belaúnde Calle 93 # 19-55
147, Via Principal 133, San Bogotá, Colombia
Isidro, Lima, Peru +57 (310) 8055611
(+51) (960) 433 160
LUDOVIC PRADES
lprades@angelventu res.v c

Angeles Inversionistas

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ACADEMIA DE LA INVERSIÓN

Angel Ventures, its subsidiaries, the directors, employees and

CONFIDENTIAL *US dollars. As of Q1’19 4

AV Network Archetype Incubator BP-Xpress

AV-Fellows AI Magazine Investor Academy

Startup Drinks CDMX Tech-Tour

Home-vacation booking and Mobile virtual reality distributor &

Fund Size Cap (USD) $100M

Angel Ventures Term 8+2 years: 4-year investment period

Pacific Alliance Target Return 24% Net IRR | 4.0x MOIC

Fund II, LP Opportunity Up to 10% of total fund can be invested

Rental, operating and financing system for

Industry: ICT | Smart Cities Industry: BoP / |Clean Energy

B2B, global distributor of Korean beauty brands

Industry: ICT | Property Tech

End-to-end, long term property rental services

App-based mass transit mobility network that smartly

Industry: Retail Industry: Retail | Hospitality

II. Invertir en VC en directo – Angel Investing

III. El proceso de inversión

IV. Proyecciones financieras & Valuación

V. Invertir a través de fondos de VC & medir

Venture Capitalists finance emerging and highly disruptive

VCs are considered one of the best and most important

• Value is based on knowledge, not necessarily on

Formas de financiamiento de una Startup

Origen Disponibilidad Costo Montos Etapa Riesgos

PRIVATE & CONFIDENTIAL

1,141M ▪ On-demand ▪ Mobile payment ▪ Online travel

2011 2012 2013 2014 2015 2016 2017 2018

▪ On demand scooter ▪ Microlending ▪ Banking platform

…attracting top-tier international investors:

Investments by share of Investments in USD Millions

Funds raised by the Colombian PE industry by region of

Commitments within the VC segment in Colombia by

II. Invertir en VC en directo – Angel Investing

III. El proceso de inversión

IV. Proyecciones financieras & Valuación

V. Invertir a través de fondos de VC & medir

Despite being a relatively young

• Often successful entrepreneurs or

PRIVATE & CONFIDENTIAL

• Many angel provide • Often invest in multiple rounds to

PRIVATE & CONFIDENTIAL

3.4x “D” $159M

Proyecciones del inversionista • Ingresos - $52 millones

Aumento del valor del activo = $8M

II. Invertir en VC en directo – Angel Investing

III. El proceso de inversión

IV. Proyecciones financieras & Valuación

V. Invertir a través de fondos de VC & medir

• Product • How much capital?

• Forecasted Cash Flow

•Actuals vs. Forecasts •Management Team •Corporate Structure •Valuation

ESG Legal &

• Handbook for Investment

• Que te cuenten una historia…busca que el emprendedor

• Entender quienes son los genios detrás de la

• Entender el “dolor "que tiene el cliente y como se

• Entender de qué forma resuelve el

• Tiene que explicarlo con manzanas.

• ¿En qué se diferencia con ellos?

• Explicar cómo va a adquirir clientes -> ¿Qué