Internet from Venture Capitalist’s Perspective

With experience from direct investment from 1995 and 20 completed investment with average IRR 25%, Roberto Saint-Malo became a legend in Spanish Venture Capital community. Recently, Roberto founded a new venture capital company Kibo Ventures specialized in internet business models with regional focus on Spain and Latin America.

Roberto’s point of view as a VC nicely contrasted with those of RJ Friedlander from ReviewPRO, who prefers to keep company under his control without VC interference and Jorge Mata that does not believe in other value of VC than providing the funding, practically denying the “smart money” concept. Although, Roberto is an example that certain type of VC can add non-monetary value in three distinctive ways:

1. Shaping / generating the idea

2. Facilitating the business planning

3. Utilizing personal network for further investments into venture

Apart from evaluating entrepreneurial ideas, Roberto has a vision about the future of internet business and actual ideas where internet business models can change the way we do things today. Therefore, apart from funding, Roberto can also “assign” an idea to the promising team of entrepreneurs. Good business planning is often the shortcoming of many new ventures due to the inexperience of the founders. Good VC does not reject the business plan, because of its shortcomings, but use her expertise to improve it together with the entrepreneur. Finally, should the business grow beyond funding possibilities of Kibo ventures or become “too mature”, Roberto can help to attract other Angels or VCs to invest thanks to his personal network.

Moreover, typical Kibo ventures investment cycle takes only 8 weeks in comparison to 4-6 months in the VC industry. There are three types of investment Kibo engages into:

1. Proven model optimization

2. Early stage investments

3. International opportunities

In proven model optimization, Roberto invests either to a regional copy-cat of proven idea that successfully works elsewhere or to optimized version of existing idea. Early stage investment, comprise of investing into a brand new idea. In this type of investment, Roberto wants to be involved as early as possible typically providing seed investment with option of further funding. International opportunities consist of co-investments with other VCs to ventures they revealed while keeping the personal network alive, which later helps make them invest to Roberto’s projects.

Now is time to reveal the secret. What are the criteria Roberto uses to evaluate investment opportunities? Here they are:

• Right DNA / character / drive of the entrepreneur
• Great team
• Low capital intensity at the beginning
• Short-term value path + large market opportunity
• Proven / clear business model

Apart of that, bias to action is vital. At the end, it is not about what you think, but what you do. Entrepreneur’s track record is often mentioned as key criterion, however examples like Mike Zuckerberg are strong cases against the track record. Therefore, it is possible and increasingly common to invest to 22 year old entrepreneur, who has the right character qualities and drive. Interestingly enough, doing an MBA or working in big companies might distract you from developing the entrepreneurial skills. Roberto recommends not to put your dreams on hold. Act now!