"The most important thing for an entrepreneur is to understand that you don't know it all"
Israel Pons on free vs paid mentorship, comfort level, setting growth KPIs, structure in coaching sessions
Israel Pons, President of WBAF Angel Investment Fund, joins (JP) Jeffery Potvin to talk about free vs paid mentorship, comfort level, setting growth KPIs, structure in coaching sessions, failures, entrepreneurship, and his investment process.
CEO and Co-Founding Partner of Angels Nest LATAM, Angels Nest is an Angel Investment Network operating in Mexico and LATAM. It has been named “One of the most active Angel networks in Latin America” by XCALA (part of the Interamerican Development Bank). Angels Nest have many Angel Investors from Latin America, Canada, United States and United Kingdom.
Co-founder of Pitch at the Beach a global startups and investors event taking place in the most beautiful beaches around the world. More than 38 countries take part.
President of the WBAF Angel Investment Fund ($100Musd).
Senior senator for Mexico at the grand assembly of WBAF (World Business Angel Forum).
Partner (GP Assigned) in BillioNeurons USA based, it is a global investment fund focused on the AI industry. ($1Billion usd)
President of the Board of investors in “E-Uno” a VC fund based in Mexico and investing in the Agro-tech industry. ($20Musd)
Investor and advisor to Canadian fund, Brickhouse Ventures Ltd, invests in eSports, Sports and Entertainment Technologies. Listing companies in the Stock market in Canada.($100Musd)
Board advisor in Blue Forward Bio-marine (Blue sea economy) VC fund based in Luxembourg. ($300Musd).
Ambassador to Deal Gateway (Largest Family Office network) with presence in more than 35 countries and multi-industry portfolio.
Israel developed his academic and professional career during his 24 years in the UK, where he served 5 years as Operations Director for the largest leisure company in Europe, he became an entrepreneur and founded 4 companies in the UK, 3 of them were sold successfully. He became an Angel Investor and resides in Mexico.
Israel is Head of the Global Investors Department, WBAF Business School
He has given many conferences in different institutions such as universities, forums, exhibitions, innovation agencies amongst others; speaks on a varied related topic like entrepreneurship, innovation, Fintech, cross-border angel investing and crowdfunding in more than 12 countries.
* Israel has delivered training workshops and full courses, some of the subjects are:
- Investment readiness
- Become a Certified Mentor
- How to become an Angel investor
- How to make an Impactful Pitch
- Legal structures for Angel Investors and VCs
- How to conduct a valuation on a start-up
- Crowdfunding and running a campaign to raise funds
- Crossborder Angel Investment
- Social Impact investing
- Sustainable business model for social entrepreneurs
- How to manage your investors (Angel,VC,Family office)
*Methodology delivered to more than 400 trainees from 32 countries
Israel believes that “Angel investment is about people and values and not just about money”.
The full #OPNAskAnAngel talk
All right, Israel, thank you very much for joining us today. We like to move quick, so we’re going to jump right into things. And the best way for us to start is if you can share a little bit about your background, um, you know, the times that you spent building companies to all the way through everything from the beginning, I guess a little bit of a background and then kind of where you’re at today. And then one thing about you that nobody would know
Great, great, um, well, like, uh, as, as the audience have probably heard, I’m a mexican that was born and raised in Mexico in my young years.
Um, and eventually, all my professional life, I had the pleasure living in the UK for 25 years, uh, first eight years in London. So pretty much as most immigrants, like we all are, we end up working in an industry that we just fall into it.
It was the leisure industry, and I ended up working on my way from cleaning floors to being the director of expansion for the whole of Europe, for the number one company in the world on leisure entertainment. So uh because of that I thought okay yeah if I’m very good at doing things for a company with somebody else, maybe I should try it myself. So I jump in into being an entrepreneur. Little did I know that it was going to be one of the most uh hurtful and exciting times and I have never stopped since.
So I put three companies together in the UK. As an overall. Uh Two of them were fantastically, well uh made my ego grow even bigger on decision making and thinking that everything that I touched turned into gold and eventually on the third one, every single decision that I took of my own went wrong, I didn’t have a mentor, didn’t have an advisor, I thought I could do everything right. As most entrepreneurs, we think failure due to or ego.
And that company took me into a bankruptcy. So that was uh, lost. Absolutely everything was a great experience, something that trying not to repeat. And I think if there is a place where you can go on bank and bankrupt is in the UK, the English know how to do it really well anyway. And due to that, being an entrepreneur, I had some, you know, never stop having ideas, which is what entrepreneurs have tons of right, especially on a friday night after a few drinks in bed. And so I had two friends of mine who acted as angel investors and they invest together with me on a new project. It did pretty well and that’s how I got involved in angel investment. Somebody saved my neck,, invested in me.
They met me and they believed in me and eventually we did well. So I kept working and doing other things. But when I came back to Mexico, I thought angel investment is something very, very important to try and develop more in not just Mexico but Latin America, right? So close to the U. S. And Canada, you know, for our flight, but so far away in terms of, uh, entrepreneur legal systems. And yet, you know, we had a great opportunity to do and cross border, uh, doing a lot of things together that we just don’t seem to be able to do it.
And it’s just the differences between ecosystems. Uh, you know, these miles between one and so that’s a little bit of me, what people don’t know about me and I’d like to share. There are two things don’t just one. One is obviously they’re not going to know that when I was eight years old in order to buy myself a toy that my mom told me that I couldn’t buy in the supermarket. She offered to finance my entrepreneur idea of selling jelly in the streets of Mexico to buy myself a toy. So my first entrepreneurial experience was at eight years old, standing in the street corner Selling Jelly for 50 cents of every paso and uh, smiling white smile very well to uh, hair brushed and everything because I knew that most of the ladies that will work in the office is nearby will buy you buy a smile because as a small kid, that was a good looking kid later on, everything went wrong. But I sold enough to be able to buy my toy and some more. So that’s one thing and the other one is, um, I’m surrounded by, uh, I’m a minority at home.
I got five daughters and my wife and, uh, so, uh, in terms of gender equality is something very high on my personal agenda as it were and everything I look at, on entrepreneurs, central investors, everything.
That’s amazing. And I love the story of, uh, when you were a kid, uh, those stories always resonate because when we were doing talks with a group of high school students coming up and one of the whole line was that you’ve been an entrepreneur and you didn’t know it.
And I think a lot of people forget that they’ve actually done a lot of things to make money when they were kids.And I think that’s a really good start to kind of think about, wait, maybe I have been able to do this and I did this when I was a kid and you totally forget these little things you did to win and that’s a great story.
Yeah, yeah, that’s right. And what I, I don’t remember that and my wife tells me that, you know, as a kid, she used to go around during the newspaper rounds, right or going to wash the neighbors’ cars and uh, that’s an entrepreneur. You’ve given, given a solution and, and you getting some money in exchange for it and you get somebody a customer that’s really happy and be able to get you to wash their car the following weekend or to deliver the paper right. When in those times when there was paper rounds
For sure, why did the same when I had paper routes as a kid did lots of stuff like that, I would disappear for 5-6 hours to deliver a paper, wrote, it took me 20 minutes but I just enjoyed the walking around and doing things.
But it does remind me of when I think it was maybe our 50th show. My parents decided they wanted to come to see what I did and what we were running. So they showed up and then I had to kind of tell the crowd that my parents were there. But when they were coming in my mother said did you know that when you were a kid you took your dresser and you put your dresser in the closet and I said no.
She’s like yeah and then I would come and move it out and put it back in your room and then you’d stick it back in your closet. She’s like, I had no idea, I don’t know why I did it, but you couldn’t stand things in the room, you just wanted lots of space. And she said, what you actually invented was the closet organizer and you put your dresser in there to organize everything. And I was like, wow, why didn’t we turn that into an idea? Look how big that is now? She’s like, I know in hell and uh, little stories like that.
So they make you reflect on the things you did as a kid, right? Like I’ve got a million other ones that are funny, but it is fascinating how much of an entrepreneur is created as a kid. And when we get into this strict regime of, I need to be this grow up to be this, that you forget about all of these intuitive, innovative things you did as a kid that actually could have turned you into an entrepreneur sooner faster, quicker.
And some of that comes down to and you talked about this in a lot of the materials and a lot of the keynote stuff you talk about, which is on how mentoring works and being able to mentor these young startups, but I wonder if you find that this is actually something that could go even further back and start mentoring teachers and start mentoring parents so that they can start to see these skills that are buried in these kids, so that they will actually utilize those as energy to drive forward instead of locking them away and finding them 20 years ago, 20 years later when they’re trying to build a company and think they have no idea what it takes to be an entrepreneur.
Yeah, and I think the skills of being a mentor or learning how to be a mentor a paramount, I think quite right.
You know, nothing prepares you for parenthood, nothing prepares you to be able to teach children right? You learn. I mean everything that is in the books that tells you how to teach children. And I see that at home because my wife is a teacher, right? So she’s uh, you know, I can see a lot of the stuff but that she was an entrepreneur with me at one point in the UK, we had her own businesses and so she has gone through it, she knows what it’s like to lose everything, she knows what it’s like to, uh, you know, to identify the key points on, on the kids that talk about entrepreneurship. So that’s, you know, she teaches businesses, so business lessons. So that class is amazing, could actually think they’re going to benefit from somebody having been an entrepreneur, investing her money and then making money and then investing money, losing money, but trying absolutely everything. And those kids do right to my wife saying, you know what you were the best lesson, some of the advces you’ve given us were taken into university and they’ve done pretty well. So I do think the skills of mentorship, it doesn’t mean that you have to mentor another businessman or businesswomen. I think mentoring and and nurturing those skills from uh kids is amazing because you’re quite right, you and I where are they doing orbits enjoying the freedom.
But also we were able to talk to people and sell them a product without any issues. We had no innovate inhibitions at all. Eventually later on you do and you start spending all this time knowing or thinking how is it that it’s not gonna work? Actually what you are working with is that your ego makes you think that you’re gonna fail and uh and you want to be perfect and when you’re a kid you don’t mind not being perfect, you just want to go and do it right? But yeah, I mean I would have been, I think I would have been a continuous um entrepreneur in my early age, have I not been then been thought that you have to go and find a job. Nothing wrong with that. But then you have to be an employee, but then you have to eventually save money if you ever can, and then and then your life is planned out for you, right?
So there is not mentoring anybody that can come to you and say you know what, you can do whatever you want, as long as you don’t hurt anybody, you know, you can dream it.
I love that. And how do you, how does a startup or even someone in high school university, how do you think that they should engage with mentorship? It’s kind of something new, right? It’s like a life coach, what makes you decide I should go and do something like this? Is it? I feel I need to be more mature, so I’m going to find someone that can educate me and give me business acumen. Like what is the driving factor where people just think this is, you know, and I don’t think people want to think this, but wow, this is really tough, I need somebody that has some, you know, back experience in this to help me out.
Is there some signs that you can kind of share that would say, you know what, you don’t need anything, just as soon as you’re gonna start something, find three people that know what they’re talking about and start working with them right away that’s going to help you going forward. Is there some sort of mechanism or program that you kind of get people in that train of thought that says, I really do need to look for help and not be afraid of it.
I think, you know, some of the bits that are normally do on courses that I gave, especially qualified mentorship and I want to tell you Jeffrey, I went into this in the past two years after as an angel investor seeing the terrible advice that some of the entrepreneurs that we have invested were looking into investing in. We’re being given by so-called mentors, right? And mentorship for free, which is so dangerous. And I mean free with people who actually have been trained to become mentors, right?
And you touch in a factor, you said a word there that is very, very important to identify. He’s like you need a life coach or you need a business advisor, you need a mentor. I like to think that a mental complaint, all those roles at any, at any point in time in the life of somebody. So what was the most important thing for an entrepreneur is to understand that you don’t know it all.
So uh and entrepreneurs, the first thing that we think that we do, that we know it all. Then we know business model, we know what we’re gonna do because everybody out there, all these webinars that we’ve got to all these uh entrepreneurs leadership, they’re always telling you believe in yourself, you can do it, don’t listen to people go 100 miles an hour, go for it.
Actually telling you don’t listen to the advice that you get right. And then you get the other leaders saying actually, you know, you’ve got to listen to it, listen to every little bit, little bit piece of advice and then, well, you got to listen to the quality of the advice, right? I think that’s what, yes, listen to the advice, but listen to the quality and the best. And, and, and also be very careful when, when, uh, as an entrepreneur or was an angel investor, if you’re entrepreneurs looking for a mentor for a mentor who actually has time to mentor the entrepreneur, it might be that is not that good or she’s not that good. That’s why they have time to do it right. Because anybody who’s worth two cents out there, they’re actually really busy and they already have two or three people that I mentor.
I don’t believe that mentors can actually mentor more than two people at a time because you need to focus into what advice you need to give and you as an entrepreneur or angel investor even, we all need to have romantics. You should analyze what you want to mentor before you don’t need a friend, right? Because that’s the wrong thing.
You need somebody who’s going to tell you the way it is. And, and also to question what you think.
You made all of that is very valuable, but you made 11 point that really stood out and you said you don’t need a friend and I want to kind of explore that because I think it’s in our innate ability that when we start to engage with somebody, we go to thinking that we need to be friends with this person and not looking at what I’m actually working to get out of this.
And I think that that’s where the most valuable piece of what you’re saying is that don’t treat this, that your friends treat this as this person is purely business and they’re trying to guide you and help you and they need to push back against the things that you’re doing. You need to be able to share raw data, when you do sit in that room and talk about it with board members or anybody else, they’re gonna jump all over you and they should jump all over you, Everything shouldn’t be rosy, and this is amazing, great job out of the back and you’re like, wait a second, I just lost $2 million. How is this rosy? Uh you do need to push back and you need your coaches and your mentors to be able to take that same approach and it’s that hard love approach and it’s business versus I’m building this and I’ve got some friends that are really helping me.
I think that that’s the total opposite and you should be flipping in and out of coaches every year to every two years because you need that advancement, you need that push and you don’t want the comfort level. Is that a fair statement?
I think you have, you have touching something very, very important. The comfort level and the comfort level is when we hear what we want to hear, right?
That’s a comfort level. So you always been told you are good, everything is going to be rosy, don’t worry, keep doing as part of the entrepreneurial pick and throw ups and that’s not right. You touch also in something that I would like to expand a little bit more. You need to have a structure of meetings with your uh with your mentors. It’s something that I talk on my uh on the certification courses that I do this like but you need to put a time to it, you need to put a place and you need to put KPI s that you’re gonna talk about and your mentor has to come to you and say hi how are you doing?
And forget about talking the 1st 10 15 minutes. How is your family? How is your health? How is everything else because you know each other already So go straight onto the points.
Acts you mentored to drill you right to make you think to say this is the KPI s that I have to measure because I need to make sure growth and growth can be measured the impact that you create with your project. Growth can be measured on cells, growth can be measured and different things. You said the KPI is with your mentor and that’s what you took for an hour, nothing else. Right. Innovation a little bit but just just feel like you’re being drilled and make make yourself think where are you going with, what you are doing and and what you need to change right? If you want to have a coffee with a mentor you can go to Starbucks and sit there and talk to the guy next on the table next to you and you know there’ll be a friendly coffee I say to the mentors never meeting in starbucks. They just distracting elements everywhere. There had to be, we need to professionalize mentoring and not just in the way that’s delivered but also in the structure that it is delivered because then entrepreneurs will take it more serious and you will know that some of the advice that you get of, what the way that it makes you think it will go a long way to, to, to be able to take better decisions with your team, with your investors, with the board that you have to respond to, because you’ve got those KPI s with your mentor all the time.
And I love that because what I think that does as well as taking the, putting herself into a business atmosphere, it creates focus, but it also creates accountability and I think to your point and to another investor that I was speaking with a couple of weeks ago out of Montreal, he was on how boards should work and how programmatic they need to be and how they need to be a lot more stern and they’re not there to be your friend there, there to punch holes, but give you the guidance to get you to that next stage. And I think coaching is pretty much the exact same structure, its accountability for you because really when you’re at the top, you don’t really have anybody else accountable.
So you need to force yourself into that accountability position, which is someone’s got to be your boss or I want someone to be my boss, so I need to report numbers, I need to report in. And those are the types of things that can really help you strive to hit new goals, but also build goals and plans that people can all get behind.
And this is very important because one of the things you just mentioned, it gives you a structure, right? And and and and one of your guests was talking about how do you behave in front of your board corporate governance?
How you run a meeting and actually having a set up meeting rules with your mentor helps you to prepare yourself when you actually deliver uh those reports to your board, to your investors. Right? And so even without doing it with a focus of actually, I’m gonna learn how to present or how to behave or how to run a board meeting as an entrepreneur or CEO or managing director of the company that you will be, or the leading entrepreneur working with your mentor on on this professional basis.
It trains you to be able to do it, right? So it is amazing, but actually, and I say to the mentors when or the people who want to become mentors is you need to keep this structure because you need to prepare the entrepreneur to be able to report to have corporate governance. It’s not just really in a list that this is what you need to do, this is how you call the meeting, this is where you know the role of everybody sitting around the table. This is how you take the minutes now, it actually you need to put into practice during your mentoring sessions so that the entrepreneur feels comfortable, gains confidence on how to do it. I’m talking about the numbers and how the numbers can go wrong and can go right and what to do and where are you going with this?
Right. But it is, you know, sometimes such people, it’s just second nature without us knowing that actually is within ourselves to be able to do this with entrepreneurs and the mentors that the mentors can be key for a person to be a successful entrepreneur.
I love it, it’s creating patterns and you need to create strong patterns so that your, you your mentor and your business can all kind of move forward in the right direction.
Now kind of taking a step back from that, you’ve obviously learned built and shared a lot around How coaching and mentoring could be really valuable to a start-up to a business and as it grows at any stage.
Um now, if we go back to kind of your earlier career where you were working, building out your own companies, I think there was 10, 11 years where you had three companies, um really focused on building, up, selling them, going through the trials and tribulations of a company, how much of that experience is really turned to what you do today? Obviously you moved into investing, you started working with all these companies, mentoring coaching, how much of that learning did it just kind of hit you and say, man, I can’t be the only one facing this problem. I really need to dive into this more and figure out how I can turn this around and help others not hit the pitfalls, or hit the troubled areas that I went through, as you mentioned when you went through that last trouble in your last company.
Yeah, I mean, I was talking about the uh, tribulations that I passed with, you know, with a company where, uh, I went through losing absolutely everything, and, and I always talk about it on the, on the conference is one of the things that happens to us, and, and in my experience is that you try to forget the failures pretty damn quick, and you try to forget what you learn from your failures pretty damn quick.
Because as human nature is, you just want to be positive, you just want to talk about good things, and now everything is gonna be great, and we’re all gonna come out of this uh covid 19 being better people, better humans, never mind that that that that we will probably want, and we still have to learn a lot more. So that’s one of the most difficult things that I think it happens to me when I see uh, the entrepreneurs are making mistakes, and I remember that I used to make those mistakes, right?
The most uh common mistake that I see is the wall of silence which I did as well, you know, stop passing information on, because you just feel the shame because you just I don’t want to give bad news because you just want to keep thinking about something positive. So, the Wall of Silence on behalf of the entrepreneurs is something that I see that happens a lot.
On the wall of silence even happens when, when you, when they’re pitching the project to you right, is like they talk to you about absolutely how everything is rosy and it’s gonna be fantastic if you invest in their project. But you think, okay, so what is it that you’re not telling me? Uh, because obviously, you have seen other investors, I’m not the first one. There is a reason why you’re still pitching and you’re still going and it’s not just to gain confidence on how to pitch in front of investors.
So I think the wall of silence for me is the biggest, uh, resonates the bigger with my experiences. And then what happens, The rest is just details. Why didn’t you managed to cast cashflow? What happened? What decisions are you taking, how you taking your decisions? Because you think you’ll be taking it on your own, then how am I going to help you to take the decisions? Because all the decisions are taken on my own. I can tell you 99% of them, you know, I hit the wall and it hurt me hard.
So because I didn’t evaluate anybody else’s point to be on my on me taking decisions. There are certain decisions that you take. Like sometimes you have to get rid of people and they’re very difficult, but you don’t even take it on your own right. You are the one that’s gonna execute the decision, but you have to ask uh for opinion and that those things, I think you can learn them. But the wall of silence for me is the one that resonates the more with my experience when I see entrepreneurs.
And so it happens three companies, you know, I have three fatalities in the startups that we have invested in. And the three of them went through the wall of silence a couple of months, three months, nothing, no news.
And then all of a sudden the terrible news, you know. The entrepreneur throws the towel in there you go, you know, I can’t do it more personal things, family things, everything else is so crumbling down and you think, yeah, I remember that.
You remember hitting that wall and not being able to figure out how to get around it when, you know, maybe two months earlier than that decision coming up, that if you would have been talking a little bit more about it or speaking to other people that might have opened the door a little bit more and built some clarity. And um one of the things that you know I think is really valuable in learning more about the mentoring and coaching and starting this early is that you know, I’ve heard a lot of things about when you should put boards together and when you should put advisers together and I really think that when you put any sort of angel money into a company, you should build a board, um I used to think that they were too early and what I’ve learned over the years is that it’s never too early because that creates accountability yet again and that is a mini coaching session that you’re going to get as long as those board people are taking the attention to dive in and learn more.
But it also creates um that start up to have someone to chat with and learn and speak and open up which hopefully will open up to a larger board in time.
But it will create process, it will create different understanding, and accountability. So in those same lines, when you are building your companies, is that something that you kind of look forward to now and kind of share as well? That the opportunity has to start earlier and you really got to drive this out in order to make sure these companies do survive, especially if they’re a great product or idea?
Yeah, and I couldn’t agree with you more on that side of things. I mean when, when I first started in latin America and in Mexico investing on these startups, one of the things that we will say to the entrepreneurs, well, we’re going to the pre due diligence is that have you got a board now? Okay. We’re gonna need to set the board, we’re gonna need to structure when the voting is going to be done this way.
And they all look at us like, you know, you’re absolutely crazy now, imagine in a country where uh, the most common problem in companies that are listed in the stock, in the public stock in Mexico, the most common problem is precisely corporate governance. They don’t comply in a listed right market where the main priorities, you must comply with the rules, right? So what hope have you got in a culture where most of the things have to be hidden because that’s how business gets done.
So with entrepreneurs in latin America, you have a double challenge. You have the challenge that you have in the U. S. And Canada and Europe were right, let’s start the corporate governance, let’s put the board together and entrepreneurs a little bit of, hang on, you’re putting handcuffs on me, right? No, no, no, no. Let’s just give it some structure. This is what you said, right? We’re gonna, it’s going to be an advisory board, but you need to get results and trying to sell it to them well in Mexico and latin America, you have to do it twice over, right. First is you have to work on the culture side of things because they don’t like this having a boss, right? They believe entrepreneur is about, I take my decisions, I’ll buy myself a Mercedes, I go on holiday as soon as the investment comes in and uh, and then we’ll see. So you try to put all of this in and I think it’s too difficult, you make it too difficult. And that takes me to my next point is like when you’re trying to put seriousness and corporate governance and reporting and mentorship and KPIs here, it comes the other side of make sure that the money comes in quicker, right? So make sure we put a safe into place and entrepreneurs get told this. So you’re entrepreneurs in latin America are exposed to the quick access to money, like in the US and sometimes in Canada and Europe and the lack of structure in your own environment.
So in angel investment, even in, in, in developed markets, especially in Mexico latin America, you’re fighting with those two things, you’re fighting with entrepreneurs telling you you should free up your money quicker and uh I’m gonna bring so many rules. Yeah, we’ll talk about later on.
I think that’s a real big misconception that is unfortunate and it carries forever. It’s almost like if you’re going to be an entrepreneur, you just happen to always meet the same person that gives you the same wrong advice and tells you the same wrong stories.
It’s kind of like when you go into a country, you always run into the person that says, don’t go past eight o’clock, the whole country is bad and you’re gonna get mugged and you’re like, really, I don’t believe this, and then you don’t go out and you have the worst time and meanwhile the country’s super safe, but they always spread the bad of all the bad, instead of spreading all the amazing things that can occur by enlightening people by giving them the saying, look, you’re not losing control, you’re gaining process, you’re building mentorship, you’re not building a boss.
Like there’s, it’s just weird because I remember so many times, startups would always say, oh, don’t go to VCS, don’t take their money, they’ll take over your company and they’ll out you, and that’s one in a million, And that’s because that CEO did a terrible job and had to be outed because he did buy a Mercedes and did buy a penthouse and the company was burning money, and not growing money. So there probably were reasons that these things occurred, but no one talks about them. So it creates this stigma that when all of these startups go out and look for funding, they think that they’re all bad people, that investors are going to ruin them. And I think that there’s, you gotta kind of somehow change that story because angels are there to support and VCs as well, they all have day jobs and their day job isn’t figuring out how to run your company, it’s how to support your company.
And I think there’s some how we got to write this on billboards, but the breakdown this fear, because I think it really does impede the opportunities that companies can go for by getting the right people in early.
Precisely that point, I was stuck in yesterday on another weapon are in in latin America based out of Costa Rica and there were various people from the ecosystem. And they just wanted me to give what the context is in the investment scenery in Latin America. I always pretty much end up talking about the same stuff in one way or another, even though I changed my presentations, because I see this as the main point being that here are the investors or you know, talking certain language and making sense or not making sense or whatever.
And here are the entrepreneurs also talking some other language within the same entrepreneurial ecosystem that we all belong to. And what happens is we just talk different languages, right? We don’t see it down and we don’t understand how each other has to think. So all my conversations and all my talks always like this is how the angels think, this is how an investor think, this is how VCs thinks and this is a, you know, enough to five years or repeating myself on making people think this is how we do it.
We got to think as a portfolio. We don’t think is that the one opportunity shot. But every time we make an investment and that’s the one opportunity shot for us. But we are building the portfolio right? And we’ve got a balance that and what we need to do is we need to have these returns. If we don’t get them, then obviously we stopped being angel investors and we’re gonna have to go and known ourselves some money somewhere else.
But and and as the reality of it. But what, what has happened is that normally, yes, then we isolate again, it’s like we get together for a conference and you see it in a conference, entrepreneurs are at one side of the coffee table having coffee and biscuits, and on the other side, investors having coffee and biscuits always talking to the same, the same people, Right? So, um, and eventually, is that actually this is what needs to happen is we need to marry each other, but we just don’t know how each other things or why we’re playing the game that we’re playing, why we take the role that we take, and that’s the most important thing, right?
So, it is something that I think, uh, it happens that entrepreneurs have an image of investors that doesn’t necessarily makes justice. And entrepreneurs therefore return saying, having to justify knows, you know, that’s the worst thing that you are being asked when you say not to an entrepreneur, they say, why not? It’s just to know, you know, is that it’s easy if you just go and going to pitch on to the next one, because this is not for me. All right.
For sure. And if, uh, if we take kind of all of these great things that we’ve shared and what you’ve been kind of talking about on how startups can really survive and really get off the ground here and, and certainly make a push in the market and get some great people to support them.
Um, is there maybe before we transition kind of into the rapid fire questions, but is there maybe from your learnings of going through the fail of your company?
Obviously you have successes as well so this is a good matchup. Is they’re kind of like three or four things that you would kind of suggest to any company that’s starting out, you know, take a look right these on the wall because we know we need to see them every day before it’s kind of imprinted in our brain, but there are a couple of points that would stand out that you say, you know what to build a well balanced business in your first two years, you need to focus on these three things and I know you mentioned one of them, not that I’m giving you a cheat sheet, but um would be, you know, don’t don’t seal yourself off from communication, so communication is number one, is there other things that you see that really fit that can help startups really start to mentally think about what it takes to be an entrepreneur.
I will say try not to hire your friends because they are the most difficult ones to get rid of when things go wrong, especially on this side. That’s something that I learned and I kept making the same mistake and I even did it on my last company because because you start thinking with your feelings and you don’t start thinking with a clear head right? And and and always, and I think one of the main purposes, we always say, you know, we do things because we want to have a positive impact in the world.
Yes, you know, but as I think we forget that we live in a society where money makes things move and you need investment one way or not, whether you are a traditional business or you are a social impact business, you need to attract it. So understand how to manage money. And that’s bringing money making money and spreading and sharing the money.
Um, because if you don’t know that everything else that you have as your feelings are, you know, we want to alleviate poverty in the world and want people to, uh, do a lot of positive things. You can do it just sitting on the side of the road without anywhere to move with or people to listen to you. Right? And, and that’s what we are until we have to be clear because sometimes they are the other things, uh, just nice dreams to convert those dreams into reality.
Yeah. To put petrol into the car to drive it.
I love it. Those are three Great don’t hire friends, open communication and understand money bingo. I love it. Especially the understand money part man, that’s huge. Because you’re right, It’s, there’s a always going to be some sort of shortcomings and a lot of the time I would, you know, I’d estimate, uh, 98% of founders are builders and they forget about sales. So there’s like little things we learn as we go in this space, and then I would say that of the 100% again of entrepreneurs, let’s say 80% of them haven’t really figured out finance, and then maybe 80% of them haven’t figured out tech, because we all went through this bucket where we all streamlined to be good at one thing.
And the great thing is that we’re all good at one thing, but we have to open up our minds because these other things become quite challenging and uh, that open communication and I love the no friends part because it’s difficult, you want to be part of it and and everybody joined in, but I think that’s very, very valuable three items to to think about when you’re jumping into entrepreneurship. Um, we’re gonna kind of move into it, and I want to dive into this one question that, um, and I’m sure you’ve got plenty, plenty stories on this, but what story can you share with the audience that really will depict what it takes to be an entrepreneur?
What is the, like you mentioned, what you’ve gone through and you’re very passionate about having some winds having some fails, but is there a story out there that really resonates with with yourself around a founder where she had to go through adversity just to crush it, or whatever that might be, but the heart stringing entrepreneur that really makes you feel, wow, this is what it takes to be an entrepreneur. Is there any story that resides with you that you can share with the audience?
And, and I have to talk about what the angel investment investors or angel networks talk about is like, it’s all responsibility to talk about our portfolio, write or read investments and, and, and, and the people that we, we believe in, and that’s why we make sure that they got an investment.
Um, and this is probably wonder you, you might have met him in chihuahua when we had a conference that uh, you know, is a french entrepreneur from a start up called the Siddhartha And you know, not in 2019, no, you know, just after the, that you will wear event. Um, one of the uh, co founders just decided to, you know, they already, they received the largest check first time around in uh, in latin America for a latin american startup, First angel investment, uh, $1.3 million for an angel investment is pretty large. And uh, it was also a, uh, the first time the five different countries co invested and angel investors.
So it was, it was quite exciting and expensive on the legal side. But what happened is entrepreneur? Is he? Um, so he’s his friend, right? Uh, decided. But with his girlfriend, I mean, no, no, his government friend’s girlfriend, they decided to get up and say, look, we’re going to go and live in Canada, right? And there is the business and the business starting to go down a little bit because they had a couple of clients that just didn’t come through and they hadn’t paid.
So things started to get difficult and somebody jumps the ship right? And one of the founders jumped the ship soon after. The other founder that was pretty much a silent founder also decides to take the opportunity to live and they leave this guy on his own. So Lee, this guy, has to do a, has to do a call that the board and say, look, I only got cash flow For the next three months. Uh, no customers, no new customers. Uh, the ones are gonna pay is, it’s just going to give us enough money to survive three months after that. If they don’t pay us and in three months we are completely gone. The board of directors, half of the board of investors, sorry, I just thought, well, tough shit.
You know, it’s like sort it out the other half, which said, okay, so what do you need? You know, what, what do you want from us? Tell the best thing to do is I want to get rid of these guys. I want them to let go so I can take control. And my plan is to go and visit the two key clients and sell them more what they already buy. So they had three months to survive. First of all, he decided to, he had to let go 50% of the employees. This is the start of the already had 32 people working for them.
So they had to do with 16 now. Two of the co-founders when one of them was the tech side. So they have a platform and he had to learn how to use it. So he had to do a bit of uh he had to do the sells cap. He had to go and do the financing cap. He had to be the Ceo and he had to be the inspirational leader with his team, right? Because all of a sudden had to move offices and, and, and had to see half of the work mates go. And then he went quiet. But let me work on this for two months and we meet again and then I’ll let you know how we’re doing.
He did call me a couple of times to uh, just, you know, alleviate a little bit and about his frustration and of course to have me on his side. So when he came to the voting on the board to get people out, we could do it. He managed to turn it around. He closed the largest deal with televisa, which is the largest tv network operator in latin America. And, and he managed to turn to turn around. Um, but you know, uh, he, we had a few drinks together, we met each other and you know, that’s when a lot of the things flow. He was telling me how, you know, his night was without sleeping. So during the day he had to be positive. He had to lead his team at nighttime. He will literally cry in his bed thinking what am I gonna do? And, and he kept doing it and, and, and he’s, you know, the company, obviously it’s not completely out of the, uh, out of the daily, uh, challenges that having a start up even though he operates in five countries.
Uh, and they’re doing quite well. They don’t need to raise money right now. But is, I think it was probably two weeks away from completely closing down, pulling the curtain down and saying goodbye to actually turn around and said, and he did say, you know, the most important thing for me was having the support of angel investors because the VC. that was with us, they just, they just say, well just wait to see what you do.
Uh, but that was, so that resonates to me quite a lot of, because you have somebody who also his relationships suffered, uh, due to the fact that his co founder put his relationship first, right? Uh, and he and he didn’t because he believed in this dream. So, uh, but he’s done pretty well, uh, you know, french guy, uh, he’s fantastic. So it’s always one of the people that invite to talk in front of other entrepreneurs just to let them know that even sometimes your girlfriends will have to suffer.
Well, that’s a great story and, uh, resilience and passion and being able to take back and control that you’ve built and drive that forward is phenomenal. So amazing story and I’m glad they were able to turn it around because it sounds like they did some great things to start it and kick it off and then everybody decided way we got our payday time to go. So it’s, uh, I’m glad that he was able to change that around. But yeah, that’s what it takes to be an entrepreneur. It certainly does. That’s awesome. Okay. We’re gonna, we’re gonna kind of transition now into our rapid fire questions.
Alright, here we go. And some of these you did mention before, but we’re going to jump into them regardless just to kind of round it all back up again. Um, so what’s your favorite part of it in early stage investing?
the energy of the entrepreneurs? Uh That’s, that’s what I like. You know, that’s my favorite part.
I like it. How many companies do you invest in per year?
Uh, last year? Big Fat zero. It was all for loans and trying to survive and save them. Normally it’s about 2-3 companies for the past three years.
Perfect. I like it. It’s good. Average is good. Ah Any verticals you like to focus on?
No, welcome. Everything. I want to learn about everything. I know sometimes annual investors get told dedicate yourself to the industries that you know, I dedicated myself to learn why just going to anything that I sounds exciting.
I love it. Awesome. Uh Any due diligence requirements that you like to make sure you have in order to make an investment?
Yes. Uh on the numbers side that we talked about how we need to make sure that entrepreneurs know how to manage money. I do want to know how the bank accounts have been managed. I don’t go into details what gets spent on. I just, you know, have a glance and I think most of us could have a glance of how a bank account behaves and from that you take the vision that you want. So I like to look at a bank account of, think this is how it moves.
Perfect. I love it. We do uh three months of print screens of their bank statements so we know what’s going on. Yeah agreed. Outside of the D. D. Requirements. Do you look for any other factors that really drive the company? Is it you’re really interested in product first or Ceo or team anything like that? That really stands out again?
Uh I think it has to be the ceo we all have a look at the C. E. O. S. And decide whether you know the right person to be with the team they surround themselves is just as important. You know because you start, people forget that during the first year, two years of you haven’t invested its most and more likely that one or two of the co founders are going to disappear.
That’s a very good, very valid point agreed. Do you like to lead rounds?
Um, no, we’d like to uh, convince people around the rams.
Okay. Do you have preferred terms perhaps shares? Common safe? So you’re open ended?
We open ended mostly in Mexico due to legal restrictions is common shares.
Oh, brilliant. I’m moving to Mexico. I do like Mexico. All right. So, uh, do you do and you mentioned this already. So you do follow on investments and you is their percentage always? How do you look at that?
Uh, mostly is obviously we, we look at if we can bring in new investors in the same round of the follow on, um, we, we try to maintain of the new round to just, You know, leverage 20 – 30% of it.
Okay. And they take board seats.
Now we get, uh, would rather allocate a mentor, uh, will be invited, but we don’t put it as a, as a rule.
Okay, perfect. Alright. So that, that’s going to end the rapid fire questions. Well done. Uh, we’ve got, we’re gonna jump into the personal questions here. So first question, what is your favorite sports team?
Sports team? Uh, Right. So that depends on the sport side of things. Right. So in, uh, soccer as you call, it has to be America and uh, and I do follow rugby. So, uh, it has to be Richmond rugby team in the UK.
Okay, Very cool. And what was the, what was the football team or the soccer team?
American? Yeah. Okay. But all America, yes, in the, in the Mexican league. And I think we just played against the Toronto something and we won, yeah,
The Toronto something? The TFC?
Yeah, I’ve, in the past I have uh gone too many of those matches. So I’m a big soccer fan, I football fan. While I travel around the world, I make sure that I go to games in every city or country that I’m in, regardless of where I am. So I have seen soccer matches in Little Islands all the way to big, big games. I’m an Arsenal fan but I love watching the game and it’s crazy. The uh the craziest match I probably watched was in um uh uh uh Saint Germain Paris. Saint Germain PSG game the were crazy. Absolutely nuts. Um just the way they did the game, like I could spend 10 minutes just describing it to you. It blows me out of the water. How this old old stadium where PSG place and it was just incredible the way the crowd was into this like jumping the whole stadium shaking. It was incredible. And then the other one was in actually my last travels before Covid was in Israel. I was in uh, I think it was in Hakka and I was watching the local league play and I have to share this only because this was pretty nuts.
But they, it’s a kind of a dome, which what the open top, but it goes up pretty high. So when the match started, a few minutes before the match started, they lit off so many smoke bombs in the place that when they dropped the ball in the game started, you couldn’t see anything. So the crowd was cheering but the players couldn’t move because they couldn’t see the field because they couldn’t see the ball or anything. So for seven minutes, everybody stood there waiting for all of this. We want to go out and then they could see some guy running in the corner moving the ball. And that’s how the game started. So, I had never seen that before. But it was the excitement was so high that everybody was lighting up fireworks, everything. And yeah, that was how the game started. So, it was like literally seven minutes before the ball even moved.
So, I don’t know why I had to get all excited to share this, but someone needed to hear this story, I guess. All right. Next. Next question is, what is your favorite movie? And what character would you play in the movie?
Uh Yeah. Um Mhm. So now you you just you just caught me off guard because uh there are two favorite movies but I have to have to choose one
or you can choose both. Yeah we’re open to that,
But there was one film by the name of the film was The BUll uh with Sylvester Stallone, he’s a boxer, yeah no sorry, not Sylvester Stallone, Robert de Niro um
Oh the Bull, yeah, Robert de Niro, yes, yes, yeah,
So uh I really liked that film, my fellow, I felt quite identify with the uh with with you know, it’s probably the entrepreneur life, right?
What what what he did, unfortunately obviously he dies but uh he actually you know he’s uh he turns himself into a great fighter and uh just so I I have to identify with that one in Robert De Niro and the other one the name escapes right now, it’s silly of me but is uh from the director of Reservoir Dogs, the first one of the series, which was where john Travolta. Uh um was that uh pretty much uh does it for me.
And which character? John Travolta?
Yeah. Especially when he’s dancing.
Okay. Yeah. Oh my God, I can picture now it’s with Samuel L Jackson, John Travolta. I was a huge fan.
I watched that movie 1000 times when I was a kid. The Bull I haven’t seen since I was younger, so I have to rewatch that one, but I do like that one. Uh It’ll come to me the name in a second. But um and okay, the last, the last question to this is what is your superpower?
Uh um My superpower, I don’t know. I would say that I’m always willing to listen. My superpower is always willing to listen.
My wife would probably disagree with that, my children as well because I just come to stop conversations all the time. But yeah, I mean, my wife also says, what, you know, what are you doing? What conversations are you having now? What some call, what did you do there? Why are you talking to people? So I’m always available, always willing to listen. And I think the no salt superpower is um I love the microphone, so it’s very difficult to keep me quiet on occasions like this.
I like it. Well, I was going to add into your superpower and say that, I also think that your superpower to add on to a great listener is that you’re a super connector.
So I think that that makes for super listening to be able to be a super connector too. I think you’re really good at bringing people together. So that’s just from my perspective, but still they’re all superpowers, so that’s amazing,
Thank you, thank you. Yes. Uh my wife said to my uh my father lost it to my wife that you know, one of the things that he likes about me is uh I always listen you know, and and being able to keep quiet and listen and understanding is very difficult for for the great majority was especially entrepreneurs, right?
Uh and then just being able to come around and say something that’s gonna generate value is the second most difficult thing.
I love it
Connector. Yeah, I love connecting people.
Yeah, the whole side of it is uh in my mind it’s always listen twice speak once, that’s what’s gonna help you move around in the world, but Israel, I thank you very much for your time today, it was great to get to know you a lot more again. Uh I think the best was when I got to come down to Chihuahua and meet you and the rest of your team and participate in that event. But today I got to learn a little bit more and hopefully the audience did too. But again, I appreciate it. As always say I won’t do it, but I do it, take notes, can help an old school, but a lot of great things in here, I love the whole side of money management, I’m gonna push that more, I’m gonna put that on a banner because it’s so needed.
But the way we like to end things as we want to give you the last word, so anything you want to share to entrepreneurs or to investors, it’s over to you. But thank you again for your time today.
Thank you Jeffrey. And, and just looking at your background there and the picture that you have and uh, up north, you guys just get some great snow, uh, in the winter. And as you know, in Mexico, we have the opportunity to having some great, great pictures and uh, I can invite invite you, of course you’re gonna receive my invite to come and join us in Pitch at the Beach In, uh, in Mexico, August 21, 22nd, on obviously too old your audience.
The last two events, we have people from Canada. You guys love coming and having a good particle border, anything connecting, connecting with entrepreneurs from around the world. Other investors from the region have a great time, be humans, one to another, take your shoes off, take your socks off, put your naked feet on the sand and just, you know, make connections.
I love it. We’ll make sure we push that out and help support uh pitching on a beach. I love it. It’s a great concept and again, thank you for your time. I will admit the photo in the background, that’s a mountain I climbed in Bolivia. So I would love to say that was Canada, but in this case next one will be, but uh, regardless, again, I appreciate all your time. Thank you very much Israel and um just give me two secs. Oh okay, that was, that was Israel. I met him a couple years ago, I went down to Mexico to do a keynote and to chat with his conference, which was phenomenally well done and really got to meet amazing people in Chihuahua Mexico and through Mexico.
And I just loved, I said this earlier, but I’m a big fan of, you know, his three points, which was, you know, understanding money for a what a Ceo should look for great communication skills and dont hire your friends.
I think there are some good points there to look at. And of course, just throughout all of this, you know, building up that energy learning from your mistakes and communicating is pretty big. So, um, and I’m gonna check out that bull movie. So if you haven’t already, please like share comment, you have us any feedback. We’re always looking to improve, making some introductions. We would be more than happy to jump on an interview, but thank you again for your time today. Stay awesome. Yeah.
Are you interested in meeting Israel, we will be happy to make an introduction!
Are you an angel investor and would like to participate in an upcoming show?