A version of this post originally appeared on our Managing Partner Nathan Lustig’s blog with the title Magma at Three Years.
Francisco, Diego and I first started working on Magma Partners in December 2013, which means we’re just passing our 3rd birthday. We originally planned to invest in 4-6 Chile based companies per year, but quickly found that demand for private capital, high quality mentorship and a bridge to the US market outstripped our modest goal.
We like to be the first check into a startup and invest an average of $50k initially, with the capacity to follow on with $250k more in two niches:
- B2B companies that serve the Latin American market
- Startups whose tech team is based in Latin America but whose primary market is the US.
In 2016, we invested in 7 new companies, moved to new offices in Santiago and expanded our presence in Colombia and in the US. We’ve honed our expertise in helping Latin American startups derisk the jump to the US market and have had our first successes helping B2B companies in Latin America negotiate significant deals with legacy companies.
We also focused on building out our networks in Colombia, Mexico and the US. As more of our companies started to expand outside of Chile, it was the logical next step to live up to our promise of helping entrepreneurs with more than just money.
As we turn 3, here’s some of our 2016 stats:
A version of this post first appeared on Nathan Lustig’s personal blog in English. Tambien, una version de este post aparece en español con el titulo Lo Que Debes Saber Antes de Invertir en Startups. También fue una charla (video).
As startups and tech investing has gone mainstream with things like AngelList, Shark Tank, The Social Network, the proliferation of accelerators and incubators, and the celebritization of founders and VCs, more money has flowed into the industry.
Most non professional investors interested in startups are starting to dabble in early stage companies as angel investors. Friends often send me deals they’re think about investing in, asking for advice.
Here’s a concrete example of a typical question from a successful entrepreneur friend looking to invest:
Read the rest of the article about advice for investing in startups on Nathan’s blog.
Photo credit: David Yu