July 29, 2017
Image source: ACE
Since 2012, ACE (previously Aceleratech) has already accelerated more than 60 startups and has had 6 exits. These companies are companies in the growth stage with validated models and constant progress. ACE remains very close to its startups after the acceleration period continuing to help with corporate governance, connections with business partners, investors and potential exits.
ACE’s investment thesis is agnostic; the organization is always looking for high-potential entrepreneurs with game-changing ventures that will impact the economy, solve inefficiencies and cause real disruption. ACE invests with a select group of international investors that belong to its network and co-invest with angels, VCs, family offices and corporate ventures from all over the world.
What do you expect from a FinTech when they are going to select for the acceleration program?
Pedro Waengertner: We do not look differently at FinTechs compared to other startups. Our process is always the same: we look at the team and the size of the market. Usually, FinTechs operate in very large markets, so in this aspect, they tend to be attractive. The hard part is finding a team that is very good and has a relevant project.
How do you define a good team?
PW: There are some features that the team needs to have. We get companies right at the beginning of the entrepreneurial journey, so they have no traction. What we want to know is what the team has already managed to do alone so far. What have they already been able to perform? How long has this team been working together? Because you've been working together for a long time, it reduces your risk.
We also evaluate how well the team knows the market. They have to be able to give a lesson to us in this sector. If they cannot, there's something wrong.
Another thing is how much the people (who make up the team) are complementary to each other. Are all the skills needed for startup present on the team or is there some competence that is needed and no one has?
What does a FinTech startup need to have to succeed in Brazil today?
PW: It needs to combine excellent customer acquisition capability, which we can translate into marketing, coupled with an excellent product vision, which we can translate into the customer experience.
In addition, it needs to have a minimally competitive technology.
There’s no secret recipe, though, it's a combination of little things. What I see a lot are entrepreneurs who have an interesting idea, but do not have the conditions for customer acquisition or developing a product. For me, these things lay against the project.
What are the most common mistakes of FinTech entrepreneurs?
PW: The first is to embark on FinTech because it is fashionable. This is not a good reason to create a FinTech. You need to have luggage, will to understand and to solve a specific problem.
Another thing is the lack of understanding of how the market works: the relationship with the Central Bank, the laws impact the activity, the risks of the project... If you do not understand this, you can invest a lot of energy and die on the beach; you cannot do what you expected, or you can only do it in a very different way and that generates much less value.
What would you say to a foreign investor who is considering putting money into a FinTech in Brazil? What tips or warnings would you make?
PW: If I were a foreigner I would not be the first investor of a FinTech in Brazil. I would be from the second on and would talk a lot with the first investor. I would also talk to the entrepreneur a lot. So I would have a class on the particularities of our market.
Another thing is that I would first seek to better understand the Brazilian market before going out buying FinTechs. I would try to understand the intricacies of our market because this can greatly determine my investment strategy. That would help me find niches. There is still much that has not been exploited or has been barely exploited in this market in Brazil.
This content was published in partnership with StartSe, a leading Brazilian website about startups. The portal contains the StartSe Base, the largest database of startups in the country, with more than 5,000 registered companies.