With new startups fever, Americans change to Silicon Valley in Brazil

Investment firms are betting on the growing Brazilian business community on the web When the Brazilian company Monashees Capital investment came into contact first with Julian Ippolit, co-founder of an online market place for buying and selling of handicraft, he figured he would have to go to Sao Paulo to visit the company. Traditionally, investment firms in Brazil have distant relationships with the companies that fund and are not very well seen by entrepreneurs.

Juliano and Monica Ippolito built a relationship with venture capital firm in Sao Paulo Instead, three members of Monash, including co-founders Eric Acher and Fabio Igel, entered a car in searing heat and traveled nearly 60 miles (96.5 km) to Campinas. They spent several hours with Ippolit and his wife, Monica Ippolit, co-founder of startup Elo7 to meet them and explain the role they have in companies in early stage of development on the Internet. Initially, Ippolit "did not want an agreement," Igel said, because "they needed money and were happy." But the visitors continued to Campinas and the relationship grew. Recently, more than seven months after the first call, Elo7 received Series A funding from Monash and the U.S. venture capital firm Accel Partners. The deal illustrates the emergence of a community of Internet startups in Brazil. Monash identified entrepreneurs, and developed a relationship early on brought a major player in Silicon Valley as a partner to make a rare investment in early stage company. The change in the relationship between investors and entrepreneurs occurs as the venture capital firms in the United States begin to notice Brazil. During the rise of Brazil, many sectors of the economy reached global prominence, but the Internet has been a notable exception. Nasdaq does not have an internet only company listed in Brazil, and even the Brazilian stock exchange has very few. Read also: "Brazil Cost" innovative business takes money to the U.S. Happy hour with ideas and money He had a brilliant idea? Win an investor Learn what are private equity, venture capital and seed capital This is not lack of talent. In 2000, Brazilian teachers created in Minas Gerais to Akwan Information Technologies, which was bought by Google in 2005 and became the center of research and development in Latin America at the Internet giant. But entrepreneurs today are beginning to believe that there are more options and, therefore, companies that are building long-term to compete with multinationals rather than being bought by them. This is changing due in part to companies like Monashees. According to Claudio Furtado Vilar, an authority on venture capital and private equity and professor of Brazilian Getulio Vargas Foundation, Monash is among a small group of companies that are introducing "a new paradigm for the type of relationship that nurtures entrepreneurs in a very positive and creates value. " Other investment firms include Astella Investments, Ideiasnet and FIR Capital. All are filling the spaces of private funding for startups. According to the Association of Latin American venture capital, based in New York, five of the 32 operations of venture capital and private equity in Brazil carried out in the first half of 2011 were early stage investments, seeders or incubators. In 2010, the proportion was 12 to 28. Monash currently has U.S. $ 70 million, a total of $ 30 million in July 2010. The most she has invested in one company through several rounds of U.S. $ 7 million. Archer, a partner, says the company is on average 30% stake in a startup, with margins ranging from 20% to 40%. In 2010, Archer said the company would probably only two or three investments per year, due to the time it takes to establish relationships. But this year, Monash has made at least nine new investments in nine different startups based in Brazil. One company has recently started - it is the GetNinjas, an online market place for services founded by two Brazilians Diego and Eduardo L'Hotellier Days. The unexpected increase in Monashees opportunities for investment in Brazil is due, in part, because entrepreneurship is establishing itself as a viable career. For example, L'Hotellier, who worked for McKinsey & Company and Bain Capital, the corporate ladder could continue, but declined entrepreneurship.

Product sold by Elo7, online market place for crafts in Brazil A second reason is that failure is no longer a stigma. Days, for example, tried to start a startup in the past, but "I was with the wrong partners," he says. But after finding L'Hotellier, he was willing to try again. Youth are also encouraged by Brazilian compatriots returning from the United States, as Julio Vasconcellos, a graduate of the University of Pennsylvania and Stanford Business School, co-founder of the first shopping site collective, Urban Fish in Rio de Janeiro in 2010, supported by Monash and Benchmark. His initial angel investor was Chamath Palihapitiya, who says he participated in all rounds of financing since then. And just as Brazilians are returning, Monash has also invested for the first time that Americans, in contrast, has been to Brazil in search of greener grass. Baby.com.br, a site e-commerce products for babies who began this month, was founded by two Americans, Thomas Kimball Smith and Davis. And they chose a Brazilian company rather than venture capital firm in Silicon Valley. Thomas said that since the initial meetings with Monash, "it became clear that we worked with these guys, they would be with us daily." "We knew we would have a partner highly concerned with the type of relationships and contacts that we need," he said. "Otherwise we're just a bunch of guys showing off with suitcases of money" with an idea but not sure how to use it. Baby.com.br Other investors that participated in the round of investment led by Monash are Ron Conway's Angel and Mr. SV Palihapitiya, which has invested in three companies along with Monash. After the investment round, which raised $ 3 million, Tiger Global Management has contacted the Monash expressing interest in the company and then adding $ 1.5 million in April. "Tiger would not have shown interest in us if we had not managed resources with Monash," said Smith. Monashees faces a number of challenges, particularly to produce its first output. "We need to achieve liquidity events, and this should take some time," said Acher. "We still have to prove ourselves." And increased competition means that Monash is losing business for the first time, although this is an expected result of the evolution of the sector. If the scene to Monashees and startups succeed will also depend on its U.S. partners and their capacity to adapt. Accel, who made two investments along with Monash, has also been crucial role in achieving win Ippolit, including presents them to the co-founder of Flickr, Stewart Butterfield, who also had doubts about accepting funding early in their sharing site of photos. "How we behave will determine how much they will trust us in the future," said Kevin Efrusy, a partner at Accel, about this new group of Brazilian entrepreneurs. "If we behave well, we will be able to partner with entrepreneurs there for generations." But, he said, "if we behave badly, to optimize the short-term gains and try to take advantage of people, we destroy the ecosystem." Source:http://economia.ig.com.br/empresas/com-nova-febre-de-startups-ate-americanos-trocam-vale-do-silicio-pelo-brasil/n1597319536544.html Brasil Private Equity Fórum para Limited Partner e Investidores www.latinmarkets.org