In 2003, Brian Requarth got in his car and drove from his hometown in California to Costa Rica, crisscrossing through Mexico and Central America, eventually making his way to Colombia. It was a life-changing 6-month experience that made him fall in love with LatAm and identify unique opportunities for businesses in the region.
After starting and ending a few companies in Colombia, Brian co-founded VivaReal in 2009. It went on to become one of the largest real estate marketplaces in Brazil and it merged with Grupo ZAP, from communication giant Globo, in 2017. Last year, Grupo ZAP VivaReal was sold to OLX Brazil for about $600M.
Brian details this journey in his recently released book, titled “Viva the Entrepreneur”. With versions in English and Portuguese, the book talks about building, scaling and raising venture capital in Latin America, quickly becoming an Amazon best-seller.
Now, Brian is focused on supporting early-stage entrepreneurs. He has recently founded Latitud, a community focused on supporting top LatAm founders, and is investing in some of them through the Latitud Fund.
In this Q&A, Brian discusses the importance of helping early-stage entrepreneurs, his new book, and his plans for the future at Latitud.
BayBrazil: You managed to disrupt a fragmented marketplace in one of the most difficult countries to do business. Now, Brazil is in the midst of an aggravated pandemic with a surge in Covid infection and deaths that is posing new challenges to founders. What is your advice to entrepreneurs leading early-stage startups in this scenario?
Brian: First off, my heart goes out to anyone that’s in struggle right now, or going through a difficult time. The current landscape of COVID is very complicated and I have empathy for everyone that’s suffering directly from this.
Regarding early-stage entrepreneurs, there’s sort of three outcomes in this current scenario. It’s either having a negative, neutral, or positive impact on your business, since there’s a lot of digital transformation occurring right now.
The first thing I would do is take a really strong leadership position and be that leader that’s practicing empathy and building a strong team dynamic. Developing those muscles and skills around remote work is super important because people are feeling lonely, not being able to socialize to the same degree. Embrace that and figure out ways to build a connection with your team.
And then, I also think there’s a moment and time now in which the world is advancing quickly with the digital economy and there are some great opportunities at the moment. There’s a quote from Ayrton Senna, I don’t remember exactly how it goes but it says something like: “When you’re on the track and it’s a sunny day, it’s hard to pass your competitors, but when the rain is coming down and the track is slick, that’s an opportunity for you to forge ahead.” Despite the tough situation, entrepreneurs need to be optimistic and try to make the best of it.
BayBrazil: Now you’re working on Latitud, which is set up to be a knowledge hub for LatAm entrepreneurs to avoid common pitfalls early on their journey. What are some of these pitfalls? What is the importance of having a community to help with that, providing advice and access to information?
Brian: I think one of the largest pitfalls that I see is early-stage entrepreneurs selling too much of their company too early. There’s a lack of experience in some investors. Some people believe that by buying a big chunk of the business they’re doing a good deal, when that’s actually crippling. So, when I see a company that’s in their early days and has already sold about 40% of the company, it’s a tough thing to solve. My advice would be to be careful with early dilution. It isn’t necessarily a bad thing, but too much dilution can have a negative impact on your business.
In terms of community, we’re developing a support system. Entrepreneurship is a lonely, difficult journey. It’s great to have people that are one or two steps ahead of you, that can help and lift you up across your entrepreneurial journey. And then, knowledge sharing is also very important. There’s great experience now with entrepreneurs that have been in the struggle and learned things. You learn the most when you’re in difficult situations and we’re looking to pass on those lessons.
Other mistakes I’ve seen are, for instance, creating the wrong corporate structure. I’ve notoriously done this by creating a Delaware C-Corp and it cost our business $100M in enterprise value and so we’re looking at developing solutions to make things easier from a corporate structure standpoint. These are a few of the many things that we’re trying to do to build the community that, ultimately, builds the next generation of iconic companies.
BayBrazil: How does your new book “Viva the Entrepreneur” fit in with your current mission of supporting early-stage founders in LatAm?
Brian: Viva the Entrepreneur is the book I would’ve loved to have when I first started. I discuss team and trust building, co-founder relationships, how to scale, among other things. When you’re early, you have questions about everything, from legal aspects of company formation to finding clients and investors. I’ve made a ton of mistakes in that sense and I would like to help people avoid making them.
Both the book and my new initiative, Latitud, try to offer insights into starting off on the right foot. The name Latitud is connected to that idea: if you’re on a boat from Rio de Janeiro to South Africa but begin your journey 5 degrees in the wrong direction, you’ll end up in Australia. There are no easy straight lines in this process, but there are some clear patterns that can increase startups’ chances of being successful.
It’s also a way of giving back to Latin America. I was very fortunate with my businesses in Brazil, so I feel grateful. It would be too easy for me to stay in California and invest in real estate, stocks, or other things. I’m taking a good amount of my money and reinvesting in the region.
BayBrazil: Speaking of investing, why did you decide to start the Latitud Fund?
Brian: I already had a few dozen angel investments in LatAm and ended up investing in a handful of startups from our first cohort of Latitud fellows. The fund was an upgrade to what I was already doing. This way, we’re able to support more companies and deploy more capital.
The Latitud Fund exists because we believe that the best people to support early-stage entrepreneurs are other entrepreneurs. That’s why our investors include not only partners in other funds, but also successful founders like David Vélez from Nubank and Sergio Furio from Creditas. We have been investing only in startups that have gone through the Latitud Fellowship program, often as their first check. That means we can get to know the founders really well and help them build and fundraise since the very beginning.
We’re the first Latin American fund to be structured as a rolling fund, which works as a quarterly subscription and allows us to keep raising – as opposed to a traditional VC fund, which would raise for 12 or 18 months until it reaches its goal, to finally start investing. With the Latitud Fund, if a limited partner wants to invest $200k, for example, they can invest $25k per quarter for 8 quarters and be exposed to all deals we close during that period. The rolling fund is more flexible, since we can have new subscribers each quarter and LPs can increase their commitment over time, which also amplifies our investment potential.
BayBrazil: What are the next steps for Latitud, both short and long-term?
Brian: Our short-term goal at Latitud is that we want to be the place to start an entrepreneurial journey in Latin America. It’s currently about attracting the best people, and these are people that maybe don’t have an idea of what they’re trying to build yet, but they’re smart, ambitious, passionate about transforming the region and we really want to build this strong community.
I have a very ambitious goal for the long-term, which is to be able to start a company and raise capital with the click of a button. It may sound a little bit too “sci-fi” at this point when we look at all the steps necessary to build a company in Latin America, and we’re very far from that, but this is my 10-year vision for the region and I know we’ll get there if we keep working hard and supporting the community. It’s going to be a fun ride, and I know it won’t be easy, but I was never motivated by just doing easy things.