Limited Partners
May 2024
PayPal
IPG
1200VC
FRED ALBERT: What is it you do at PayPal Ventures?
LISHA BELL: PayPal Ventures is an economic opportunity fund, which is a commitment to diverse, first-time emerging fund managers. We provide catalytic capital to general partners to really kickstart their fund.
What does PayPal Ventures consider when evaluating venture funds for investment?
We look at the general partner’s track record and expertise, and we look at their commitment to expanding the venture ecosystem. We also look for synergies: Are they investing in early-stage founders that we are interested in at a later stage — particularly fintech-related?
What motivated PayPal to invest in Endurance28 as a limited partner?
Consuelo has an amazing track record based on her time in Mexico City, her engineering pedigree, her technical background, and her prior investment into major entities such as Clip. She’s a solid investor, she knows how to build, and she has a very impressive due diligence process for each investment.
What do you think sets Endurance28 apart from other venture investments?
That’s a great question. Funds are differentiated by their investment thesis, and Consuelo’s is about happy people, happy planet. It’s uncommon in my world of investing to have that combination of humanity and progress.
How do you measure a fund’s success?
We look at all the typical financial performance metrics. We also look at altruistic perspectives: Did this person evolve an ecosystem? Did this person evolve an innovation? Did this person invest in people? Those are the things that matter: that we change people’s lives.
What advice would you give to other corporations that are considering venture investment?
It’s an amazing way to diversify your balance sheet if you’re a corporate investor. [The] portfolio [in] our economic opportunity fund is over 90% women and people of color. And you can support these companies in a different way than other limited partners, because you have access to HR, marketing, PR, communications.
Do you think we’ll ever reach a point where all founders receive equal attention?
I hope so. But it won’t happen until we disrupt the racial wealth gap. So few people control all the capital, and that’s why we want to build wealthy founders who can invest and make their people wealthy. We definitely have a long way to go.
FRED ALBERT: How does IPG decide what companies their clients should invest in?
ADOLFO GONZALEZ-RUBIO: IPG is a multi-family office that takes a very hands-on approach to investing. One of the partners has a portion of his own wealth managed by the firm. We like to treat our client accounts like our own, so before recommending a security we ask if this is something we would invest in ourselves. One of the partners invested in Endurance28 in Fund 1, and that’s how he started getting to know Consuelo, and really understanding her investment philosophy and her.
What happened next?
We looked deeper into this in order to determine if this could be a sound investment opportunity for our clients, as well. When Fund 2 came around, we began to do our due diligence again. The process started with interviews with the managers, doing due diligence from a legal and compliance perspective, and also looking at other material information, including the track record. We also spoke with other LPs that have invested in a similar manner.
What do you think distinguishes Endurance28 from other venture capital funds?
How Consuelo thinks of investing. She always says the founders and the team come first, and if you provide that guidance … the returns will come by themselves later. That resonated a lot with us. The decision analysis framework that she uses to decide if she’s going to invest in a company is also something that caught our attention. Decision analysis framework is used a lot in the oil and gas industry, where investments are usually very high-risk, and returns are harvested 10 or more years after the investment is made. How she implemented that philosophy into venture capital was very interesting. It’s more of a probabilities approach, rather than a fact approach.
Do you have any advice for other corporations considering venture investments?
Take everything with a grain of salt. Venture capital sounds very sexy — it’s the frontier where everything’s happening and being disrupted. But in the end, you have to execute what is in the best interest of your stakeholders. The media only covers the very, very small number of successes, and does not cover all the failures. So you must do your due diligence. Don’t be carried away by what it can be. That’s one part, but the biggest part is going to be the execution.
Are there sectors or areas of innovation that IPG is particularly interested in for future investments?
The talk of the town today is AI. We like that space, and we think if it can really be implemented and executed to provide more productivity for companies — especially in the manufacturing and industrial sectors — there’s going to be a 3.0 industry revolution.
FRED ALBERT: Can you describe what Twelve Hundred VC does?
ADRINA TORTAJADA: It’s an early-stage investment platform partnering with fund managers and founders who are shaping the future of humanity. We focus on deep science and emerging technologies that can drive significant value creation with global reach.
How would you describe your investment philosophy?
We want to invest in the new generation of purpose-driven tech companies that are improving productivity and infrastructure to leverage demographic change across the Americas.
What’s your take on venture capital as an investment?
For us, venture capital is all about balancing risk and returns. Early-stage technology and solutions across borders can create transformative value and contribute to developing thriving societies. We see a lot of value that we can capture and catalyze for society, combining diversification and an increased upside, fostering collaborative action across multiple stakeholders.
How do you decide what to invest in?
Our hybrid model invests in a balanced portfolio of mature and emerging ecosystems, which allows us to offer an attractive risk-return profile to investing in tomorrow’s technologies. We aggregate intelligence from diverse types of stakeholders, so we can identify local innovators and the relevance of what they are building. Our grading system weighs different aspects of the investment team, the partner’s portfolio, and what we want to achieve: How do they make investment decisions and add value to portfolio companies — do they support them to scale up, to grow? The most important aspect is the shared values between both parties. This is an industry of people, and we care about the long-term relationship.
Why did you decide to invest in Endurance28 as a limited partner?
One of the key aspects we found unique about Consuelo and her team is their investment process: how they analyze their portfolio companies, how deeply they evaluate if they are able to create value, and their sophisticated, data-driven decision process. Second is their cross-border approach, identifying the most talented people outside of Silicon Valley.
You’ve known Consuelo for a while, haven’t you?
Maybe 12 or 13 years. The first time we met, I immediately said, “You’re a natural venture capitalist! You’re a natural connector, you know people, you’re a game changer — you definitely need to become a professional fund manager and a Kauffman Fellow.” I am so pleased to see how far she has come.