Do Due Diligence, Tips for Investment in Latam – Jamie Riggs, Low Gravity Ep 3.

Carlos Agudelo

March 19, 2020

Listen on Spotify, Apple and Your Favorite Podcast Platforms: http://bit.ly/LowGravity1

On this episode of Low Gravity Jonathan Calmus speaks with Jamie Riggs, CEO of CLIN Fund @ ChileGlobal Ventures, one of Cosmic’s investors and a strong proponent of globalization in Latin America and preparedness for exit or acquisition in a global market. Jamie’s background and experience in Latin America and Silicon Valley give him a unique perspective on raising startup capital in Latin America.
To learn more about Jamie check out his Linkedin.
To learn more about Chile Global Ventures & CLIN Fund check out their website.

Low Gravity 3: A Cosmic Podcast

Episode 3 – Jamie Riggs
Jonathan Calmus: Hello. Hello. Welcome to another episode of Low Gravity. I am your host, Jonathan Calmus, CEO and co-founder of Cosmic. Today’s a pretty special day. We are sitting here in Medellin in an event called Smart Capital, which has been really, really useful so far. And I’m sitting here with one of Cosmetics Investors as well, from Clin Fund and Chile Global Ventures, Jamie Riggs. Hello.
Jamie Riggs: Hello, Jonathan. Thank you for the invite.
Jonathan Calmus: Thank you. It wasn’t an invite as much as a gun to your head, but this has been the general theme. Everyone that’s on this, I forced them into being on it.
Jamie Riggs: Surprise attacks.
Jonathan Calmus: Yeah. It’s always about the surprise attack, the start-up way. Jamie, the reason I wanted to have you on today specifically is because in my opinion, and I’m sure a lot of people hold the same opinion. You kind of revolutionized Chile’s Investments Scene, is the reality. At a time where everyone was pushing on language more than anything and keeping the culture locally alive, which I totally understand and appreciate. You looked at it through new eyes. So before we start talking about that, give us a little background. How did you end up in Chile? Who’s Jamie?
Jamie Riggs: Great. Thanks again Jonathan. So yes. So I’ve been in Chile six years. Before that I lived in, originally from the U S born and raised in North Carolina. Moved to California after undergrad, worked in stocks, selling Tech stocks. Was my first job until [inaudible 2:13] I went back to do my MBA. I work mainly doing M&A finance for technology companies in the Bay area. Then finally found my calling, if you will, to work with Early Stage Start-ups. When I landed at Silicon by bank.
When I did my MBA though, I had an opportunity to do exchange program and I went to Chile exchange program in Adolfo Ibanez.
Jonathan Calmus: Okay.
Jamie Riggs: And that’s where I remember the actually  day I was at the beach in Tongua—on a local beach in Chile. And that was a day I realized that I wanted to be in Venture Capital. I wanted to help entrepreneurs out and I want to do it, I want to do it in Latam.
Jonathan Calmus: What about that specific moment resonated you? Why did you have the epiphany then?
Jamie Riggs: And I don’t know. I mean, I was kind of going back to grad school, looking for my new path. I like that. do adventure capital. It seemed like I was really interested in working with entrepreneurs and my dad was an entrepreneur, and so the close to be Entrepreneur was really—if I was going to help anybody out, those are the type of people I want to help out accomplish their dreams. I also, at that time, I was reading a book by Mark Andreessen. At the same time I was reading the book when I was on the beach. I said, everybody’s doing this in Silicon Valley. Everybody’s doing this in certain places, but in Latin America, figure out I could help out a lot more. So but anyway, what happen when  I was doing my MBA, I came back to the U S and I really got into my, what I’ll call my venture capital school, Silicon Valley bank I learn, understand investor’s mind-set, entrepreneurs challenges. And with that I came to Chile six years ago and trying to help implement some of this Silicon Valley culture in Santiago. Which what makes sense now. All of that makes sense there, but I try to implement what I think’s the best practices.
Jonathan Calmus: Yeah, I agree with that. I spent some time in Santiago too, that’s how we met. Cosmic was in the start-up Chile program. And I agree with that, as much as I would love to just copy and paste Silicon Valley, crazy high growth culture. Sometimes you just have to kind of play with the pieces how you have them and not all of the pieces fit together.
But that’s been a struggle of mine for a while is the truth. Because I think that’s the root of most of the culture clashes that I feel internally within our teams. A lot of times it’s not a matter of intention or if it’s a good person or a bad person or anything like that. It’s more just seeing the world in different ways. So what have been some of your struggles to actually implement faster growth things? Where are some of the things you do like out of Latin American and Chilean culture for the start-up scene and what are the things that you hope to be a medium of change for?
Jamie Riggs: The things I like about the Chilean Ecosystem. I think Chileans naturally are entrepreneurs. A lot of people doing a lot of different things. I think one of the main challenges that we have is when we find a good entrepreneur, helping them focus and choosing the project, not trying to be three or four projects. So, we know if they do three projects and nothing’s going to be world class.
Jonathan Calmus: Did you feel the same with Cosmic at all? Because this is also an internal conversation we always have. Are we doing too many things at the same time?
Jamie Riggs: It wasn’t, we looked at it from that standpoint. We looked at the challenge that Cosmic has to pivot and the stone path and we have faith in that as we have faith in you guys.
Jonathan Calmus: Thank you. 
Jamie Riggs:  But I think it’s more about when people are doing number of things that are not connected.
Jonathan Calmus: Okay.
Jamie Riggs: That’s what I mean by that point, where you have an entrepreneur who said, okay, I’m CEO of this company but I’m very active in this company. Multiple different companies at the same time. Which most likely, none of those companies are going to be anything relevant.
Jonathan Calmus: Unless you’re Ian Musk. But it takes selling PayPal.
Jamie Riggs:  But Ian Musk has already gone through that process. And he’s had his unicorn, if you will, with PayPal and he has capital to go out and build these teams and also Ian’s a unique individual.
Jonathan Calmus: And exceptional person. 
Jamie Riggs:  So I think that’s one of the challenges. We do implement our entrepreneurs to present English. We do implement a lot of things like that. Because I think I got resistance when we first started doing it. But I think if we’re going to work with the entrepreneur, they need to be able to, thinking globally—day one. And if they can’t speak in English or they can’t present English, then we need to find some of their team where we know that’s going to be a challenge. Then maybe that only market is Latin America and Spain, but we want to know that early on.
So that’s part of the reason we try to push a lot of things through English. And yeah, I think also when the entrepreneurs are presenting and doing things in English generally in Latin America or international, it just shows a level of sophistication for an entrepreneur.
Jonatan Calmus: It’s different.
Jamie Riggs: From an investor standpoint, I think it just looks more sophisticated because we know that most of the accents in the future are probably going to come from US, Asian, maybe European companies.
Jonathan Calmus: Which all English speaking. You have to…
Jamie Riggs: It’s international language English. So that’s what we’re giving.
Jonatan Calmus: It’s very good point and it may seem really small. A few years ago, I don’t remember, I think I was reading like an NLP book, a neuro linguistics programming book or something. And I had read that language is the foundation of culture and that they’re so highly connected to each other. If you move to a new place and you don’t take the time to learn enough of the language, it’s more than just being disconnected because you can’t physically communicate with someone. It’s being disconnected because you can’t connect with them. You can’t actually understand their perspective and mentality. Latin America is a really interesting place because almost every country has its own jargon. Its own nuances.
Jamie Riggs: Version of Spanish.
Jonathan Calmus: As it’s version of Spanish. Exactly. Nuances is the word I was looking for. And I think to a certain degree because Latin America is very traditional, it almost feels like losing yourself. I hope I’m not talking for other people right now because I’m not a Latin American But just from my observations I can see that many times it’s not comfort because it’s easier to speak in Spanish. Its comfort because it’s your comfort. The same way that same dish that your mom used to cook you, makes you comfortable in the moment.
And part of being an entrepreneur is learning how to break those comforts and break out of your zone like we all learn and figuring it out. So I think it was probably a tremendous help to a lot of people who don’t even realize how big of an impact such a small change was. But language in general is a very interesting thing. I do want to talk more about your past because you have a really cool story, at least from my perspective. Growing up you worked on a farm, right?
Jamie Riggs: I did.
Jonathan Calmus: A pig farm.
Jamie Riggs: I worked on the—my dad did have pigs. But mainly worked in, excuse me, tobacco.
Jonatan Calmus: Tobacco. Yes. That was it. 
Jamie Riggs: Tobacco. My dad had tobacco patches.
Jonathan Calmus: And your uncle had a pig farm? 
Jamie Riggs: My uncle had a pig farm. Yeah. But my dad  had pigs as well. A few pigs. So I grew up in a family of farmers. My dad, that’s why I say he was an entrepreneur. He, I will say was a millionaire three times over. Became a millionaire lost a million. Won a million lost a million and retired as a millionaire. And it was all because he was an entrepreneur and he worked really hard from when he was in high school.
He was an individual, some stuff that you don’t talk about, but he was individual who wasn’t able to play sports in this high school because he had to be home to work on his farm, on his father’s farm. So from an early age, soon as he finished high school, never went to college. Had his own farm is very successful. And then some natural things happen. Natural disaster. And he lost the farm at that point. So when I was growing up at an early age, I had no option.
Jonathan Calmus: You had to work?
Jamie Riggs: From the early ages of seven to eight years old I was working on the family farm. And I really appreciate that now that work ethic that I learned from being at an early age. The appreciation of working with your hands, doing physical labour I never take it for granted now.
Jonathan Calmus: At the time how did you feel about that being so young and kind of being labour?
Jamie Riggs: You don’t really think about it because it’s your culture, everybody had done it before.
Jonathan Calmus: Yeah. 
Jamie Riggs:  You has siblings, older siblings who were doing it as well.
Jonathan Calmus: already working on it.
Jamie Riggs: And so that was just part of the day. And I mean when I turned sixteen, I had my driver’s license. I never worked on the farm again. I never said I enjoyed it but I appreciate it.
Jonathan Calmus: But you appreciated it and there are different things. That’s so cool. I can see your book already. The Farmer VC, something like that. It’s great. It’s really cool. When you were in Silicon Valley—Silicon Valley is always kind of an interesting place. And to be honest, I never lived there. I spend a lot of time there, but I always made sure that Los Angeles or somewhere else was my place. Because it can feel very claustrophobic at times.
It’s everyone’s hustling around you. Everyone’s trying to achieve that same goal. Even if you’re not in competition with someone, it feels like you’re in competition with them, many times. It’s kind of has similar but different vibes than New York, I would say. If I had to classify it in some way. And everyone’s a guru in Silicon Valley as well. Everyone like is the profit to the direction of where you want to go.
So there was this transitionary period, you took a study abroad in Chile. You came back to Silicon Valley and did you really sell yourself on the idea of moving to Chile at that moment on the beach or was it more when you got back to Silicon Valley and started feeling it’s vibes again?
Jamie Riggs: So before I was based in Los Angeles.
Jonathan Calmus: Okay.
Jamie Riggs: When I went and did my MBA, I was based in LA and then after my MBA, after my experience in Chile, I got a promotion and they moved me to San Francisco, to Bay Area.
Jonathan Calmus: And then that’s when you moved there. Okay.
Jamie Riggs: And so when I was in the Bay area for those six, seven years.  Really was, like I was saying It was a learning process. I really enjoyed the culture at that time. I think Silicon Valley has changed, since I’ve been here, it’s changed quite a bit.
But I really enjoyed the culture in San Francisco at the time. It was a, it seemed to be a very helpful culture. People were very open. I mean any coffee shop you go to.
Jonathan Calmus: The ecosystem definitely is the value of the…
Jamie Riggs: You’re sitting around a coffee table and every table there is a conversation going about raising capital or the start-up or so on and so forth. Can be a little bit too much sometimes. I mean, sometimes you want a break to talk about something else. However, though for me as a student of the industry, it was great, and I miss it sometimes. I miss that dynamic that everybody is thinking three worlds out in the future, everybody’s thinking big and that’s something that we were trying to implement more here in Chile and Latin America. But your questions about the transition to Chile.
Jonathan Calmus: Yeah. My question was more, well I was taking it more from my perspective. I had thought that you had already lived in Silicon Valley before you got there. So all right, so you get to Chile, you have this epiphany, then you get the job at Silicon Valley bank, right?
Jamie Riggs: Yeah.
Jonathan Calmus: Okay.
Jamie Riggs: But when I was thinking about the beach, I was thinking I was going to do entrepreneurial as a new VC . I want to do it in Latin America. And I actually thought when I was at Silicon Valley bank, there’s a possible opportunity in Brazil or it could be something in Mexico. I didn’t know it would be in Chile per say. I had personal relationships. That’s the end reason why I ended up in Chile. What helped me receive the opportunity. But I felt most likely what happened in Brazil because the size of the market.
Jonathan Calmus: Yeah. 
Jamie Riggs:  Opportunities. But then the phone call came from Chile and that started the opportunity.
Jonathan Calmus: Aside from the personal relationships, looking back, are you happy that you picked Chile over another market? Brazil and Mexico are really advanced in the Latin markets right now.
Jamie Riggs: It’s hard to separate work and personal life for me. Because we really live and work 24/seven a lot of times. So I’m really happy about my decision. Because you know, I do have a wife and two kids. And to have support from my family there, is huge. Trying to do the same thing in Brazil, Mexico, which I wouldn’t have that support would be that much more challenging, from a family stand point.
Jonathan Calmus: Yeah, definitely. Definitely. Today the theme at Smart Capital is all about raising money. Hopefully teaching people how to raise money. But also I got another theme today too actually. It was not necessarily just how to raise money, but it’s also the really fundamental parts of a business that are the reasons you raise money. And the flow of how you get from, as many people put it zero to one, etc. What are your general takeaways? If you had to give one or two pieces of advice to an entrepreneur who’s hustling and trying to raise some money?
Jamie Riggs: First advice. Always go back to the cap table. Your ownership, especially if you’re early on. If you’re in early stage, be really mindful about how much equity you give away in early stage. Hopefully a company’s going to be successful and you as entrepreneur, you definitely want to have a relevant percentage of the company.
So you’re investible for a future. And that relates with the second point is trying to find smart people, that’ll invest in your company. They’ve invested in the past. And doing the due diligence. Sometimes I don’t think entrepreneurs, I’m not sure, but I don’t think entrepreneurs do their due diligence.
Jonathan Calmus: On the investors themselves? 
Jamie Riggs:  Yeah. So like I give you an example, when we’re investing in Cosmic Go, hopefully Jonathan called up two or three other entrepreneurs we’ve invested in, asked their opinion about Clin and Chile Ventures and Jamie and Emmanuel and the team that we have.
I think a super important on the do for an entrepreneur, do due diligence. Okay. If you encounter somebody who’s interested in investing in your company. Okay, have you done it before? If you haven’t, then that’s different. But if you have done it before, first thing I’ll be doing is calling who they’ve invested into, trying to see what their experience is.
Another part is if when you do an early stage Angel Investing, so forth, I think it’s important to ask too, what is the time commitment? Because when you’re early stage, you really need help. Very early stage you really need a lot of people that are don’t perceive the help out. And sometimes entrepreneurs go raise capital from Angel Investor. Okay, wow. Then they think that they are going to stay.
Jonathan Calmus: And the money runs out. 
Jamie Riggs: Money runs out. But the point is that hopefully you had a discussion with the investor before and said, okay, how much time can you dedicate?
What’s going to be your value add? Are you going to be able to make contacts? You will be able to meetings with me. What are you going to do to help me out besides the money? Hopefully you have options for money. I know it’s not that simple sometimes, but hopefully you have a number of options and you really could do due diligence and choose the right person.
And the third thing is I would just, when you’re out fundraising or this is a different concept, but I really try to have a lot of meetings when you don’t need money.
Jonatan Calmus: Yes, that’s the best advice I could give. When you need money, it changes the …. It’s weird thing. You know what’s really funny? I’ll relate it back to this. When I was dating my ex-girlfriend, all of a sudden I became the most attractive man in the world. When we broke up all of a sudden that vibe, that essence in the universe or someone goes, okay, well he’s not attractive anymore. And, it’s really similar when you’re raising money. It’s as funny as that metaphor is.
When you need money and you’re hustling and you’re going out there, the money does not show up. And when you’re more relaxed, you’re more strategic and you take some of the advice you’re giving, like you do due diligence on your investor and you remind yourself that it’s a filtration process for your company to them as much as them to you investing in your company.
Things move a lot better. And I think probably subconsciously, I don’t think an investor will ever say like, hey, did you do due diligence on us? But I think subconsciously the investors get vibes of how the start-up is interacting with their firm. And the types of questions they’re asking and the speed at which they’re trying to do things. And in start-up land, there’s always this balance where you need speed but you can’t demonstrate desperation. And it’s one of the biggest—-desperation in general ruins opportunities completely. The more that you want something from someone, the less usually they want to give it to you. And so it’s almost like the Zen moment. How do you achieve that moment where you can go in there. And your last piece of advice is fantastic. When you don’t need the meetings, that’s when you should be taking the meetings. 
Jamie Riggs:  And one additional part on that is if the more interactions you can have with investors and not meetings standpoints. How often can you go out and have a coffee Or have lunch or if you have a beer?  Interactions that are not in office, they have 30 minutes to an hour to present whatever. My recommendation is, whatever you could do that’s different to interact with investors, to build a relationship.
Because at the end of the day, as I always tell the Chileans is [Hispanlian?] or dating process, from both standpoints. As an investor, I will be dating you just see if we’re a good fit, you know, if we’re going to get this marriage, we’ll have this marriage. And you should be doing the same as an investor. I mean, from an entrepreneur standpoint, entrepreneur should be dating me. To see, Jamie will be a good fit. Is he going to be a good spouse? Is he going to be able to deliver?
Jonathan Calmus: It’s only funny because I’m looking at you in the eyes. So it actually feels like you’re talking…
Jamie Riggs: The first thing I said when we came in today, I said, no kissing.
Jonathan Calmus: No kissing. That’s… all right. All right. All right. You’re fine. Jamie. I know you’re really busy. I super appreciate this. I hope that someone listening takes something away from this and learn something. It’s not an easy path to grow a business from both perspectives. And I think that a lot of people see VCs and the fundraising world as walking check books and kind of walking dollar signs. And it’s not that at all. As you pointed out, it’s very human. You want to try to interact with people outside of the office environment. You want to have a beer, you want to build a relationship. Today were you in the session with Ayenda 
Jamie Riggs:  I was.
Jonathan Calmus: And really liked what their CEO said on this. That if you plan to raise money, it’s a year and a half long path. It’s not a five minute. You engage with someone today and tomorrow they signed the documents and send the check. Not at all. It’s something that takes a lot of patients. It’s a process that’s extremely human because it’s full of, blockers and just stumbling things along the way that you didn’t necessarily know you needed to account for. And it represents life. Like any other process, there’s the ups and the downs and everything else.
And if you emphasize the human part of it and the relationship part of it, someone will see you. Because the famous line that all investors say, and I learned this very early on. Is, investors invest in people, not in companies. And most of us forget that along the way. Most of us say, okay, our KPIs have to be perfect. I can never demonstrate any failures.
I have to be this meta human at all times, and it’s just not that. And I think one thing that worked really much in our favour Jairo and I, we like to show the dirty laundry. Because the dirty laundry reinforces the positivity that’s happening as well. It shows that there’s a path to it.
Jamie Riggs: Yeah.
Jonatan Calmus: Until I started internet marketing and growth hacking, you’d hear all of these crazy overnight growth stories. And then when you start digging into the actual data, you see that the hockey stick is actually more of a roller coaster. When you’re in the micro, it’s a roller coaster. When you’re in the macro, it’s the hockey stick.
So if you zoom out, all of a sudden you see this beautiful, perfect story where Uber became this monster overnight, or Facebook. Uber is a nine, ten year old story. It didn’t happen overnight at all. In fact, it was full of a lot of difficulties in the beginning. And most companies are like that.
So anyway you’re heading back to Chile right now for something really amazing. I’m not going to say it. I’ll let you say it eventually, but congratulations on that too.
 Jamie Riggs: Thank you.
Jonathan Calmus: Thank you so much for your time. Thank you for your support.
 Jamie Riggs: Of course. Thank you Jonathan.
Jonathan Calmus: It’s been awesome working with you and with Clin Fund and Chile Global. And hopefully I’ll see you next time in Chile.
Jamie Riggs: Yeah, thanks Jonathan.
Jonathan Calmus: Thanks Jamie. Bye.
For any entrepreneurs out there that interested in the Latin American, specifically Chilean start-up Ecosystem, looking to raise money and looking for an incredible group of investors and support, go to chileglobalventures.cl. Again, that’s www.chileglobalventures.cl. If you’re interested in launching your own Micro Mobility Fleet, go to www.cosmicgo.co.

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