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Daniel Green: "2021 was an Absolutely Buoyant Year for Latin American Venture-Backed Startups."

Daniel Green: "2021 was an Absolutely Buoyant Year for Latin American Venture-Backed Startups."

FromBoardroom Governance with Evan Epstein


Daniel Green: "2021 was an Absolutely Buoyant Year for Latin American Venture-Backed Startups."

FromBoardroom Governance with Evan Epstein

ratings:
Length:
60 minutes
Released:
Jan 31, 2022
Format:
Podcast episode

Description

Intro.(1:40) - Start of interview.(2:34) - Dan's "origin story". He grew up in southern California, did his undergrad at Stanford where he studied international relations. This prompted his quest to do something "cross-border." He did an exchange program in his junior year to Santiago, Chile, where he met his now wife and that planted a seed to do something related to Latin America. After law school he went to London where he practiced with Allen & Overy for 4.5 years. In 2004 he came back to Silicon Valley to practice as a corporate associate at WSGR, where he spent 6 years. At that time, there was not much cross-border work with Latin America, although there were partners focused on China, Israel and India, so the international blueprint was there to start building bridges between Silicon Valley and Latin America. Since then, he has developed his practice (passing through Goodwin Procter and Greenberg Traurig) and now at Gunderson Dettmer where about 80% of his practice is focused on Latin America.(5:53) - Dan's description of Gunderson's Latin America practice: "Fundamentally, we're transactional lawyers that do international cross-border work." Their focus is on venture-backed technology-driven, high growth companies.(10:21) - Why he advises his clients to incorporate in the Cayman Islands. "When we advise clients on a choice of a holding company, it comes down to a mix of investor preferences, tax considerations and administrative aspects." For Latin American companies, there are now three preferred choices: Delaware C-corp, a Cayman Islands company or a UK company. Kaszek Ventures was an early advocate for using a Cayman holding company. "I think we're going to see those 3 structures prevail in the market." Three prominent examples with Cayman holding structures: Nubank (the Brazilian neobank that recently IPOed in the US), Cornershop (a Chilean grocery delivery company that was acquired by Uber) and Kavak (a Mexican used-car online marketplace).(17:26) - On the geopolitical tensions between the US and China, and its implications for the startup ecosystem in Latin America. On the rising investments from China in Latin America and the increasing role and scope of the Committee of Foreign Investment in the US (CFIUS) impacting transactions in the US.(20:39) - On the increasing antitrust pressure from local regulators in Latin America. The example of Cornershop in Mexico and Chile.(23:19) - Dan's overview of entrepreneurship in Latin America. "Brazil is by far the most important market, followed by quite a distant second place from Mexico. Those two markets by themselves dominate the region in terms of capital deployed, number of deals, exits activity, etc." 2021 was a record year for venture activity in the region [$15bn in venture investments]. What's driving this growth? A combination of factors, per Dan: "The pandemic accelerated many changes, all of it boosted by widespread broadband adoption, digitally native people, younger generations, generational shifts in family businesses with decision-makers in their 40s or 30s and a vast under-banked and under-served population." There is also a virtuous cycle with big investors such as Softbank investing in the region ($8bn in two funds focused in Latin America) and other late-stage investors that have increased the cadence and velocity of investments such as Tiger Global. On the corporate governance implications of these investments.(30:22) - On the changing landscape of venture funding  in Latin America: "There is a much richer ecosystem of investors in Latin America, with stronger local investors." The rounds are getting bigger and investments are done at a faster pace. "But the markets will always be cyclical." His take on dual-class shares and other governance structures. "There will be down-rounds or re-caps if we go on down cycles, and these questions may play out in the next decade. We are still in an incipient stage of corporate governance in the region."(39:13) - On
Released:
Jan 31, 2022
Format:
Podcast episode

Titles in the series (100)

In-depth interview podcast with leading corporate governance experts, including world-class founders, scholars, board members, executives, investors and more. The content is structured as a long-form conversation to explore not only the latest corporate governance trends, but also to get some personal insights from some of the best and brightest minds behind America's boardrooms.