“keep in mind that this is a collaborative industry”

Rafael de Haro, Managing Partner, VARIV Capital

What do you do currently?
I am managing partner at VARIV Capital, a venture capital fund focused on early stage technology opportunities in Mexico and Latin America (with some presence in Europe and the US).

How and when did you get involved with the Mexican entrepreneurial ecosystem?
In 2010, when my partners at VARIV Capital, Ernesto and Diego Vargas (both serial entrepreneurs), invited me to start a software company with them in New York (the majority of the team and part of the financing came from Mexico). Two years later we structured the venture fund, which we began investing in 2013.

How would you describe the ecosystem in Mexico?
Young but promising. We have a long way to go but we are building strong foundations. I am optimistic because the entrepreneurs and investors building the ecosystem are talented and well-intentioned men and women who I count as the most interesting people in the workforce today. I admire my colleagues and that keeps me motivated.

What do you expect in the next 12 months?
Adjustments from the fund side and the company side. We will see some companies go out of business… and some funds, too. Inevitably, we will also see some success stories taking place on both sides. It is important that we keep in mind that this is a collaborative industry. In venture capital, success has many parents.

What are the main challenges?
1) Acceptance of failure, the lack of which is a cultural mishap we still convalesce from. In the next few years, companies will fail, write-offs will be recorded, and the ecosystem will grow stronger as a result of this catharsis.
2) Entrepreneurial rigor, which will come naturally once the startup fever resides. Today it is considered cool to have a startup, and a lot of aspiring entrepreneurs go into it without being prepared for it. Building a business is hard and building a successful business is very hard. Being conscious of that truism is a step in the right direction.
3) The reckoning of corporations, who we still see struggling with disruption. Most corporates still regard startups as minor headaches whose solutions they can “build themselves.” It is important to mention that in some isolated cases innovation at the early stage is already being recognized, especially in the financial services sector (the big banks have started to engage with the fintech community, for instance). Other strategics, like the retail companies for example, still have their heads stuck in the sand.

What change or result would bring the greatest benefits for the ecosystem?
Overcoming the challenges I mentioned above would help, namely: (i) Accepting failure,which will enable a culture of succeeding iterations and healthy feedback loops; (ii) Instilling a culture of entrepreneurial rigor, which will result in better entrepreneurs building better companies; (iii) Corporations recognizing the power of disruption, which will facilitate exits in this highly illiquid market (IPOs are exceptions to the rule); and (iv) Successful entrepreneurs giving back to the ecosystem by mentoring and investing in the new breed of entrepreneurs, effectively closing the virtuous cycle any ecosystem worth its salt requires.

Describe your typical day
Wake up at 7 am to go jogging in the park. Breakfast with the newspaper (print) or with an entrepreneur, colleague or investor. Get to the office and, depending on the day, allocate my time to the portfolio companies, fund operations, fundraising efforts, or investment team meetings with entrepreneurs.

Who is your favorite entrepreneur?
Ted Turner.

A recent book you recommend?
I’m currently reading Life and Times of Michael K by J.M. Coetzee, in my opinion one of the finest novelists alive today.

Movie?
There Will Be Blood by Paul Thomas Anderson is a case study in entrepreneurial audacity.

Smartphone,tablet, laptop or desktop?
Smartphone and laptop.

iOS or Android?
iOS.

Favorite App?
Lifedots 😉

Favorite social network?
LinkedIn.

Ideal vacation?
A place I have never been to.

What are your goals, that you can share, for the next 12 months?
To help the entrepreneurs in our current portfolio build bigger, better and stronger businesses; and to close our second fund in order to be able to invest in the entrepreneurs that will build the bigger, better and stronger businesses of tomorrow.

One word that describes you?
Curious.

Previous interview: Andy Tsao