MIF VC Meeting
Marcus Regueira
Buenos Aires – October, 2005
about us ...
 Founded 1999, Brazil
 US$48 million under management
 18 Portfolio Companies in 3 Brazilian cities
 3 Exits (1999, 2002 and 2005)
 24 Associates – Senior Associates include native speakers of Portuguese,
English, Italian, Spanish and German
 Senior Associates hold advanced degrees (PhD, JD, LLM & MBA) from
Carnegie Mellon, INSEAD, Northwestern, Stanford, UCLA, Wharton, and
from top Brazilian schools
 14 pro-active Private Investors, successfull entrepreneurs themselves
 Our DNA and upbringing for M&A and Entrepreneurial Partnerships
 Guilherme Emrich & Marcus Regueira, Senior Partners
FundoTec I & II - Venture Capital Funds:
FundoTec I
R$ 30,000,000
FundoTec II
R$ 60,000,000
MANAGED BY: FIR Capital Partners
MANAGED BY: FIR Capital Partners
CLOSED: June 2001
CLOSE: December 2005
LEAD INVESTORS:
LEAD INVESTORS:
Sumitomo Corporation
FINEP
Inter-American Development Bank
PETROS (PETROBRAS)
IADB
Portfolio:
Information Technology
Biotechnology
Alvos
innova
Our Model = Tailored Involvement … because
Distinct Investments have Distinct Needs.
Senior Associates:
Marketing & Sales
Human Capital
Financial / Tax / Fiscal
General Counsel
Corporate Controller
Technology
The Periscope
R&D Partners
Universities,
Excellence Centers
Company 1
Corporate
Management
Training
PAEX-Tec,
Dom Cabral
Company 2
Company ... n
The Periscope, 24x7 scanning for:
• Co-Investors
• Strategic Partners
• Competition, incl. as Potential Business Partners
• Consolidation Plays
• Technology & Market Trends, in Brazil & Abroad
General Profile Prior to Investment:
Generally Undefined
Inadequate:
Inadequate:
Capital
Management
Managers
Financial Controls
Accounting
Market Intelligence
Strategy
Product Format
Commercial Plan
Goals & Objectives
Financial Metrics
Dissonant Financial and Commercial
Plans
Corporate Governance Does Pay.
Structure
The Company
Absolutely
Essential.
Inadequate:
Processes to support Strategy
Cost Benefit Analysis
Communication between Management and Board / Shareholders
Management Process
Our Corporate Governance Model:
Immediately Prior to Investing:
 Adequate the Structure to the
Avaliable Investment
PEOPLE
 Align Vision and Values and Interests =
Investors / Board / Managers
THE FORMALITIES OF THE
Adequate the Structure to the Strategy
STRUCTURE
INVESTOR-INVESTEE RELATIONSHIP
MUST BE ADHERED TO.
Hands-on Board
PAEX tec
Hire Controller and (at times) CEO
Controller: Strong Financial Background
The Company
 CEO: Strong Management Background and (specially)
Marketing&Sales
AT THE SAME TIME, THE KIND OF
OPEN BUSINESS ENVIRONMENT
THAT IS CONDUCIVE TO INNOVATION
MUST EXIST.
PROCESS
 GAAP and Independent Auditors
 Efficient Communication = Mgmt / Board / Sharehldrs
 Vision and Values Transparent to the Organization
 ConsensusDriven Decision Making
 Proprietary Management Reporting System (SAE)
 Formal Discipline Investor-Investee x Teamwork
Our Proprietary Reporting System (SAE):
FIR Capital Analyst
WEB BASED
The MANAGEMENT REPORTING (SAE)Fund Investors
Company
& INVESTOR RELATIONS
FIR Capital Controller
Successful Exits:
Acquired by UOL
Universo Online
1999
Acquired by
NovoNordisk
2002
Acquired by
Google
2005
Successful Exits Require:
– a Flexible Strategy, Designed Prior to Entry,
– Rigorous Execution from day one.
In addition,
– Entrepreneurs Focused on the Business in order to secure
• Attractive Local Market Share and/or
• World Class Technology
– Our Analysis of our investment from Acquirer’s Viewpoint,
– and, fundamentally, Adequate Corporate Governance.
The Akwan Case:
FOUNDERS
Stanford Students
UFMG Professors
OPERATIONAL
MODEL
Search Engine
Computer Clusters
Search Engine
Computer Clusters
FOUNDED
1998
2000
INVESTMENTS
Angels + VCs
FIR Capital was
Angel & VC
ENTERPRISE VALUE
US$ Billions
US$ Millions
REVENUE MODEL
Innovative Media Company
Web & Corporate SearchEngine
THE FUTURE
“Perennially re-inventing itself ”
Google R&D Center
in Latin America
Akwan Investment Cycle:
Sales
Cumulative Cashflow
Stock-options issued
to engineers
2000 2001
Product
Creation
FIR Capital
2003
2005
Liquidity Event
“It wasn’t a question of choosing
Brazil. We chose Akwan that
happened to be in Brazil.”
Alan Eustace
VP de Engineering, Google
(Exame/2005)
Marcus Regueira - mregueira@fircapital.com
TEL: 55 (31) 3074-0020
please visit us @ www.fircapital.com