Interview
"It was a sign of difficult times ahead, but Latino companies know how to survive with very little"
In dialogue with LPO, Cheryl Campos, co-founder of VCFamilia and one of the leaders in the ecosystem of Latino investors and founders, explained what the post-Silicon Valley Bank scenario is like.

Cheryl Campos is passionate about the intersection of finance, technology, and social impact. She is the head of Venture Growth and Partnerships at Republic, an investment platform for founders to raise capital from accredited and non-accredited investors. In addition, this New Yorker with a Peruvian mother is co-founder of VCFamilia, a community with more than 340 Latino investors who support their peers and founders through collaboration.

Campos, who began her career in investment banking at Barclays, has a BA in Economics with honors from Harvard University and is an MBA candidate in the Stanford Graduate School of Business Class 2024.

In an exclusive dialogue with LPO, Campos (who is also a model and actress for several well-known brands) told how the fall of the Silicon Valley Bank changed the conditions for Latino startups that previously could get money from these regional entities. She predicts difficult but not impossible times for Hispanic entrepreneurs who are used to dealing with funding shortages.

Fundadores e inversores de venture capital latinos lanzaron un fondo de emergencia para ayudar a los afectados por la caĂ­da del SVB

After the shock of the Silicon Valley Bank fall, how do you analyze the impact it will have on the Latino startup ecosystem?

Many international companies used SVB to facilitate their operation in the US market. Now that SVB does not exist anymore, they are looking for other service providers that allow them to function within the US with the same ease and understanding. There have been significant obstacles with KYC ("Know Your Customer") and compliance measures. Domestic Latino companies will feel the lack of presence through the ecosystem support they brought in, as well as access to capital provided through venture debt, commercial loans, etc.

The advice to entrepreneurs is to focus on the fundamentals, reduce the cash burn and create a long-term strategy that will allow them to thrive during these uncertain times.

While it is true that financing for Latino companies in the market is very low, can this SVB crisis further reduce that already small funding?

This event was a sign of difficult times ahead, where deals are less likely to close and there will be more scrutiny during the due diligence process. It is similar to what happened with COVID, when times are tough, many investors pull back. But then Latino companies know how to survive with very little.

"It was a sign of difficult times ahead, but Latino companies know how to survive with very little"

As an investor and CEO of VCFamilia, what advice do you give to other entrepreneurs who are now scared by these disruptive events?

Focus on the fundamentals, reduce your cash burn, create a long-term strategy that allows you to thrive during these uncertain times.

Domestic Latino companies will feel the lack of presence through the ecosystem support they brought in, as well as access to capital provided through venture debt, commercial loans.

Do you think the SVB crisis will be something that will completely change the conditions for investors and entrepreneurs, or will there finally be other entities willing to finance those projects that SVB used to finance?

There are definitely many neobanks and traditional banks that are entering the market to support entrepreneurs. Right now, the treasury management strategy of many startups is to make sure their funds are covered by FDIC insurance through different banks. So these neobanks like Brex, Arc Finance, Mercury are coming up with smart strategies that provide more group insurance by taking care of the division and allocation of their assets through other banking providers afterwards.

Many Latino founders seeking financing will surely find access even more difficult after this. What alternatives does a Latino businessman have today to start his business?

There are many different alternatives when it comes to funding besides bootstrapping (using own resources) and VC as crowdinvesting through Republic and revenue-based funding like Novel and Capchase.

Translator: Bibiana Ruiz. 

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