http://idcee.org/p/patrick-arippol-dgf-investimentos/ Patrick Arippol participated in the IDCEE 2013 Panel "Starting online business and investing in Brazil: what lessons are there to learn for tech entrepreneurs and investors in CEE?" Patrick heads the Early-Stage practice at DGF Investimentos, one of the leading PE/VC's in Brazil. He spent his career building high-growth innovative companies in Silicon Valley and Brazil. Before joining DGF as partner, he founded and managed Delphis Capital, a Silicon Valley-based investment firm focused primarily in enterprise software, internet, and healthcare. Earlier, he co-founded and built startups Prosper Services (mobile payments) in the Bay Area, and Salutia in Brazil (e-health company acquired by TIVIT). Patrick also worked for entrepreneurial thought leaders at Seer Technologies (IPO in 1995), the Monitor Company, and the Stanford Center of Entrepreneurial Studies, after obtaining his MBA there in 2004. Pic's are here: http://www.flickr.com/photos/idcee/sets/ More @ http://idcee.org Follow us on: YouTube: http://www.youtube.com/user/OfficialIDCEEChannel Facebook: https://www.facebook.com/IDCEE Linkedin: http://www.linkedin.com/groups/IDCEE-3940138 Twitter: https://twitter.com/idcee_eu Google+: http://gplus.to/idcee Flickr: http://www.flickr.com/photos/idcee/collections/

1. Current Startup Environment
in Brazil
DGF Inova /
DGF Investimentos
Patrick Arippol
Director
parippol@dgf.com.br
IDCEE Conference
October, 11th, 2013
Phone: +55 11 3521 3700
www.dgf.com.br
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2. Sector
Specific
GROWTH
CAPITAL
Mid Sized
Companies
Innovative
Start-ups
Introducing DGF Investimentos – Practice
Areas
DGF Early Stage 1
Status: Exiting
Size: R$ 22M
Vintage: 2002
DGF GROWTH 1
Status: Invested
Size: R$ 100M
Vintage: 2007
DGF BIOENERGY
1
Status: Investing
Size: R$ 300M
Vintage: 2009
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DGF Early Stage
2
Status: Launching
Size: R$ 50M
Vintage: 2012
DGF GROWTH 2
Status: Raising
Size: R$ 300M
Vintage: 2013

3. Introducing DGF Investimentos –
Highlights

Leading Brazilian Firm: Founded in 2001 by the former president of ABVCAP (Sidney Chameh), DGF is one a
leading pure play growth Private Equity firm in Brazil, with 4 funds and AuM of U$ 300M

Seasoned Investment Team: The senior team has worked together for more than 10 years, having invested in 27
high growth companies with >15 exits

Value Added and Network: DGF invests in growth opportunities in small to mid sized companies, partnering with
outstanding entrepreneurs and adding core capabilities and value

Proven Track Record: Team has achieved very positive and consistent results (IRR and MICP)
Portfolio
Exits
Import / Export Software
Tax Software Developer
CRM Software Developer
IT Infra-Structure Outsourcing
Software for mobile ticket sales
B.I. Solution for Healthcare
On-demand printed products
Corp. Expanse Mngt. Software
Telecom R&D Outsourcing
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4. Introducing DGF Inova: Criteria &
Pipeline
CRITERIA & DIRECT SOURCING
Criteria (“sweet spot”):
SNAPSHOT
Pipeline Status since launch

STAGE – Revenues of U$1-3M with proven
business cycle and profitability potential
U$25M fund launched in January 2012

BUSINESS MODEL – Consistent and with
attractive dynamics (recurring revenue, etc)
2 investments completed

GROWTH – Potential >U$50M revenues in 5yr

TEAM – Stellar entrepreneur and team

INNOVATION – Innovative company

TICKET – Invest U$1-5M per company

EXIT – Clear exit opportunities
913 companies analyzed
Direct-sourced projects (from 30% to 70%)
Segment Representation among top prospects:
E-Commerce infrastructure: 18,5%
Cloud/SaaS: 15,4%
Web 2.0 / Internet Advertising: 13,8%
Sample Investment Theses:
Health-Web: 12,3%

Enterprise mobile software platforms

High-growth Cloud & Saas plays (long-tail)

SaaS solutions to drive on-line customer
acquisition for small and medium companies

Highly scalable web platforms in healthcare

Business Intelligence applications

Value-added distribution of virtual goods (retail)
Mobile: 10,8%
Financial Technologies: 7,7%
IT-enabled Services: 6,1%
Online Media: 6,1%
Education: 4,6%
Other: 4,6%
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5. Introducing DGF Inova – Value-Added LP
Base
The DGF Inova Fund has one institutional investor, plus 36 personal investors. The
group includes many of the “who’s who” of startups in Brazil (2/3), as well as
super-angel value-add investors from the USA and EU:

Serial entrepreneur in financial technologies, and one of top angel investors in Brazil

Founder and CEO of leading tax software in Latin America

Founder/CEO of leading import/export software in Brazil

Co-founder of Mercadolibre

Founder of Brazil's leading student loan company

California-based CEO and investor in 30+ ventures

Founder of Submarino.com and serial entrepreneur / investor

3 Angels in NY and Madrid with >100 investments in Brazil, Russia, India, Turkey, and
USA

Founder/CEO of Brazil's leading digital photo startup
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6. Topics: Current Venture Capital Market in
Brazil – “One VC’s ViewPoint”
Myths Worth Dispelling:

VC investing in Brazil is similar to VC in Silicon Valley
(Risk of “One Size Fits All” Approach)

The moment for good VC Investments in Brazil has passed
(Risk of “Following the Herd”)
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7. One VC’s ViewPoint –
Risk of “One Size Fits All” Approach

Dispelling Myth#1: VC investing in Brazil is similar to VC in Silicon Valley

YES – Bring Insights from a Mature into a Maturing Market


Increase direct sourcing and specialization


Sector-specific support for global technology companies
Best practice / governance at global levels
NO – Use the Same Investment Approaches

Only “proven models” are worth investments: great local and BRIC-specific
business models

“Spray and pray”: portfolio company monitoring is more demanding

Pay US-valuations: exit markets command different valuations

Assume follow-on investors will “be there” for good companies: don’t be so
sure – better be ready for follow-ons

Good companies will find exits: Again don’t be so sure. Best to find
companies with multiple paths to exit, and help them reach significant scale
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8. One VC’s ViewPoint –
Risk of “Following the Herd”

Dispelling Myth #2: The moment for good VC Investments in Brazil has
passed

Local VC eco-system has matured: specialized law firms, etc

Critical mass has been reached for companies to “hit it out of the park” –
consumption (e.g. mobile phone users), entrepreneur quality, cloud software
take-up, etc

Slowdown of “hype” is already creating interesting investment opportunities
(leaders emerging from overcrowded startup segments; more “prudent”
investments)
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