First Meeting of the ARCAP Investment Ecosystem in 2017

The first meeting of the ARCAP investment ecosystem in 2017 was held on February 2 at La Maquinita de Belgrano, in Buenos Aires, with an event aimed at Private Equity, Venture Capital and Seed investors within the different verticals of the Association.

· For those who are not familiar with the association, you can read an introduction to ARCAP here.

· You can also meet the ARCAP's Executive Committee here.

· Also, to read this post, we recommend you to access the slide presentation from ARCAP’s new phase here.

Introduction to the First Meeting of the ARCAP Investment Ecosystem in 2017

The first meeting of the new phase of the Argentine Association of Private Equity, Venture and Seed Capital (ARCAP) was held with the goal of presenting their plans for 2017 to the private investors within the different verticals of the association. The presentation was given by Marta Cruz, President of ARCAP, and by Diego Gonzalez Bravo, Vice President of Seed Capital and Executive Director of ARCAP and it was also open to the participation of all members. This first event brought together investors across all different verticals; industry services providers will be invited in the events to come.

The Main Goals of ARCAP

Marta Cruz started off by reviewing the emblematic case of Israel which, starting from scratch, succeeded in building the Venture Capital Industry during the 90s and 2000s, with extremely high-impact results. And, in reference to the scale of the opportunity that exists in Argentina and the rest of Latin America for Private Capital Industry growth, she affirmed: “Startups that were born and that today are extremely successful, are not so only because of their good valuations or their chances of going public, but also because they have created jobs and provided access to goods and services to people who couldn’t even imagine it, changing their lives.”

After the introduction, Cruz said:

And added: “We are being inspired by other similar associations in Latin America such as AMEXCAP, ColCapital and ABVCap. We are currently working together with them and we want to learn from those who have already been down this road''.

In addition to the main objective, Cruz stressed the specific and immediate goals ARCAP has, which guide the new phase they face ahead:

· Strengthen relations between the public and private sectors.

· Streamline transactions.

· Improve the competitiveness of the sector by working with regulatory bodies.

· Promote the industry by giving it greater visibility.

· Generate quantitative information about the industry.

Then, she introduced the Executive Committee

And also the Advisory Committee and Commissions (some with members to be appointed shortly):

To then recount which sectors are represented by ARCAP:

Cruz clarified: “Many more could be added here, for example, we don’t yet have the service providers, which could be very valuable for the association''.

Then, Cruz turned the floor over to Gonzalez Bravo, who elaborated on some points, such as the work that ARCAP has been doing with the Public Sector: “As a result of the Entrepreneurs Law, we have been in contact with the National Government, with the City Government, with the Provincial Government, with the Argentine Investment and International Commerce Agency, with the regulatory bodies that we have as representatives, looking into different action and work plans.”

The Discussion

At the end of the presentation, attendees were invited to join in on a discussion and, finally, the event was closed with a networking opportunity.

Some Highlights from the Discussion that Took Place after the Presentation

Strengthening the relationship between public and private sectors

  • “Measuring the impact of what is important for the country’s development in terms of job creation, exports, and fiscal resources that can be raised from the development of this industry is difficult, these are figures that, if not actually existent, economists won’t pay any attention to them, so you have to think as a strategist, looking at the size of the opportunity, and Israel is the benchmark, being the only country in the world that was able to create the industry. In order to create the industry, analyzing what was done from the public and private point of views is key”, Lisandro Bril, Alta Ventures Managing Director.
  • Having industry data is essential. With that, you can compare to other countries such as Israel and the United States and, based on that, you can tell an economist about the opportunity they are missing,” Nicolás Tognalli, CITES Manager.

Streamlining transactions

  • “ARCAP should promote Argentina as an investment destination. In the Private Equity industry, 95% of the equity invested in Argentina will have the developed world as its source. Therefore, promoting Argentina as an investment destination should be the main task, with first time managers in mind,” stated Carlos Garcia, Private Equity Vice President at ARCAP and Victoria Capital Partners Managing Partner.
  • “The problem that I see when I talk to first time or second time managers that want to raise capital is that, from Argentina, it’s very difficult. They don’t know who to call, they can’t spot investors, investors don’t receive them, and I believe that ARCAP should be the channel through which they can find each other”. Today, investors are thankful for the opportunity of listening to fifteen first or second time managers that can tell them what it is they want to do. But there’s no way for them to find each other. You have to be the framework for them to meet,” José Sosa del Valle, Partner at Lexington Partners.

Improving the competitiveness of the sector by working with regulatory bodies

  • “Argentina is a very difficult country for investing; it is really bureaucratic and complicated. It is very important to work on simplifying tasks in terms of the little, trivial things, and this takes a significant amount of time”, Carlos Garcia, Private Equity Vice President at ARCAP and Victoria Capital Partners Managing Partner.
  • “We have to promote the Private Equity business as something positive, constructive, and healthy for the new Argentina we now have. We must change the negative connotation of the word fund, and that only changes with experience, with good practices, with success stories, and with exemplary business behaviour”, Carlos Garcia, Private Equity Vice President at ARCAP and Victoria Capital Partners Managing Partner.

Promote the industry by giving it greater visibility

  • “A very important function is going to be presenting the ecosystem to others like the U.S. Up until now, these efforts have been in the hands of individual players, but we should present ourselves as a unit. It’s important to create those bonds that make it possible for us to have the follow-ons to our investments”, Vanesa Kolodziej, Xpand Ventures, Clarín Group Corporate VC-Business Accelerator Director.
  • “There are some startups that are becoming very noticeable and I believe they are a natural spokesman for messages about the importance of the Venture Capital industry”, Ignacio Peña, Surfing Tsunamis Founder and CEO.
  • “I want to see how ARCAP reaches the provinces. For those of us who don’t live in the capital city it is very expensive. I think training is the most important thing to work with ARCAP”, Germán Gimenez, Greendemia COO and Board Member.

Generate quantitative information about the industry

  • “There’s so much to do, for example, to start gathering information, from impact studies and industry monitoring, up to transaction level and ROI analysis”, Lorena Suarez, ARCAP Research and Corporate VC Commission leader and Wayra Argentina Country Manager.
  • “I think that, when thinking about the research goals at a stage like the one ARCAP is in today, generating content that lets unsophisticated investors in the asset to better understand what it is about and to transfer that institutional private capital to investment projects or funds is much more important than making an impact study at the national level, which takes much longer'', Juan Savino, Advisor at ARCAP and Sabertia Capital Partners. Senior Vice President