From EdTech Entrepreneur to Tech Investor: The Journey of Andres Balcazar, Chief of Staff at Lido
I had the pleasure of interviewing Andres Balcazar, Chief of Staff at Lido. Andres, an Industrial Engineer by training, was previously investing in the B2B vSaaS space and comes from a background of strategy consulting. He is also an angel investor and former EdTech entrepreneur.
How did you break into tech investing?
When I launched WePrep in college, I was researching key drivers for startup success and was introduced to the world of VC. It’s an interesting part of the startup ecosystem because you get a birds-eye view of the market and can help multiple startups simultaneously. Around the same time, I was helping a PE investor run diligence on some personal projects and really enjoyed the work. I was starting Senior year at Northwestern, only had a few classes left, and decided to find a program where I could formally learn the ins and outs of VC. I ended up joining Vencapital as a fellow. Shout-out to Henry Ogbuagu for putting together such a great experience.
At Vencapital, we heard from VCs, learned about evaluating startups, did some deal sourcing, and pitched startups. It was a fantastic 8 weeks and gave me conviction that I wanted to be in the VC world at some point in my career.
Upon graduating, I joined Oliver Wyman as a Consultant, where I primarily worked in the Private Capital group running CDDs for PE firms buying/selling EdTech companies. The work was invigorating and fine-tuned my investor mindset. At the same time, I wrote my first check as an angel investor, which was incredibly exciting and, having acquired the consulting skillset, continued my journey into early-stage venture at Fractal Software.
That was my path, but there is no standard way to break into tech investing. People seem to stress a lot about breaking into consulting or banking then breaking into an investing role or think that they need an MBA first. I do not think that’s true. In fact, some of the people in the industry who have inspired me the most did not have that ‘traditional’ background.
Aside from angel investing, you mentioned working at Fractal, a Venture Studio — what are some of the nuances and benefits of a VS for those who aren’t familiar?
Great question. Traditional VC firms raise money and invest in already created startups. On the other hand, you can think of a venture studio as a startup builder — they help aspiring founders incubate and then build out startups.
There are multiple benefits to the studio model. Three main ones are:
- De-risking a startup: Venture studios generally work closely with startups to refine their ideas, validate their assumptions, and develop a minimum viable product (MVP). This process can reduce the risk of failure and quicken time to market. In the case of Fractal Software, for example, startup ideas are researched beforehand, so founders have an increased chance of success by being provided with already validated ideas (including MVP features, optimal GTM strategy, etc.).
- Hands-on support: Venture studios provide hands-on support to founders in the early stages, and the studio’s team usually has expertise in product development, marketing, fundraising, sales, and puts a lot of focus on helping founders in these areas.
- Founder matching: Studios oftentimes not only recruit entrepreneurs in residence (EIRs) to run an incubated startup but also help these potential CEOs/CTOs match up before launching an idea. This helps decrease the chances of poor founder chemistry.
What has been your biggest challenge when it comes to finding the “right deals”?
I’ll speak in terms of angel investing. A lot of startups with co-founders only have one of the founders pitching the idea. For me, it’s important to hear from all the co-founders to get a sense of passion about and conviction in an idea across the full founding team. It’s also helpful to see the founding team pitch together to get an initial sense of co-founder chemistry (one of the riskiest parts of an early-stage startup).
What major trends do you expect to see in technology innovation over the next 5 years that excites you?
I think a lot of technologically laggard industries that have traditionally been reluctant to improve their tech stacks are going to quickly realize the need for and adopt new software — specifically software tailored to their specific workflows. This is especially true for industries with companies whose day-to-day operations consist of complex workflows and multiple stakeholders (e.g., trucking companies, higher education universities). We’re starting to see this take place already and is a reason for the growing popularity of vSaaS. COVID-19 driven digitization is another reason old school industries are more comfortable with software now.
If you had to share “words of wisdom” with a Founder who’s about to start their own startup, what would they be?
If you start a company with a co-founder, really make sure you work well together and are comfortable providing each other with transparent feedback (not driven by egos but by the shared mission of making your startup a success). Co-founder relationships are a very common reason for startup failures.
On a less important note, if you are looking for investors, be that institutional investors or angel investors, I suggest not asking them to sign an NDA when you first reach out. This is my personal take, and some people may not agree, but you have to be aware that you are asking potential investors with busy schedules to take time out of their day to hear about your idea. Asking them to sign an NDA is just an additional barrier to entry in terms of getting conversations started.
How can our readers follow you on social media?
I am most active on my LinkedIn — to anyone in the startup / VC world feel free to reach out. I am always looking to help the ecosystem where I can and learn from others.
This was very insightful. Thank you so much for joining us!
This was great. Thanks for having me.
