How Valor Invests and Operates

Valor was founded in 2011 as the pioneer cross-border venture capital firm bridging the US, Brazilian and international tech communities. We invest in early stage tech companies in Brazil and international companies looking to expand into Brazil and the region. We are stage and sector agnostic. We are full lifecycle investors. We invest in business models that are only possible through the use of technology and, most importantly, we partner with companies that we believe are best positioned to leverage our relationship-capital and cross-border playbook.

Founding Principles

I. Bridge between two great countries and societies

Building on the successes of Ambassador Sobel being a bridge between two great countries within the public sector, we had a great opportunity and responsibility to continue this mission within the private sector and specifically the tech communities which we are deeply entrenched and passionate about. We are proud to bring people together of common interest and goals to create value and make positive impact.

II. Always take a people first approach

It’s all about people. We have always taken a people-first approach to building our team and culture, which is reflective of the LP’s and entrepreneurs we have partnered with. Part of Valor’s founding history and a key influence was Ray Chambers, who is not only one of the most creative people in the business world (founder of Wesray, a pioneer in the early LBO/PE industry), but also being a leading global philanthropist having founded and supported many organizations including Malaria No More, The Boys and Girls Club, Mentor.org, and most recently being an Ambassador to the UN and WHO. Zero sum games in business rarely work out in the long game. Finding balance and taking a solomon approach to how you partner always produces better outcomes.

Empathy is one of the things we value a lot. The ability to be able to read how other people are feeling about a specific situation, whether it’s a client or an end user, a business partner, or your employees. The ability to understand what’s going through the head of another person we think, is really significant.

“People who are dismissive with wait staff and other types of things tends to be a red flag. If you’re not able to treat people in different social positions in a fair or dignified way, that’s a red flag.” – Michael Nicklas

Tech is transforming our lives and how we work however, hardware and software requires human involvement and innovation. Therefore, companies need to attract top talent, which requires cultures and policies that meet our time. In a study from February 2020, McKinsey & Company highlights how companies have to think differently and upgrade their cultures to attract top talent. Here are key insights which we subscribe to:

• Companies can’t just adopt 21st century job titles. They need 21st century working practices and company culture to match it.
• Today’s top talent wants meaningful work, opportunities to develop and grow, and flexible working conditions.
• Employers can’t wait for new talent to find them. They have to go after the best candidates.
• To attract and retain new talent including diverse hires, companies need to work on organization/ wide culture change or create silos where new cultures and talent can flourish.

III. Vision driven

Our Managing Partners Scott, Antoine, and Michael have extensive work and life experience in many developed and emerging markets. This provides us with unique foresight and pattern recognition skills to identify great opportunities. It’s not just about seeing these opportunities, but acting on them that completes our definition of being vision-driven.

1. Serving the unmet needs of the middle class. One key foresight is that the greatest opportunities of the 21st century will come from serving the unmet needs of the middle class. As a result, we anchored our investment strategy targeting the industries and sectors that support the growing middle class such as financial services, health and wellness, and education. (bridging the digital divide in the digital nation)
2. Applied technology and business model Innovation. While many venture capitalists are looking for the next moonshot (we are as well) we saw that there were many opportunities across industries in Brazil to apply technology to reduce costs and drive productivity gains. In addition, we have seen these solutions becoming the social infrastructure for the country and the Brazilian moon shoots.
3. Reverse innovation or trickle up innovation is an innovation first seen or used in the developing world before spreading to the developed world. If Brazil was quickly becoming the digital nation (5th largest digital economy) then it would only be a matter of time before we saw Brazilian founded tech companies become global category defining companies. Lets not forget that Facebook and Instagram were both Brazilian co-founded. We are already seeing this growing trend in our portfolio.

How we Operate

With these founding principles, Valor pioneered a cross-border approach to venture capital being a bridge between the US, Brazil, and the global tech markets. Initially, it was about supporting our companies internationalization, but evolved into a broader view on how international connectivity is key to unlocking value in emerging markets.

In addition to providing operational support by leveraging our partners experiences from having scaled and IPO’ed the first internet telephony company in the 1.0 boom, to being the CTOs of several Fortune 500 media companies, and heading the operations for Google and PayPal in Brazil and throughout Latin America. We realized that it was equally important to support them, raise international institutional capital, attract intellectual capital, facilitate geo-arbitrage exit opportunities, and foster greater ecosystem development. This cross-border approach became our value creation playbook, our key differentiator in the market, and proved to help shape many outcomes.

• International Institutional Capital: leveraging our global network of co-investors and collaborators, we attract top-tier US and international VC firms, financial institutions, and strategic investors to our portfolio. Valor has made capital introductions to many of its portfolio companies to world-class institutional investors to support their growth financing, including Blackstone, General Atlantic, Goldman Sachs, and Softbank, amongst others.
• Intellectual Capital Flow: we connect our portfolio companies to subject matter experts that can help them scale and accelerate growth. We have facilitated several senior hires across the portfolio and maintain an extensive database of qualified candidates for C-level positions.
• Geo-Arbitrage Opportunities: our vantage point as global investors and entrenched in the US and Brazilian tech ecosystems allows us to help create cross-border liquidity opportunities for our companies. Stone’s Nasdaq IPO in 2018 is a perfect example of the strategy: by going public on the Nasdaq, Stone was able to attract investors that understood the company’s growth profile and value at higher multiples than those conferred to technology companies in Brazil.
• Ecosystem and Development: leveraging our international expansion playbook developed at Google, Paypal, and NCR, we help category-defining global companies expand to Brazil. We have helped Udacity, Coinbase, Celo, Viagogo, and several other portfolio companies set up operations in Brazil, navigate the country’s legal and regulatory environment, source talent, and conduct business development. Ultimately this further develops and supports the growing ecosystem at large.