KaszeK Ventures Survival Guide: It’s Time to Switch to War-Mode

April 13, 2020

The following resource was shared with LAVCA by KaszeK Ventures based on a communication they sent to founders in their portfolio network. Fund managers and founders can reference this Survival Guide for input on the the far reaching effects of COVID-19 in LatAm and beyond.

Dear Founders and CEOs,
We are concerned with the health consequences of COVID-19 and hope you are taking the necessary precautions to protect your families, your teams, your communities and yourselves.

The decalogue below is about our business views on how to try to survive the current perfect storm. We know that many of you are already acting and we may sound redundant but we wanted to reiterate the message to be on the safe side.

We see an environment that looks very similar to 2000 and 2008 in terms of the need to act fast and the catastrophic consequences of inertia. We’ve been there in those times, and have seen the damage to companies with leaders who ignored the signals, were passive, and basically “hoped for the best.”

We believe that if you switch to war-mode, assume full leadership of the situation, and make all the tough necessary decisions, you will 1) ensure the survival of your company in the short term, and 2) emerge as a stronger organization, ready to seize the new opportunities that will be available in the medium and long terms when the crisis ends.

As always, we will be there alongside you in the trenches, so please don’t hesitate to reach out if the Kaszek team can help in any way.

1. RUNWAY, RUNWAY, RUNWAY
2. THE WORST IS HERE: Work assuming revenues are going to $0 and no new capital will be available for several quarters.
3. SURVIVING IS STRATEGIC, ALL THE REST IS FAT: Stop expansion plans; Take CAPEX to $0; Focus only on the core, shut down all other initiatives.
4. TEAMS MUST STRETCH: Implement a Hiring Freeze; Let go of all low performers; Do more with less.
5. HR IN THE TRENCHES: Cancel bonuses if you have them; Consider reducing salaries X% for the next few months; Eliminate all discretionary expenses, zero “perks” and travel; Bread and water until the sun shines again.
6. EVERYTHING IS RENEGOTIABLE: No contract is sacred; Terms with every supplier (rent, tech, media, services, supplies, etc.) should be adjusted to new reality.
7. BE ROI OBSESSED: Strongly reduce Marketing/Sales spending; Invest only in channels with immediate payback; Re-asses on a daily basis.
8. EVERY ADDITIONAL SALE NEEDS TO ADD UP: Ensure positive marginal unit economics; Get rid of product lines that generate a negative contribution.
9. FOCUS ON LIQUIDITY: Take control of your working capital; Anticipate receivables, delay payments; Stay on top of your operating cash flows and bank balances.
10. BE A LEADER: Be proactive and make the tough calls ASAP, any delay will limit your capacity to react. Act decisively, and communicate to your TEAM with clarity. It has never been more important to be safe rather than sorry.

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MADE POSSIBLE WITH SUPPORT FROM

LAVCA’s gender diversity research is made possible with support from IDB LAB, Member of the IDB Group. Access information about WeXchange, a forum hosted by IDB LAB that connects high growth women entrepreneurs in LatAm with investors and mentors.

Methodology

This list includes 114 senior-level women investment professionals who are deploying capital in early and growth stage tech deals in Latin America, as well as notable women angels investing over USD50k across multiple deals in the region in the past two years. All investors were vetted for inclusion by LAVCA Research.

Every year since 2016, LAVCA solicits nominations of top women investors in tech from the investment community. The inaugural list included 37 investors; the 2017 list added eight new investors. In 2018, complementing the peer nomination process, LAVCA reviewed the investment teams of all active Latin American VC funds, producing a list of 82 senior-level and 47 mid- and junior-level investment professionals. In 2019, those numbers jumped to 88 and 87, respectively, and increased to 103 and 97 during 2020.

NOMINATE AN INVESTOR

This list is not exhaustive; if you know of a junior- or mid-level investment professional working on Latin American tech deals who should be on this list, contact [email protected].

TOP WOMEN INVESTING IN LATIN AMERICAN TECH

LAVCA’s companion list of Top Women Investors in Latin American Tech includes 114 senior-level women investment professionals who are deploying capital in early and growth stage tech deals.