Curating Value Globally

One of the greatest export successes of America is the proliferation of startups in numerous new ecosystems around the world. The Silicon Valley model is everywhere, and can drive success as a framework for those ecosystems. However, some of the basics of the model are ill-suited to non-U.S. locales. Local culture is a crucial driver in determining the likelihood of success of founders and for companies.

Local accelerators and capital understand this, but generally can take a local startup only so far. They generally don’t have the expertise to help break into and succeed in non-local markets, nor the business model of mentoring to forge institutional proficiency and the confidence that arms perseverance. And most are limited in their ability to connect to later-stage capital.

ExtraVallis is a bridge between local investors and global markets and US capital. We have 25 years of expertise in operating and investing in international markets and are intimately familiar with the local business cultures in which we operate.

We look for startups where we can add value. We then invest incrementally while providing intensive mentoring and consulting on startup legal and corporate structure, revenue modeling, and market access and entry, including the US market. We work with companies to set-up appropriate KPIs, which, if met, can result in us leading the seed round of our portfolio companies and linking to growth stage capital.

Increasing the Success Rate

And this extends to our firm’s philosophy. The 90%+ failure rate of traditional venture capital has become conventional wisdom. The standard 2/20 fee schedule (2% management fee a year and 20% carry) means it will likely be 10 years before a fund can be judged a success or failure, during which time a fund manager has raised three funds, all paying 2% management fees. With this model, the incentives to find the best companies, at the best valuations, are muted. Badly incentivized funds invest based on FOMO and follow the leader because it is easier and can be justified by a 90%+ failure rate. And thus misalignment between many funds and their LPs is a reality.

We believe immersion, discipline, and focusing on value in startup discovery is the best way to align with LP interests. We aim to achieve a far greater success rate than the conventional wisdom suggests is possible. Our discovery is focused on a limited set of industries/verticals and in countries where we have extensive cultural and ecosystem expertise, that have huge market potential, and whose founders are motivated and coachable.

We invest frugally at the earliest stage, and contemporaneously provide substantial mentoring and advice. We help new startups build managerial and board processes, help define milestones, timetable and financial targets. We agree on achievable KPIs as conditions to further investment, and lead that seed level investment. Our focus is less to build one or two unicorns but to instead consistently exit the majority of our portfolio companies more quickly with lucrative valuations.

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Mentoring/Consulting

• Legal and Corporate Structure

• Revenue Modeling

• Market Determination and Access

• US Market Entry

Investment

• Pre-Seed Investment

• Joint KPI development leading to seed funding

• Follow-on Seed

• Act as Lead

Better Success Rate

• Focus on value

• Longer, more involved founder relationships

• Cultural understanding of our markets

• Limited industries/verticals

• Many more rapid and lucrative exits