Women Make Up Just 22% Of Latin America VC Fund Partner Count

Women’s participation in funds in the region remains low, according to an Endeavor report, and “women are being excluded from how we design the future”, Anna Raptis, founder of Mexico-based venture capital firm Amplifica Capital, tells Bloomberg Línea

Photo: Hollie Adams/Bloomberg
July 04, 2022 | 03:15 PM

Bloomberg Línea — Women’s participation in Latin America’s venture capital space remains low. In the fourth quarter of 2021, Endeavor interviewed more than 120 general partners of venture capital (VC) funds investing in the region and found that, on average, women make up 22% of the total partner count.

According to Anna Raptis, founder of Mexico-based venture capital firm Amplifica Capital, VC is where new ideas come from, and where the future is being created, and which is why the low participation of women is of concern.

“Without women at the table making investment decisions, women are being excluded from how we design the future,” she said in an interview with Bloomberg Línea.

Amplifica Fund 1 is the first female-focused VC fund in Mexico, and which invests in early-stage startups, with a target fund size of $10 million.

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“I was always interested in investing with purpose, investing to solve challenges in Mexico,” Raptis says.

She adds that it is obvious that there is not enough money going to female entrepreneurs. And the source of the problem is that there are not enough women investors.

“Ninety percent of those decisions from VCs are made by men. So it should be no surprise that 90% of the capital goes to all-male teams,” Raptis says.


“We are looking to get more women as investors, and are also investing in teams that are either women-led or have goods and services focused on women,” she adds.

More than 70% of Amplifica’s fund investors are women. “There is not another VC fund like that in Mexico, or in Latin America, so we are happy to bring new investors to the space,” she says.

What VCs look for in Latin America

More than the business model, for Latin American VC investors, the team of founders is a more important factor, according to Endeavor’s new report, which states that 98% of venture capitalists recognize the founding team as the most important factor for the success of an investment.

At the same time, more than 80% of funds in the region have less than $200 million of assets under management, while 82% of funds focus on early-stage and only 3.6% focus on late-stage, cross-over, and pre-IPO.


In the study conducted by Endeavor, 82% of VCs said they usually use pro-rata rights as a clause to invest. This clause guarantees the investor the right to participate in subsequent rounds to keep the percentage that the fund holds within the company, while it is diluted as it advances in the investment rounds.

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Last year was a landmark year for the global venture capital industry. In Latin America, a PitchBook report shows that VC investment in 2021 was three times higher than in 2020.

According to Endeavor, this growing venture capital investment does not only stem from a global trend of investment rounds but also has to do with the consistent increase in the number of businesses being created per year since 2017 in the region.


The region’s network of entrepreneurs also points out that the ecosystem has become more dynamic since well-renowned funds such as Andreessen Horowitz and Sequoia started investing in the region.

“But arguably the most significant move was Softbank’s decision to create a $5 billion fund for Latin America in 2019, a fund larger than the total amount invested in any previous year,” Endeavor said.

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According to the Endeavor report, to originate an investment deal in Latin America, VCs see that there is a collaborative investment environment: 75% of deals are referred by a network of VC investors, other venture capital firms, professional networks, existing portfolio companies, limited partners and resident entrepreneurs.

And the funnel is highly selective. According to Endeavor, VCs invest in only 3.5% of potential companies. Taking 200 meetings with founders, for example, only 41 deals move on to the next stage to be reviewed with the investment committee, while 15 deals go through due diligence. Of those, eight term sheets are offered to founders and only seven deals are closed.

 VCs invest in only 3.5% of potential companies, says Endeavor's report. Source: Endeavordfd

In the analysis and negotiation process, Endeavor points out that 81% of the venture capitalists consider the team as the most important factor to invest, while 61% of the VCs consider the capacity to grow the business as the most relevant factor. Ninety-one percent of VCs use unit economics as a primary metric, followed by churn and sales margin.

VCs consider founder dilution the second most important factor when deciding on a valuation, while pro-rata rights are by far the most commonly used contractual features.

Asked how VCs can add value to companies, investors said the two biggest challenges that companies face are attracting and retaining talent, and expanding into new markets.

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Therefore, the most popular value-adding activities carried out by VCs are supporting fundraising for the company (82%), providing strategic guidance (74%), and supporting business development (68%), the Endeavor report states.

On average, investors interact with Latin American entrepreneurs two to three times a month. According to the report, the vast majority are in contact with their portfolio between once a week and once a month.

And with regard to investment results, investors believe that the founding team is the main driver of successful investments, followed by the business model.


The main reasons for investment failure, according to VCs, are a product’s lack of market fit, and a conflict among the management team.

Only 2.9% of the portfolio companies of those VCs have a successful exit through an IPO, while the majority (37.8%) exit via mergers and acquisitions.

How VCs view Latin American countries

Looking at the startup sphere in the region, VCs see Mexico, Brazil, and Argentina as the “star” countries with strong traction and strong future potential.

Endeavor State of VC in LatAm Report. Source: Endeavordfd

Meanwhile, Chile, Peru, Uruguay and Colombia are seen as “rising stars” with solid current traction and strong future potential, while Paraguay, Venezuela, Bolivia, Ecuador, and Central American countries have seen no significant investment activity to date.

Most funds in the region are still new, and the size of funds for Latin America is around $50 million to $99 million on average.

Given that 2016 was when VC activity became most intense in the region, and assuming a 10-year fund cycle, many VCs had not yet liquidated their first fund at the time of Endeavor’s study. Half of the decision-makers in the VC industry in the region are new investors.

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“VC is an outlier asset class, and Latin America is no exception: the top 5% of our data sample make up funds with sizes from $500 to $1 billion; 33.3% of our data sample (21 funds) stated they have unicorn companies in their portfolio,” according to the Endeavor report.

Funds with unicorns in their portfolio tend to be in the game longer, with an average first-year vintage of 2013, based on survey responses.

As for ecosystem trends, 90.1% of VCs consider that the Latin American ecosystem is still in the early or middle stages of its economic cycle. Most VCs consider fintech as the most promising sector, and see macroeconomic risks such as interest rate hikes, inflation, and geopolitics as the main risks to investing in Latin America.

According to the Endeavor study, the Latin American startup ecosystem still lags behind its potential when comparing venture capital to the region’s GDP.

The venture capital industry represents the smallest proportion of GDP in Latin America, smaller than when compared to other regions.

“While Latin America has seen an explosion of money flowing in to the startup sphere, the level of that funding relative to the market these entrepreneurs are in is still relatively small. There is still a considerable amount of room for the VC ecosystem to grow, indicating that Latin America will remain a dynamic ecosystem for the future,” the Endeavor report states.

Despite concerns of a more restricted market for risk assets, in late June Endeavor announced its largest VC fund, with Catalyst Fund IV raising more than $290 million, bringing Endeavor’s total assets under management to more than $500 million.

The fund invests in large part in emerging markets, especially Brazil.

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