Part of their own profits • TechCrunch

Atman Capital, a year-old early-stage venture firm partially backed by about 20 founders, is upping the deal for these individual limited partners.

It promises to give credit to any of them who refer a successful deal to the venture firm in the form of some accrued interest on the firm’s own profits.

It’s an interesting turn for the firm, which was founded last year by Brazilians Pedro Sorrentino and Pedro Dias and is investing in startups in the US and Latin America. In an increasingly tight capital market in which Atman has closed with $9 million for a fund that is targeting $30 million, the added incentive, on top of the 80% of profits LPs typically receive from successful results, it is also smart.

“We talked to over 100 founders and asked what they wanted and what was important to them. The most common response was a desire to tap into their personal network, as all of these founders, through partial secondaries, are very active angels,” Sorrentino told TechCrunch. “That’s when we came up with the model of paying them interest in the fund while doing deals together as a community.”

Dias spent seven years at JP Morgan and another couple of years at Riskified before teaming up with Sorrentino to found Atman. In February 2021, Sorrentino left OneVC, another cross-border company he founded, to focus on developing Atman Capital.

So far, the new firm has six portfolio companies: Pipefy, Streetbeat and Aestuary in the US and Bamboo, a stealthy fintech startup, and LoopiPay in Latin America.

“Investing in both geographies makes us better investors and makes us a much more interesting value proposition as a company because we have a presence in both regions,” Sorrentino said.

The fund plans to invest in the pre-seed and seed stages with checks averaging $750,000 to $1.5 million. It is targeting B2B, software, commerce, consumer, and fintech startups. LPs are a mix of ultra-high net worth individuals, family offices and institutions, in addition to the founders.

So far, Atman also has over 20 founding LPs that make up his “Egregore”, which means a collective of people who share values ​​and principles with the skin in the game. Currently 70% are from Latin America and 30% are from the US Founders include John Sung King, founding CEO of publicly traded Five9; Alexandre Liuzzi, co-founder and CSO of Remessa Online, which was acquired by EBANX; Adhemar Milani Neto, Founder and CEO of KOVI, and Doug Storf, Founder and CEO of Swap, among others.

The advantage of becoming an Atman LP rather than continuing angel investing, the two say, is that these founders have a “safe” place to brainstorm with their peers.

“There is a limit to the honesty we can bring to the table with your board, or even your executive team, so we will try to make sure that we are one of the most comfortable places for true intellectual discussion while also making money together.” Sorrentino said. “It’s a community-driven fund.”

It’s also a matter of convenience, they both say.

“Many of the founders are still running companies and don’t want to become venture capitalists,” Dias said. “There are many K1s, their tax situation is complicated. In this way, we manage operational efficiency.”

The firm’s investment thesis, according to Sorrentino, is to target second- and third-time founder-led companies looking to minimize cash burn with a blueprint for profitability.

Atman, the pair say, wants to back pre-seed and early-stage startups that are “operating like they’re Series A.”

“They shouldn’t be afraid to have tough conversations and worry about investor updates while managing cash in a much more mindful way,” Sorrentino told TechCrunch. “We believe that the [fundraising] the environment will be much more difficult in the next one to three years. We don’t think we have seen all the pain that is to come.”

Despite the venture capital slowdown, venture capital firms in Latin America continue to raise funds. Brazilian impact investor Positive Ventures is also targeting a $30 million fund, of which it has raised $20 million so far. Its newest fund, Positive Ventures DIF II, was designed to invest in early-stage tech companies that are “challenging the massive challenges of the global south,” according to co-founder and co-CEO Fabio Kestenbaum.

In August, Positive Ventures announced the first investment made through the new fund. He co-led with the Collaborative Fund the pre-seed round of Ruuf, a Chilean marketplace that connects homeowners, solar panel installers and lenders. They were followed by Juan Jobet, former Chilean Minister of Energy, who also joined the board, and Harvard Innovation Lab in that investment.

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