Javier Perez
This article is based on an interview with Javier Perez, co-founder and managing partner at Global Paytech Ventures.
Author Bio
Investor, venture capitalist, and payments innovator Javier Perez is the co-founder and managing partner of Global Paytech Ventures—a leading venture capital firm with a focus on payments technology. Strong corporate background in payments and payments technology as demonstrated in roles such as president of Mastercard Europe, head of VISA's EMEA office, and has mentored many young startups and brought three companies to IPO: Banca Argentaria, Mastercard and Adyen.
Transition in the Startup Funding Space in Recent Years
Market conditions are constantly changing – all of which are predicated by the region and the interest rates set forth by the central banking systems of each region. The COVID-19 pandemic increased the emphasis on the digital startup space since physical transactions were limited.
Thus, the need for digital transactions increased. Together with the ‘free money’ aka ultra-low interest rates, it generated a lot of interest from investors and enabled founders to raise at higher valuations with looser success metrics. However, as a result of the rising of interest rates to the highest level in the last 10 years, we are seeing a more stringent and conservative approach from investors, term sheets, and valuations of startups. Coupled with startups going out of business, the current environment for founders is getting increasingly more competitive in the funding space.
"From an investor’s point of view, experience matters greatly. It takes time to acquire industry knowledge and experience"
Investment Process
Our investment thesis for both our funds, Global Paytech Ventures I and Global Paytech Ventures II, is on early-stage paytech companies looking to raise seed, Series A, or Series B rounds where we can fund a portion of the round with the opportunity to provide guidance and influence strategic direction. We have selected companies with differentiated technology, working products, experienced management teams, and existing clients and revenue since these elements are a big indicator of potential success. Having held high-ranking management positions in multiple Fortune 50 companies and having the experience mentoring many young startups and taking three to IPO and making them household names, I recognize and appreciate ambitious and commercially-minded CEOs and teams who can showcase their product effectively and have demonstrated commitment to the project. Our processes involve screening meetings –inviting entrepreneurs to pitch their company; investor meetings – where an entrepreneur submits a non-confidential deck and provides online presentation and product demo; reviewing contracts with merchants, Direct interviews with clients, and with all that information, we get, we have an investment committee meeting. Should the committee favor the company and the founder, we then issue a term sheet. Upon acceptance, the real work begins. For us, we pay particular attention to product market fit.
Factors That Ensure Successful Investments
From an investor’s point of view, experience matters greatly. It takes time to acquire industry knowledge and experience. I’ve seen great successes as well as a few failures, so with my 40+ years of experience in the industry, I have a keen understanding of what to do and what not to do to achieve success. To me, having a strong sense of what the product does, how it changes the current systems, who the competing players are, what the market is, who is on the management team, who is on the cap table, and what is the goal/exit strategy of the founders are all very important factors to take into consideration. Our ability to work with and collaborate with founders and CEOs is a specialty of ours, and we particularly look for founders and CEOs who demonstrate agility, adaptability, creativity, and an open mind.
Advice to Peers and Beginners in the Industry
People matter most. Some of my best investment decisions are centered not just on specific technologies but on the passionate, analytical, and tireless founders who have the humility and tenacity to succeed. Additionally, solid relationships are the cornerstone of business development. Figure out what you want to do, read as much as possible, do your due diligence properly, don't cut corners, stay up to date on current industry events and developments, meet people in the industry, and get going!
