Ariel Arrieta knew he wanted to work in tech from the moment he got his first computer, an Atari 800XL, when he was 12 years old– a gift that changed his life. Today, he is cofounder and Managing Partner at NXTP Labs, an Argentine venture capital firm and accelerator that invests in early-stage tech startups. 

During the first Internet gold rush in the late 90s, Ariel was just starting his entrepreneurial career. He saw some of his businesses fail and others do really well. After he returned $2M to a friend who had invested $10K in his startup, he knew he wanted to be in startups for life. From there, he cofounded NXTP, which become one of the most active early-stage firms in Latin America, producing success stories like Auth0, their first portfolio unicorn.

In this episode, I sit down with Ariel to talk about the evolution of Latin America’s tech ecosystem, advice for founders, and lessons learned from being an entrepreneur and investor.

Since 2011, the Latin American ecosystem grew 100% yearly

Ariel believes that Latin America’s ecosystem has evolved and has more mature markets than in the beginning part of the decade. From 2011 to 2016, the average investment each year was between $300M and $500M in the market. Comparing that period with that of 2016 to 2018, the number range has grown to between $500M and $1.1B. SoftBank’s most recent $5B Vision Fund investment will be essential to maintain this momentum in Latin America. 

Listen to this episode to learn more about the evolution of Latin America’s ecosystem, what allows it to thrive, and what’s keeping it back, according to Ariel.

Raising $2M with a PowerPoint presentation

In 1999, four years after the Internet became more common in Argentina, everyone wanted to invest in Internet startups. Ariel was immersed in that world, building an ISP. He raised $2M in exchange for 95% of his company off of a Powerpoint deck– a deal like this would be unheard of today. 

Find out how this moment made an entrepreneur out of Ariel, and the ups and downs he experienced from the Internet gold rush to the 2001 economic crisis in Argentina on this episode of Crossing Borders.

Leaving the corporate world to work with startups

Inspired by his friend who had invested $10K in Ariel’s company, which in four years he converted into a $2M return, Ariel decided to leave his job at Fox and become an investor. His focus became early-stage investments in tech companies and finding the right business model for scaling. That’s when Ariel and his team began NXTP as a means to fulfill their vision to scale these investment opportunities.

Check out this episode of Crossing Borders to learn more about what it takes to scale startups and finding the right business model for that.

“We had a track record as entrepreneurs, but not as fund managers”

Fundraising for NXTP proved to be a challenge since most investors wouldn’t invest without a track record. The solution was crowdfunding $25K from friends within the entrepreneurial world. These contacts included Marcos Galperin from Mercado Libre and Alex Oxenford from OLX and Letgo, who– from a business standpoint at the time –were rivals. 

Listen to this episode to find out more about the entrepreneurs that came together to help Ariel and NXTP raise money for their fund. 

Ariel Arrieta has experienced both the golden days of the Internet boom, as well as the frustration of having to close a business due to macroeconomic factors like the 2001 economic crisis in Argentina. Those experiences have provided him with the resilience necessary to be an entrepreneur as well as an investor and mentor for other entrepreneurs at NXTP. 

Show Notes:

• [1:53] – About NXTP.
• [3:16] – Evolution of the ecosystem since 2011.
• [6:22] – Latin America’s ecosystem compared to the US.
• [8:15] – Local investors missing the “investment boat”.
• [10:10] – Chilean ecosystem and using government money in investments.
• [12:08] – Ariel’s entrepreneurial journey that led to NXTP.
• [20:00] – Biggest lessons learned from unsuccessful companies.
• [21:28] – On picking an idea for a startup.
• [24:57] – Finding the right team for NXTP.
• [29:21] – Advice to Ariel’s younger self.
• [31:26] – Ariel’s recommended books and blogs for entrepreneurs.
• [33:15] – What’s next for Ariel and NXTP?

Resources Mentioned: 

• Ariel Arrieta
• NXTP Labs
• Auth0
• Carlota Perez
• Y Combinator
• BID Lab
• Audible
• Secrets of Sand Hill Road: Venture Capital and How to Get It – Scott Kupor
• Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell – Eric Schmidt 
• Principles – Ray Dalio
• AI Superpowers – Kai Fu Lee
• Troublemakers: Silicon Valley’s Coming of Age – Leslie Berlin
• Brotopia Breaking Up The Boys Club Of Silicon Valley – Emily Chang
• Factfulness: Ten Reasons We’re Wrong About the World—and Why Things Are Better Than You Think – Hans Rosling
• Never Split the Difference: Negotiating As If Your Life Depended On It – Chris Voss
• Fred Wilson’s blog
• Internet Trends by Mary Meeker.