Pretty much everyone knows Endeavor, which is a thriving global community for high-impact entrepreneurs. What you might not know is that Endeavor also has a co-investment arm called Endeavor Catalyst, which has over US$ 500 million in assets under management and has participated in rounds alongside General Atlantic, a16z and Softbank, among others.

Endeavor Catalyst has been active since 2012 and works with a long-term view in emerging markets. So far, it has seen 49 of its investees reach unicorn status – including Rappi in Colombia and Careem in Dubai – and it has just announced its 4th fund, closed at almost US$ 300 million.

Having been managing director for about a decade, Allen Taylor has been with Endeavor since 2006 and has a lot to share about entrepreneurship in developing countries.

Today Allen and I talk about:

• How recent changes in financial markets can impact investments in Latin America
• What's different about having founders invest in other founders
• What Endeavor Catalyst plans for its new US$ 292 million fund

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Brian Requarth

Allen, this is fun, thanks for coming on [the podcast]. Small fun fact for the listeners here: Allen and I are from essentially the same area. We grew up in that same area and had the same age. We found out this is a small world after all when two gringos ended up in Latin America. We were both in Argentina probably at some point, maybe around the same time.

Allen Taylor

Yeah!

Brian Requarth

So it's fun, man. And now we're both in this ecosystem. It's really great to have you on [the podcast] and I'm excited as we're getting into our chat today. 

Allen Taylor

Awesome, thanks for having me! And yeah, it is funny to have discovered so many years later that we actually probably played high school sports against each other, right? But we didn't know it at that time, so…

Brian Requarth

… Exactly. That's definitely happened, I'm sure. So let's start off just with some of the basics here. Kind of similar to Latitud, which has many different elements to it, Endeavor has been around for a couple of decades now, and you're running Endeavor Catalyst, which is a coinvestment fund inside the non-profit that's Endeavor.

Allen Taylor

Correct.

Brian Requarth

How did that come about? And could you tell us a little bit more about how all of that operates?

Allen Taylor

Yeah, sure. I think many of the folks here will be familiar with Endeavor, since we've been doing this work for 25 years. Endeavor was actually born in Latin America, in Argentina and Chile, back in 1997. But for those who don't know it, it's a non-profit model, it's a mission-driven organization. We exist essentially to try to help partner with the very best entrepreneurs at the scale-up stages across emerging markets globally.

So, today Endeavor is in 41 countries, we have about 500 full-time team members on the ground, in 63 different cities. About half of that is in Latin America. It is still today one of our most important regions, parts of the world.

Yeah, it is a little bit like Latitud in that there are different pieces of it. This is our 25th anniversary this year. But Endeavor Catalyst, which is essentially a venture fund built on top of Endeavor, is about 10 years old.

We can get into a little bit of my story. I've been here 16 years, before we had a fund. Then we started the fund and it became a part of what Endeavor is doing. To explain how that all ties together, we really fundamentally believe entrepreneurs are the agents of change in these places. It's the remarkable individual theory of societal change. If we can build the networks of mentorship and smart connected capital around them, they'll create jobs and wealth, and become role models for the next generation. And that's what Endeavor's work is all about. Endeavor Catalyst, then, is just investing into those same Endeavor companies.

Brian Requarth

Full details here: I'm an Endeavor Entrepreneur, a huge believer in the organization and in Linda [Rottenberg, Endeavor's cofounder], back in the day, several years ago. Kind of fell in love with what you guys are doing. In fact, I've taken some inspiration into what we're doing. It's always good to take a dose of something here, and Endeavor's a huge inspiration for us.

Allen Taylor

Yeah, which is awesome.

Brian Requarth

And also Endeavor Catalyst invested in Latitud, for full disclosure here, in our last round. So, lots of overlap. You've been a supporter of our rolling fund as well. It's cool to have all these different areas we cross over. Part of our mission is to graduate the next generation of Endeavor entrepreneurs. It's something we talk internally, so it's really cool to have this kind of connection here.

Let's get into the fund. You'll probably share more about the funding you just raised. But this is a rules-based fund, right? I find this really interesting, and you stress that a lot. So, what are the rules?

Allen Taylor

Good question. Basically I'll tell you a little bit about where this comes from. If you think back 12 years ago, Endeavor's doing this work in emerging markets. We got some great entrepreneurs in the network and in the portfolio. Folks would say "hey, why don't you guys start a fund? It seems like a good idea. You have great access to great entrepreneurs."

And the answer was always "well, that's not our business, and frankly, we don't want to pick and choose among our children, say yes to that Endeavor company but no to that other one." For a long time, we just kind of accepted that as the answer. 

But it was about a little over a decade ago that Reid Hoffman, the cofounder of LinkedIn, who was a partner at Greylock and sits on the global board of Endeavor; Nick Beim, from Venrock, who's also an Endeavor global board member; Linda Rottenberg, our founder; myself; and a small group basically tried to question that assumption and say like "okay, hang on a second, what if we could figure out a way to do this?" So, the rules-based system was a direct response to this idea of "well, we'll only invest in Endeavor entrepreneurs but we'll let the market essentially decide which ones we'll invest it". 

So it's programmatic investing, if you want to think about it that way. There are three basic rules: we only invest in Endeavor entrepreneurs-led companies. We only invested in priced equity rounds of US$ 5,000,000 or more, so that's generally series A, B, and C. We can come a little bit earlier in situations like yours, Brian. If you're an Endeavor entrepreneur starting a second company, we might be in early. But a lot of the times we're a series B investor.

And the most important rule is: we're not a lead investor. We're a coinvestor, a follow fund, and we follow a professional fund into a round. Whether that's a regional VC fund, like Kaszek, monashees or ALLVP. A global VC fund, like Sequoia, Andreessen, Accel. Or frankly a global growth equity fund, like General Atlantic. We're always following and investing up to 10% of a round, on a smaller round, up to a US$ 2M check.

What that creates, then, is this system where we get to still stay on the same side of the table as it were, as Endeavor entrepreneurs. We're not setting prices, terms, negotiating with our entrepreneurs. We remain as ally, friend, and mentor. And it gives us this very unique and programmatic way of investing into the Endeavor portfolio.

Brian Requarth

I mean, it's pretty cool if you're a founder, raising a US$ 10 million dollar series A or whatever, and you're like "hey, I've got US$ 1 million from Endeavor already committed."

Allen Taylor

It's a pledge, right? It's a pre-commitment essentially to your round. The day you get selected to Endeavor, we commit: whenever you go to market, you can tell the world that we're committed to the round.

Brian Requarth

Endeavor in and of itself is a great stamp of approval, and then having the financial backing also is pretty cool. What's really fascinating about this is that around 30% of the Endeavor Catalyst investor community is made up of Endeavor Entrepreneur themselves. So what can you tell us about this movement of founders investing in founders? How can we get this even more distributed in LatAm? I think that Brazil even created their own local fund. You've spun all these different initiatives, and got the same founders to reinvest. Talk a little bit more about how you've seen that and how we can promote that even more.

Allen Taylor

At the end of the day, we're ecosystem builders. That's what I really think about, when I think what Endeavor is trying to do here. Our philosophy is really of, by, and for entrepreneurs. 

This is the idea of, if you think about the lifecycle and journey of an Endeavor Entrepreneur, you start a company, you scale a company, you maybe exit that company and start another one. And maybe you start to become an angel investor, or start a venture fund. It's the idea of essentially getting the operators, the builders, the founders who helped build generation one and two of companies in LatAm to become the angel investors, or even the venture capitalists and the mentors of the next generation.

We used to call that "giving back". Eventually that kind of pivoted into "paying it forward". We really do believe in that a lot. We're pumped to see that other organizations and networks have adopted some of that same language. Right around kind of paying it forward, and entrepreneurs backing entrepreneurs.

I guess, to give you a little bit of the data of that, we're now on our fourth fund, we can talk a little bit more about it. But even back in the first fund, we went and intentionally took very, very small LP checks from our own entrepreneurs. We were kind of saying, "hey, we want you guys to be limited partners, LPs, investors in this fund with us."

Growing up to today, there's a little over a third of the fund in terms of Endeavor entrepreneurs as our LPs. If you play it forward, you can imagine a world where most of the LPs are successful Endeavor entrepreneurs.

Beyond just Endeavor entrepreneurs investing in the Endeavor Catalyst Fund, we also love to see Endeavor entrepreneurs investing in each other, right? Investing directly as angels, supporting and becoming LP in up-and-coming platforms like Latitud. That's super awesome, when we see that happening. 

The most extreme version of this, and that's happened a handful of times, is when Endeavor entrepreneurs actually grow up to become VCs. And this is now starting to happen in emerging markets around the world. 

Most notably, two out of the three original cofounders who built MercadoLibre, most people know this story, went out to found Kaszek, Nicolas Szekasy and Hernán Kazah. I remember those guys launching Kaszek at an Endeavor event, back in 2011. We were like "hey, look, Endeavor entrepreneurs becoming venture capitalists!", right? That's happened with Mountain Nazca in Mexico, and I'm sure it will happen more. So, we're excited about it.

Brian Requarth

If you think back to 16 years ago, you were joining Endeavor. Obviously, Endeavor was an important organization then. But, if you think about the impact that it's had, it's been exponential in its growth and in the amount of countries it's in. 

Could you visualize what Endeavor would become? Was the writing on the wall when you joined 16 years ago, and you were like "oh, this is no-brainer, I want to be a part of this and I can see where this is going"? Or was it a bit of a bet also, and there was some uncertainty around what the future of Endeavor would look like?

Allen Taylor

I mean, hindsight is 20-20, right? We could sit here, all these years later, and say that we knew the whole time exactly how this was going to work. But I joined Endeavor for the mission. I really believed in this mission, in this idea. Linda is obviously a very visionary founder. She lives in the future, she always has. She sets the north star for Endeavor. 

But to be super honest with you and with the people listening, I was a 25-year-old kid. I was like a gringo from California who lived in Argentina for a couple years. I've started a non-profit, I've been involved with a couple of social enterprises. But what really attracted me to Endeavor, what I found compelling way back then, was this idea that you could harness the power of the private sector. Basically you could use high-growth entrepreneurship, and now I really think about venture capital the same way, as a tool for economic development, for creating the jobs of the future, of tomorrow. 

I joined Endeavor for that mission. But, to be honest, I had no idea it would grow and scale to become such a big organization. I think I was employee number nine in the office, in the headquarters in NY. We had like 30 people total in about five countries. Today we're more than 500, and we're all over the place.

The other thing I'll say, though, is that I truly think today of Endeavor as a platform that we can build more things on. Because people talk about compounding a lot in financial times, but this is compounding in people terms. If you see one generation after the other, and if you see our ability to build Catalyst and now also a local earlier-stage fund vehicle in Brazil, and we may build one in Mexico as well, there's just so much you can do to build on top of it. And it's really cool to see.

Brian Requarth

In terms of compounding people and impact, there's been so many people that have been a part of the Endeavor network. Whether it's people on the Endeavor team, or people that left and actually joined funds or are entrepreneurs now. The impact does compound in many different ways.

Allen Taylor

For sure. At this point, there are hundred of stories of Endeavor team members who have gone on to start companies and venture funds. Paulo Veras was our managing director for years in Brazil. He left to start 99, and he became the first Endeavor team member to build an unicorn. There'll be more and it's cool to see.

Brian Requarth

What's been the greatest challenge as you look at scaling? We'll talk more about investing in a second. The beauty of your model is that you just have these super-filtered quality founders all across the globe. And you let the investors do their investing decisions, and these are all high-caliber investors. 

What has been the hardest part–besides you at one point travelling 300,000 miles a year on an airplane? Which, fortunately, you got a little one at home now and the pandemic kind of changed that for you, and you're now in California most of the time. But what's been the most challenging thing as you've looked at this global expansion? Because when you joined, you were mainly in Latin America. Now, as you mentioned, you're at 41 countries. What's been the biggest challenge as you've looked at this global initiative?

Allen Taylor

I think a lot of what Endeavor does is very bespoke, very customized, very high-touch, very specific to each company and their challenges, and to each founder and where he or she is in the journey. So, trying to build a scalable one-to-many productized program offerings for entrepreneurs at this stage is hard. Essentially, if you look at Endeavor today, 500 team members and 5,000 to 6,000 mentors, it's a lot of time, energy, and resources poured into a relatively small numbers of companies, if you actually think about it that way. 

There's only about 1,400 companies selected into Endeavor in all of Endeavor's 25 years, out of like 100,000 screens. So we're talking about the 1% to 2% of the funnel. So there have been real things we say, like "how do we scale Endevor and reach more places and more founders without losing the magic of Endeavor, that really special and personalized touch part of it?"

I'm sure you guys think about this in building Latitud too. It's a culture, it's a mindset… Really, so much of what makes Endeavor Endeavor is the people, the network itself. We thought a lot about how to replicate that. One important piece of how we built Endeavor, that may be relevant to the audience, is that Endeavor really is a locally owned and operated model. Whether that's in Argentina, in Mexico, in Brazil, or in Indonesia. It's local folks from the market on the team and on the board, really driving how we adapt and customize Endeavor's programs for the needs of that market.

In fact, a couple of years ago, this was pre-covid, I remember that I was on a flight back from São Paulo to the US. I sat by someone, and they asked me "what do you do?". I said "I work at Endeavor". And the woman looked at me with a funny face, and goes "Endeavor? But Endeavor is a Brazilian organization, right?"

That's actually exactly what we want. We want to be perceived as being really local everywhere we are, but being this kind of global standard and global network. Adapting Endeavor to different regions took more than a smile. I was hired as the gringo who spoke Spanish and some Portuguese. I was going to work in Latin America. Within a couple of years, I was in Amman, Jordan, Istanbul, Cairo, Jakarta… We had to figure out how to do Endeavor in a lot of these places.

But thinking about Latitud and thinking about the market in Latin America today, it's just awesome to see where we've come. In 20 to 25 years, so much has changed for Latin America. I'm sure we'll get into that a little bit more.

Brian Requarth

Yeah, I want to dive into that in a second. Before I do that, I want to ask more about the challenges of a more decentralized model. Because one of the things that naturally happens is that there are huge benefits to having this locally operated, but then having a unified front on everything is hard. Because you give ownership, which is great, because you can see the passion people have when they're talking about Endeavor and their local offices. There's a real and true ownership mentality. I've seen this in Brazil, obviously, but also in Colombia, in Mexico, and in other markets and places. So, how do you reconcile that versus having a more uniform thinking and keeping everyone rolling in the same direction, when you give the freedom to build? What's the challenge there, and how do you kind of optimize?

Allen Taylor

There are tons of trade-offs, right? Thinking about the many global organizations built over the last few decades, there were much more command, control, and headquarters everywhere, New York, DC, Geneva. "We're going to tell the world how this works". Those have all kinds of challenges, that are different from our challenges.

In our case, we did the opposite. We put Endeavor in the hands of the business communities, the entrepreneurs, the leaders in all these countries. But it has some pretty clear challenges around getting everybody rolling in the same direction around certain initiatives. 

Even things like brand. Today we've really evolved to have this kind of, we call it "one Endeavor", true brand that represents what Endeavor stands for everywhere. But there was a time period when we had sub brands. "Oh, this is Endeavor Uruguay", "this is Endeavor Chile", "this is Endeavor Mexico", right? And we wanted that localization on some level. But trying to make sure, we really went through trial and error as we figured out which parts of this we have to control and own from the top. Today, we really do think "one global brand, one global network, one global standard". 

Quarterly, every single entrepreneur who gets selected ultimately to Endeavor and becomes an Endeavor entrepreneur has to go through that international selection panel. The same gate to get in, whether you're based in Cape Town or in Recife. That's something we very tightly controlled, I think. And it's given us a really high quality of entrepreneurs in the network, which then allows us to put a lot more into the hands of the local offices. We talked about Endeavor entrepreneurs becoming venture capitalists and investors. But more and more Endeavor entrepreneurs are becoming the board members and even the board chairs of their local chapters around the world. And that's actually part of our vision for the future. We can imagine almost every local Endeavor chapter being run by Endeavor entrepreneurs.

Brian Requarth

Yes, I've seen that turn happen a lot. Like Sergio [Furio] down in Brazil getting more involved, and a handful of others. You said Paulo Veras, and how he was kind of one of the OGs down there. First of all, it's been impressive how you've been able to scale it, right? As you said, 41 countries. There's a huge amount of VC capital now flowing into emerging markets, like LatAm. There's been more of that over the years and across the world. You guys have seen this first-hand, because you've been operating in these frontier markets, as you like to call them. Now that international investors are evaluating risks, and that is somethings that is probably slowing the pace of investing, how do you think that's going to affect frontier markets? How do you anticipate that as a venture investor, how do you think about that?

Allen Taylor

There's two layers or levels to answer the question. One is a little more zoomed-in into "okay, here we are, in July 2022". And contrast what will the next 6 months look like versus the last 12 months. They'll look very different, right? Because, while I don't fully embrace this terminology of like risk on or risk off, there's a spectrum there of risk that global investors will take. 

Last year, particularly on the second half of 2021, you had a lot of investors seeking alpha, seeking yield, kind of going further out on that risk spectrum. You know, a lot of funds would never invest in or come into Latin America. Endeavor operates in some markets that are even less developed, we have a brand new Endeavor office in Pakistan. Which had a explosion of venture investing in the last 12 months. 

I think that, as global investors pull back on that risk spectrum, there will be on a whole less capital available in these emerging frontier markets than there was in the last 12 months. 

But if you kind of zoom out a little bit and take a longer view of it, there's a very real directional change here from 2006, when I started at Endeavor. The total amount of not just capital, but smart connected capital–that's a term from Kauffman Fellows, which is a cool organization that I joined the board of last year–, but this idea that smart connected capital is here to stay in some of these regions because we built the local ecosystem and a number of the global investors really do see it. Maybe it's zoomed out far enough. It's definitely an up into the right on the amount of capital that will available for founders to build, even though there will be some of those dips, up and downs, as we go.

Brian Requarth

100%. By the way, you mentioned Pakistan, I got to connect with Imran [Ali Khan] from Zameen, they're the first Pakistani unicorns in the real estate market.

Allen Taylor

Oh, you know them from VivaReal, yeah? Totally.

Brian Requarth

Yeah, I wasn't smart enough to put a check in. I don't know if they're involved in Endeavor, but they should be. Remind me afterward and I'll connect you with them.

Allen Taylor

Cool. Pakistan and Poland are the newest Endeavor chapters so we have a lot to do there.

Brian Requarth

I don't have a network in Poland, but funnily enough, I know the folks at Zameen over there.

Allen Taylor

Cool.

Brian Requarth

So, consistently investing in startups in all these countries all over the world, mainly in the emerging markets. Let's talk about some of the patterns and the trends that you see when it comes to those, let's call them, winners in the ecosystem. What do you see there?

Allen Taylor

So, there are patterns and we're not the only ones who have noticed this. If you look at global investors at later stages, General Atlantic, Riverwood, these guys, they also see patterns across markets. Even some of the bigger cross-over funds have mapped this and have thesis related to it.

But within Endeavor there is a couple of things maybe worth highlighting. One is that there's a very clear pattern around regional winners. These are business models that will exist in different places around the world and there will be a national winner maybe in a big enough market, like Brazil, and a regional winner in a place like Latin America.

The number one example of this from Endeavor's history is Mercado Libre, right? Mercado Libre was the eBay/Amazon for LatAm, and still is today. But a number of businesses that we're investors in–think of Clip in Mexico, Rappi across the region, Creditas with Sergio–, they're not expanding to the United State anytime soon. They're a regional winner for Latin America.

The trend though, and the pattern which is interesting, is that as we get into the 2nd and 3rd generation of entrepreneurship, you do see more companies with global ambitions coming out of these places. For our portfolio that's a company like Hotmart from Brazil. Or Pipefy, which was built in Brazil but sells in the US. NotCo, that came from Chile. 

If you look at Endeavor Catalyst's own portfolio, we're today investors in about 250 companies, all in or out of emerging and underserved markets, that ratio is changing. It used to be 85% regional and only like 15% of these global kind of businesses. If I look at last year, it's almost 25% or 30% that are global or have global ambition. 

Sometimes it's from day 1, like NotCo. But sometimes it's a regional winner that then kind of upscales their ambition to be global. Like dLocal, which is active in a bunch of cross-border payments in LatAm, but now is active in a whole bunch of markets in Africa and has very global ambitions. People might have seen the news this week about Kavak, a used car marketplace for LatAm, launching in Turkey and kind of really saying "hey, we can do this in these markets all over the world."

That's super exciting to me because looking across all these different emerging markets regions, I just think that there are very, very clear and interesting patterns and trends. I sit on the board now and I'm a small LP and kind of advisor to a seed-stage fund called Alter Global. We've talked about it a couple of times in the past, Brian. But Alter's entire thesis is that there are patterns and trends emerging from, frankly, markets like India, Indonesia, and Brazil, and that they're going to spread to all the other emerging markets. 

And I think that's actually very real for the next decade. This is no longer something created in Silicon Valley and copied elsewhere in the world. I think these innovative business models are actually coming out of places like Brazil, India, or other markets.

Brian Requarth

I love that. It makes me think that recently, one of our investors, Angela [Strange], and part of the team at Andreessen, they wrote a post that's called "The company of the future is default global". If you look at some of these business that are launching, they're launching in multiple countries, and one at a time. It's incredible to see that this is possible today. That's something you will see more in emerging markets. When I started, it was a crazy idea. Meli did it, they launched in multiple countries. But until Rappi, there weren't many examples of companies that had launched like this.

Allen Taylor

And that's like a decade in between, right? There's a long time there. It was very, very hard for anybody to do it. But I love that post by Angela and the Andreessen guys just a couple days ago because in our view they're 100% right in terms of what this looks like in the future. And I think some of this, 10 years from now, when we look back, we're gonna realize the shift started with the behavioral changes that happened during covid. This idea of people taking experiments because they had to about remote workforce and things like this. There are things people never would have done virtually, remotely, than when forced to do it, they said "oh, wait, this works! We can do it like this!" So, I don't know.

If you think about the main pillars, the three biggest things for company building in Endeavor's view are access to capital, access to talent, and access to markets. You can kind of break each one of them down but they're all going global-first, or global from the beginning. 

I've actually written a couple of blog posts about the capital one. This concept if decoupling capital from geography, where it doesn't really matter anymore and you can invest all over the world. I think it's super powerful and will probably end up being one of the biggest impacts of everything we've lived through over the last two, two and a half years.

Brian Requarth

Given that you look at so many different emerging markets, and you have this really, really broad view overview of what's happening all over the world, what are some of the biggest opportunities that you see that founders can potentially tackle? I know that you don't have some specific idea that some founder is going to listen to and just going to launch it–maybe you do–, but what are some of the things that you see, trends or big opportunities that are kind of ripe?

Allen Taylor

Yeah, I think that for folks out there, working in companies and thinking about businesses that they might start in the future, understanding where each market is along the spectrum of development of the venture and entrepreneurship ecosystem is important. And I'll explain what I mean.

We really think this stuff comes in waves. Whether you're in Southeast Asia, China, India, Africa, the Middle East, or Latin America, wave one is consumer, commerce, and digital infrastructure, like payment and logistics to make that happen. Mercado Libre, that's classic wave one, getting the consumer part built.

But then in almost every market wave two is technology coming to disrupt the biggest parts of the economy. If you think about that, that's absolutely fintech, right? Disrupting financial service. It's healthtech, like disrupting health care. And I should say disrupting and enabling, because both of those kinds of business will thrive in these earlier years. You can kind of map it out and look at financial services, health care, education, food and beverage, agriculture, transportation… The biggest parts of the economies will get digitized and technology will come to them. And this will create opportunities in all those places.

Endeavor is industry agnostic, but with Alter we literally have a map, like a spreadsheet, of "ok, look at all those industries, and we've seen it now in India, Indonesia, Brazil, and Mexico. It's gonna come to Egypt, right? Somebody is gonna build this business for Egypt for digital pharmacy", or whatever it is.

But the thing I think is really interesting for Latin America today is wave three, which is essentially when you really start to get to stick here B2B, enterprise business models, especially for small and medium-sized businesses. So, B to SMB, right? This is the digitization of the entire SME economy [Small Medium Enterprises economy], which is such a huge part of the economy in places like Brazil or Mexico.

So I think understanding where on the wave you are is important. If you try to build a wave three business today in Pakistan, it might be tough. But in you're doing it in Brazil, it's a great moment to do it.

Brian Requarth

Could you give us a couple of examples? If we're talking about B2B, there's a couple of companies that come to mind, like Chiper, Floki, Clubbi, Amilio… So are you thinking more about those types of businesses, that are digitizing these B2B opportunities and kind of just bringing them online?

Allen Taylor

Basically, bringing this whole part of the economy that still exists totally offline. Chiper is a great one as an example, out of Colombia. But also think about all the many small and medium businesses services that are very pencil and paper still today. These are businesses like Contabilizei, or Conta Azul, or Omie in Brazil. There's a bunch of them that are essentially digitizing some parts of the economy. I just that there are going to be more of those in the future.

Brian Requarth

Well, you're going to need somewhere to park those US$ 290M, right? So…

Allen Taylor

But we gave a little bit of it to you guys, right?

Brian Requarth

I know, thank you, we appreciate that and we hope to turn it back into something greater than you gave us. That's always the goal.

Allen Taylor

Absolutely, yes.

Brian Requarth

Just to wrap it up here, you just announced this fund. So it's US$ 290M in fresh capital. I think the vintage is going to be very good in the next couple of years, because there's just an incredible amount of entrepreneurs and there's still a massive amount of problems to be solved. Valuations got a little crazy last year and so things should be back to kind of normal, I guess, in some degrees. And for great entrepreneurs, there's still great opportunity to find partners and solve problems. 

So this is your largest fund to date. What is the total AUM [assets under management] now of the Endeavor Catalyst fund? Then talk about your plans, what you're looking to do with it.

Allen Taylor

This has definitely grown up over time. Our very first beta fund–that wasn't even a fund, it was like donated capital–invested 6,000,000 bucks in six companies. So that's how we got our start 10 years ago. The fund we just finished deploying, fund III, was about a US$130M fund. And frankly, we went to market last year to raise US$200M, max US$250M, we thought. That was sort of what we conceptualized. But thanks to this community we built around Endeavor–pretty much every LP in the fund is an Endeavor entrepreneur, mentor, board member, supporter–we exceeded our goal and raised US$292M, as you said. And now we're putting it into work. So, we're like super excited to be investing.

Brian Requarth

So, average check size… I guess if it's up to US$2M and then it's 10% of the round, does it come out to like a million bucks, is it a little more than that? What's the average?

Allen Taylor

The average is a little more than that. But you can see in the approach that we're gonna end up with a very big portfolio here. We're going to invest in between 100 and 200 companies in this fund.

Brian Requarth

It's a global index of tech, which is remarkable, right?

Allen Taylor

Yeah.

Brian Requarth

There's no question that tech is growing massively, and it's going to keep growing all over the world, and you get to index all of the highest quality entrepreneurs that are building, you know, the next generation of companies around the world. It's pretty interesting and compelling. There's not a lot of funds like yours.

Allen Taylor

Oh yeah, I mean, this is not a commercial for the fund. But if you look at the deck of what people found attractive around fund IV, I think there's almost nothing like this in terms of really having this type of access to the very best scale-up stage privately-held companies in this many different markets. 

At the end of the day, we really, truly believe the main feature here is access. Endeavor has access to great entrepreneurs and we're partners and allies. It's worth mentioning, Brian, the whole structure of the fund. It's a GP/LP fund but we charge a 15% carry, like a premium carry, that we donate 100% of the money back to Endeavor, to the non-profit. So there's real mission alignment, and core alignment with our own entrepreneurs around "hey, I want you guys in this really oversubscribed and competitive IV round, because I want to help Endeavor make money in the future". I think that's a key part of it.

I guess you did ask what we're going to do with it. Well, we're gonna keep investing in great Endeavor companies. Nothing changes in the core thesis. We will get even more geographic reach, we've talked about some of the new markets we'll invest into. In Latin America, that means that this fund has our first investment in Ecuador, for example, in a great company called Inspectorio, that is one of these global business that, you know, was born in Ecuador. We hope to make our first investment in a place like Puerto Rico, where we have a new Endeavor office. But we're going to continue to invest a lot in Argentina, Chile, Colombia, Mexico, and Brazil. These are five really big and important markets for Endeavor, in addition to Peru, Uruguay, and other places where we have offices. 

So I guess what's new or different is that, if you just look at the first early months, we started investing this fund after our first closing, in the end of February, early March. And we already made four investment in Mexico, it's sort of our number one market globally right out the gate. We invest in Xepelin, Nowports, albo and Clara. Just really cool to see that level of activity. And I know you believe in it, because you've up and moved your family to Mexico City for the year.

Brian Requarth

This is my first podcast episode from my new apartment. Full disclosure, I'm actually sweating because I have no AC in my apartment yet. But happy to be here, yeah, and happy that we got to kick off this first episode from Mexico City with you. We should have just done this at my house in Santa Rosa, back when I was there, but that's how the world is sometimes. We're just always in motion.

Allen Taylor

Yeah, so, I love that we're doing this with you sitting in Mexico City because Brazil is our number one market globally for Endeavor. Historically about 20% of all our investing is in Brazil, and about 20% is kind of the rest of LatAm. But I do think Mexico is kind of having its moment, and we're going to continue to invest a lot more there. It's interesting to see.

And maybe the one other thing I'll highlight that we're excited about is, with is fund, I'll think we'll do more investing than ever before in situations just like yours, Brian, where we're going to back up an Endeavor entrepreneur on his or her next company, right, on their second, or third, or fourth business. 

Back to that compounding idea, we now got close to 2,000 amazing individuals who have this kind of Endeavor entrepreneur stamp, or seal of approval. When they go start a new company, we'll back them from the very beginning, right, and that's what we got to do in Latitud. And if you look at the historicals, some of our biggest success stories, Rappi, Cornershop, Loft, we hope Latitud in the making, these are all Endeavor entrepreneurs on their next business. That's something I'm super excited about with this fund.

Brian Requarth

Really powerful network effects and, I mean, obviously our round was super oversubscribed, but I was like "Well, I'm definitely getting Endeavor involved". Because if you think about just the distribution of Endeavor, it's incredible. You're gonna be sending LP updates to heaps of folks, I want these people to know how Latitud is doing, you know?   

Allen Taylor

Yeah, we can make you famous on almost every continent, I think. I don't think there are any LPs in Antarctica, but we got everything else covered.

Brian Requarth

I'm obviously kind of fanboying here but, I was just back from Summer vacation and the cool thing about being part of Endeavor is that, like, you happen to be in Italy? Well, just drop your buddy Alessandro a note and he tells you where are the best places to go. And so the crazy thing about Endeavor, and I get inspired by Latitud regionally here, is that you can easily find a friend in all these countries. If you're an entrepreneur, you're from Colombia and you drop into anywhere in Asia or in Europe, you instantly have a connection with that person because entrepreneurs relate to each other very deeply. And so, having that network is pretty amazing. I've made some great friends all over the world through Endeavor.

Allen Taylor

I mean, me too, right? It's essentially the whole idea of a globally distributed network of trust, where you show up and maybe you never met anybody in Bulgaria before, but you get kind of instant, super high-quality humans as the people you're interacting with there. As you mentioned, I used to travel a lot. My wife teases me because I basically get back from every trip, no matter where it was, incredibly optimistic, excited about the future. And you know, Endeavor works in some tough places, right? So, I come back from, like, Lebanon, and I'm like "you wouldn't believe how well things are going in Lebanon!" And she's like, "have you read the news? Things are not going well." But I've just met the five most talented founders in the country, right? So it gives you a little bit of reality distortion field on being optimistic about the future, but it's a pretty good world to live in.

Brian Requarth

Well, as my dad says, there's no future being a pessimist.

Allen Taylor

Amen to that. I believe in that for sure.

Brian Requarth

All right, man. Thanks so much for taking the time and looking forward to hanging in person at some point in the near future. And congrats on all the work, on the new fund. It's going to be awesome to see how everything evolves. Keep on expanding, I'd love to see it.

Allen Taylor

Thanks for that. I mean, I think it's super fun to do this together. Really happy to have you as a part of the Endeavor community. And frankly, from all these different things we're doing–Endeavor, Alter, Kauffman Fellows, Latitud–, I think there's just so much we can do together in the coming years. Looking forward to it.

Brian Requarth

A rising tide lifts all boats. Awesome, thanks a lot.