Right timing and dream team investors
Fund your way. Episode 3. Bernardo Brites from Trace Finance.
The third episode of “Fund Your Way” navigates us through the story of Bernardo Brites (CEO and Co-Founder of Trace Finance) and his experience during raising the first round for the company ($4.3m USD, seed round). Trace Finance is building a seamless global banking solution for Startups, beginning in LatAm.
Bio
Trace Finance is the first venture-backed company that Bernardo founded. Before that, he was successfully (💰$2m as profits over 10 months) running a crypto trade desk in Brazil 🇧🇷, his home country, sourcing the majority of Bitcoins for local exchanges. Bernardo is a fan of sci-fi movies and Silicon Valley TV show, enjoys digging deep into a topic by reading tonnes of related articles since the age of 12.
He always wanted to work in a large tech company, until he realized that it is not for him, unless “he is the one who builds it” because he prefers to be able to see the impact and actually scale the business.
The most precious asset in the world for Bernardo is time and he wishes he could freeze it to be able to accomplish more. Considering that, he is greatly fascinated by Elon Musk, who is resourceful enough, among other qualities, to successfully run several companies simultaneously in different industries.
Trace Finance
Trace Finance emerged as the treatment for the LatAm banking market, which was absolutely not focused on startups. Bernardo experienced all the obstacles that his previous crypto company had to overcome to be able to operate lawfully, including filing and winning a legal case against banks to be able to open and operate an account.
This experience showed a gap in the market and the real need from customers. The team at Trace Finance started bootstrapping the product and onboarding the first clients. Bernardo realized that the issue was much larger and did not end with bank accounts. Therefore, he transformed the product and now sees Trace Finance as the guide and assistant in the whole financial journey for LatAm startups and wants to provide clients with the complete package of tools that no other player is capable of at the moment.
Investment round
The unique feature of the Seed round for Trace Finance should probably be the fact that the company was already profitable and was not desperate for cash. Consequently, Bernardo and the team had the privilege to choose the right timing and right investors to join them in the journey. They tested the model and it worked perfectly well, however they needed insights, advice, guidance and money to 🚀scale it rapidly. Future growth strategy became the main topic that investors asked the team about during the pitch and simultaneously the main contribution team wanted from potential partners.
The challenge for Bernardo was not to find an investor but to choose from those, who were willing to participate as the round was quickly 4x times oversubscribed. It took roughly a month for Bernardo to receive the term sheet from HOF Capital that he and his co-founders were happy with.
It was a perfect choice, because as Bernardo says: “they have a great portfolio, experience in finance and crypto all the way from seed to the IPO, great people and partners. You would like to admire people you are working with.”
Bernardo managed to assemble a dream team of investors.
“All of them are in our cap table for a specific reason. Some of them are strategic, some save us time and resources, some are well-connected, some used to be operators who know how to scale similar operations.”
It was a challenge (which some of the founders would love to have) to accommodate all the investors and give them their desired allocations, which was by all means not possible.
Advice
Trace Finance was attracting investors like a 🍰 hotcake, including those that were problematic.
“Some of smaller VCs drained us by asking to have more and more calls, which in result did not lead to anything.”
This brings us again to the value of time which Bernardo wishes he could freeze and the importance of allocating it wisely.
On the contrary, the experience with The Chainsmokers via their Mantis VC was “an instant click after we first talked and saw all the value they could give us.” Bernardo adds that
"VCs won’t turn a bad company into a good company. So, if founders have amazing companies, they should look for people who can help them scale what they already have."
Looking back to his experience with raising, Bernardo reflects that “what really helps is to look for founders who scaled businesses in parallel verticals, who can become your guides. And even if they do not turn out to be your ambassadors, they can introduce you to investors and offer advice.”
🗣 It was a real pleasure speaking with Bernardo and then sharing his story in this article. I believe we all can find something to learn from him, his approach to life and business. I wish Bernardo and the whole team at Trace Finance the best of luck in their product development. There is a long road ahead of them, but they have a well-functioned car with enough fuel to drive to the desired location.
✍️ Author : Ilya Minkov | LinkedIn
