Daniel Salvucci, Managing Partner at Draper Cygnus provides his analysis of the venture capital industry context and deep tech startups in the region (part II)

Daniel Salvucci, Managing Partner at Draper Cygnus provides his analysis of the venture capital industry context and deep tech startups in the region. He highlights the low investment in deep tech companies and the great potential for talent. Investment funds like Draper Cygnus are interested in disruptive ventures that go way beyond what is socially accepted as “the latest”. They are companies that are in industries impacted by disruptive technologies that drive drastic changes and impose the creation of new business models. Developing those changes that are driven by the demand of society are not always possible in certain industries and at the same time require a lot of capital.

The potential of GBM

Salvucci argues that in general companies like GBM (and Tesla), find their main value – if they can do it – by aligning better than anyone else the interests of multiple complex actors around a single problem and at scale.

“And that, in the end, is the value. Because the truth is that solving this problem requires all the actors.  Both the ordinary person who donates 1 dollar or 10 dollars to support a cause of forests restoration or a huge company that offsets its use of carbon. The companies for its politics, or business decides to spend a lot of capital to restore the native Amazon rainforest, for example. Again, both are relevant at the end of the film, you need both. 

What seemed interesting to us at GBM is that it achieved an interesting hypothesis, to be validated now with what happens in the next few years. 

GBM project can potentially do this: align all the interests of a complex problem. Because until now there were unbundles initiatives.

NGOs, people, companies, individuals, disjointed initiatives (…) if it is better business to do something else in those square meters of the forest than to recover it because more than there is goodwill, will end up winning the business and then we will not finish solving the problem. 

Companies like GBM are finally finding a way to hack into that dynamic a bit and make it more meaningful for everyone to do that business of restoring than doing anything else. And that is where friction is removed, and it is just as easy for a person to participate in the same initiative as it is for a huge company.  Here is where the perfect combination achieves the final objective, which is: to restore the balance of biodiversity on the planet. 

And the most important point is that you can do it on a massive scale that makes sense and moves the needle on the bigger problem. And that is the innovation or relevant point of companies like GBM”. (Salvucci in Analysis of the LATAM market of Venture Capitals and Deep tech companies, 2022).

Scalability in GBM

GBM today is small because today it has just a reserve, but how many million hectares it can potentially have throughout the world? Well, if there is such a possibility, so it is enormous, says Salvucci.

Salvucci highlights the outstanding GBM team to thrive on this project. He highlights assets of talent and vision especially focused on the problem of biodiversity restoration.

Lastly, he expresses that in the short but intense relationship he has with GBM, the road map is clear and that they are in the process of executing it.

The crypto world

Salvucci once again emphasizes that the companies in which Draper Cygnus invests, that fit into this paradigm, propose such a big change that never (and it is not just an Argentine issue), governments and regulations are going to get on well, or they’re going to be a zero-friction thing. 

It is not that these companies do not care because they work all the time to help evolve that regulatory framework. But as they go much faster, they cannot be stopped. So, in the end, government regulations end up having to accommodate innovation and the new paradigm.

“My vision and the fund too is that there is no need to talk so much about cryptocurrencies. The relevant role of all these new technologies is that they are a new tool -super powerful- for economic, social, and government open organization. Decentralized that does not depend on corruptible institutions. That is the important power of all these technologies that first touched money with bitcoin and then contracts or contractual relationships with Ethereum. Now a huge pandora’s box was opened there that little by little is touching all industries. 

GBM is a case, combining all that potential with a particular industry that is biodiversity restoration” (Salvucci in Analysis of the LATAM market of Venture Capitals and Deep tech companies, 2022).

Salvucci argues that basically and, in Draper Cygnus’ thesis, decentralization has to do with sustainability, that is, for humanity to be sustainable, all industries must be decentralized. He claims that the important role played by crypto, not currencies but the entire technology, is the new technological infrastructure to decentralize all other industries, not just finance.

In short, the Fund’s investment thesis is to make it possible for many people to cross the bridge to a more sustainable, more genuine, and decentralized world.

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