Don't fly solo

Canary provides the first venture capital round, seed or Series A, to tech companies that operate in Brazil. We are an entrepreneur-friendly, well-connected and hands-off partner that will be by your side, helping in impactful manners (but only when you ask), as your startup takes off.

Nice to meet you.

In case you want to learn more about us, we wrote down some FAQs for you. Just scroll below. If you want to learn even more, you can download our standard term sheet: right here

Let’s get to know each other. We’ll go first:

What is Canary?

We are a venture capital firm founded and managed by entrepreneurs and operators, seeking to turbo-charge the Brazilian startup ecosystem. We partner with founders early in their journey, as the first source of institutional capital (seed or series A).

You can learn more about Canary team here!

Published on June 27th, 2019.

What size rounds do you participate in?

We partner with founders at the first venture capital round (seed or Series A). We’ve invested in rounds as small as USD 250K and as large as USD 15M+. We prefer and typically lead the first round we participate, taking the majority of the round.

Published on June 27th, 2019.

Do you only invest in startups operating or planning to operate in Brazil?

Yes.

Published on June 27th, 2019.

Does Canary only invest in tech companies?

We are sector and model agnostic, but we invest in companies that can scale exponentially and take a huge market fast. Technology (not necessarily pure tech!) is what allows such an exponential growth.

Published on June 27th, 2019.

All I have is a pitch deck. Will you talk to me?

Of course!

We have already invested in quite a few powerpoint-stage businesses.

However, a few validations before investing are always helpful. Are the founders full-time on the business? Have the business hypothesis been tested? Has the startup made its first hirings?

Also, we love data so we will probably ask you to send us some info on your business - it will be easier for us to validate your convictions on the market or the business model with them.

Published on June 27th, 2019.

I don’t speak English fluently. Is that a problem?

Not a huge one, but it might make raising your future rounds harder.

Fundraising is a core competency of a good VC backed founder. If we are investing in you, it is because we believe you will be able to scale your startup and continue on the VC growth track. That means you’ll have to interact and raise subsequent rounds from non-Portuguese-speakers investors too. Being able to communicate fluently in English makes a difference here.

On a side note, besides all that, we switch between English and Portuguese all the time (it’s a part of the venture capitalist persona!). Então, sometimes, you’re going to hear us falando a little bit like this.

Published on June 27th, 2019.

Will you schedule a face-to-face meeting with me?

Not right away.

First, we’ll ask you to fill up this form so we can have some basic info on your business. If we see that your startup meets most of the criteria we’re looking for (you can learn more about "what we’re looking for" in the next FAQ), we’ll schedule a few calls with you to find out more about you and your business. Eventually, we’ll have a face-to-face meeting as we evolve along the process.

This process has helped us reduce our response time to founders.

Published on August 20th, 2019.

What do you look for before making an investment?

There are three concrete aspects we like to see in a startup:

Great founding teams: venture capital is a people business. Our main job as investors (at least the way we see it at Canary) is not to be the smartest ones in the room, but to know a talented entrepreneur when we see one. What makes a great founding team? Just check the next FAQ.

BIG markets. We look for startups that can grow at least 50-100x within the 8-10 years fund lifetime. If your market opportunity (or future vision) is not big enough to accommodate that, it might be an issue for us.

Healthy cap table. Founders should keep ownership of their companies and avoid excessive dilution at an early stage. Ideally, the founding team should have at least a 50% stake after the series A. Too much dilution might be an issue for us.

If you wish to learn more about what makes a healthy cap table, check this Q&A with our partner Florian Hagenbuch (in Portuguese).

Published on June 27th, 2019.

What makes you wanna back a founding team?

These are the most important things we learned over our years as investors and entrepreneurs when it comes to founding teams:

1. Founder-market-fit: if you are going to spend the next years fighting for your business to succeed, you need to line up extremely well with the upcoming market challenges. A great founder will choose wisely what ideas to pursue, taking into consideration his/her knowledge and passion about the business model, clients and sector. This matters a lot, more than the business idea itself, and should be as important to the founders as it is to investors. A founder with a good market fit will feel more empathetic towards customers, more thoughtful about the market dynamics and will probably be more resilient throughout the ups and downs of the entrepreneurial journey.

2. Obsession: we need to see grit. We need to see hustle. The best founders we know won’t let it go and strongly believe they are the best people to solve the problems they are tackling. They understand early in their journey this path comes with a lot of sacrifices and they are prepared to trade the short term for the long term. We are looking for obsessed founders who are willing to go as far as it takes, rather than great ideas that are in fashion.

3. Selling the dream: as a startup founder, you are selling your dream to a lot of people, all the time. This is true for recruiting, investors, when giving interviews to the press, selling your solution to customers and motivating your team. You’ll have to inspire, instigate and convince the ecosystem around you that your solution/product is all they ever wanted. We are not talking about creating stories or lying to conquer people’s hearts. We are talking about: a) putting yourself in other people’s shoes and understanding what they really need to listen, considering the business’ best interests; b) the ability to have a passionate, well constructed and compelling narrative; c) being a leader that people truly trust and respect so all this talking can actually mean a lot to them.

Published on June 27th, 2019.

Before I pitch my idea, will you sign my NDA?

No. We learned from the best founders that execution is what makes a business successful, not the idea behind it and an NDA aims to preserve an idea.

Also, imagine how much time it will take simply between the back and forth between lawyers until all NDA clauses are good to both sides. Now, multiply that by the dozens of startups we talk to every month... It would take way too much time and money. We would rather spend those talking to founders, organizing events, strengthening our network and helping our companies take off.

BTW: if you think you need an NDA before pitching your idea, we encourage you to read this article and think a little more about it.

Published on June 27th, 2019.

Why do you make investments using convertible notes and not equity?

Just to make things easier, cheaper and faster for both sides.

It is worth knowing that we only invest in offshore structures (LLC, Cayman, etc.) and not in Brazilian S.A and LTDAs. No worries, we can help you set these up in no time and at a reasonable cost ;-)

Published on June 27th, 2019.

What is Canary’s approach after the investment?

We pretty much get out of your way.

We take pride in being an operator fund, founded by entrepreneurs and managed for entrepreneurs, so we know how investors can add unnecessary stress to the already demanding life of a startup. Founders should be laser-focused on their business, not their investors.

Besides that,we believe founders always know best. They understand their market, their companies’ objectives and what their customers want much more than we ever could. So we trust them. We’re not gonna demand board seats, veto powers or long explanatory meetings about decisions being made by your team. We want you to do your thing and ask for help whenever you need, knowing all along that we are always ready to help, in a low-touch but highly impactful manner.

Published on June 27th, 2019.

How does Canary help founders?

Network: Our network is our most important asset. We have access not only to the best tech founders in Brazil, but also to several key people across industries and sectors that can make a difference in your journey. The list goes from getting great advice on specific issues to finding the right person to sell your product/service. Connections include possible customers and future investors (more on these items below), suppliers, business partners, game-change talent, market experts, etc. We are all about using our network to help our founders succeed, especially when it is a win-win type of connection. If you didn’t click yet on our network link up there, here’s another chance to check out who we are talking about.

Corporate Connections: We are quite close to some of the leading companies in Brazil, in sectors such as retail, banking, education, beverages, media, real estate, healthcare and others. Many of the owners and key decision makers of these companies are also our investors so they are also quite incentivized to help out ;-). You will still have to do the selling of your product/service by yourself but we can really help to put you in front of the right people, so you can scale your business even faster.

Funding: We can help you raise your next round in many ways. We have valuable data on the market and subsequent rounds, as well as how other VCs work and what they look for in a company, and we can share this knowledge with you. We can also introduce you to other VC firms, although we highly recommend that you get in front of the investors you think might be a good fit for through another startup founder that these funds have already invested with. In our experience, an entrepreneur recommending another entrepreneur is something very powerful and typically what works best. At the same time, you can be sure we’ll be working backstage with you to devise a winning funding strategy to get you on a long-term venture capital track.

Hiring: we team up with the best universities in Brazil and in the U.S. to help startups find fresh and eager-to-learn talents right out of college. Besides that, a lot of experienced professionals reach out to us in search of positions. We treasure those contacts and dedicate a good amount of time connecting them to the startups we’ve invested in.

Knowledge: we organize plenty of events for founders and their teams during the year. These are not the “inspirational-motivational-not-really-helpful” kind of events. Instead, we are all about generating excellent and useful content for entrepreneurs and we are lucky to have a great network that can help us with that. For example, if we are going to organize a meetup about how to best manage an engineering team, we are going to have an expert as brilliant as the Instagram co-founder as a speaker (true story, by the way).

Published on June 27th, 2019.

Do you invest in competing companies?

Yes.

Our model is to invest in great people and not only in great business models. When entrepreneurs come to us, they might not be sure of how their business will evolve over time (we are an early stage fund after all). So there’s a chance they will become competitors of entrepreneurs we have already invested in. We don’t have (nor wish to have) control over that. We will, however, tell you if we are investing in a competitor. You can be sure that we never, ever share data or any sensible information between companies. Chinese wall mode is always on as we fiercely guard our reputation and never put it at risk.

Published on June 27th, 2019.

Will Canary do follow-on investments?

Yes, this is actually a core part of our investment strategy.

So much that in our term sheet, we always require the right to keep our equity stake in a follow-on round (also known as "pro rata"). In a subsequent up equity round, led by a top tier fund, we fully intend to exercise that right and will often times seek to increase our stake (aka “super pro rata”).

To be clear, it is not a part of our strategy to participate in bridge or inside rounds so you should generally not count on us in those situations.

If you wish to learn more, just download our standard term sheet: here.

Published on June 27th, 2019.

How long until I get an answer for you?

We discuss new investments on a weekly basis. Our goal is to make investment decisions in a few weeks at most. If we know we won’t invest in a startup, we will tell its founders earlier than that.

Published on June 27th, 2019.

What is the best way to contact Canary?

We prefer warm intros, so if you know anyone who can make that referral, go for it.

In case you don’t, no worries. We read and answer every single email we receive: info@canary.com.br.

Published on June 27th, 2019.

I don’t know anyone from your network. Should I contact you anyway?

Absolutely! We like meeting new people and we’ll get back to everyone that contacts us as soon as possible. Try it out :-)

Published on June 27th, 2019.

Do you have a different question?

Just email it to us: info@canary.com.br :-)