Some Learnings Searching in Mexico for over a year now

Searching in Mexico has been both rewarding and challenging. Glad to share some learnings. If you are an investor interested in equity gaps in Mexico, or if you are planning to search in Mexico, I'm glad to help in any way.

Keeping a cool head: It's easy to discard the "Definite Nos" (those opportunities where it's clear they are not good). The challenge lies in discarding those where I'm not sure. As an entrepreneur, it's natural to see opportunities everywhere. This is a bias (trying to see how things could work well). Having seen so many companies has given me more confidence in discerning the good ones. So here's the good news: you can develop this skill with time, by having more data points (seeing more companies creates a better picture of what makes a good company in comparison).
Being agile, but not in a hurry: Agility is a virtue, but also recognizing the importance of conducting sufficient analysis without succumbing to time pressure. Hurrying can work against us if it lacks a good strategy and prudence. Also, sellers can smell a sense of hurry so it is always a good idea to communicate we do want to move fast but are here for the long term.

Owners want to put a face to the name, and a name to the face: Businessmen in Mexico don’t trust people they just met. Some have told me they would only share information after meeting face-to-face. Some things that I usually do are: talk about my well-known investors, tell them that I have former bosses in my cap table, offer to meet them in person, and offer to send a presentation or document about us, among other things.

The human side is very important: Contrary to common practice (or what works in other geographies), in Mexico it is not optimal to ask for detailed numbers in the first conversation (there are exceptions). It works best when I focus on creating a relationship from the first moment. I try to get the owner to trust by sharing stories, and things in common, even talking about why I am doing this and how we (investors and me) can add value, before talking about money. I know this is different from other countries because of our “high context” culture. Call it an inefficiency, but I see it as an opportunity!

Not leave the ball on their court: At first, we had longer checklists. Now we sometimes skip requesting an NDA or send it pre-filled and pre-signed by me. Owners often put off sending information, and there can be many reasons for that. They could feel judged about their tax strategies or fear we could use that information somehow to compete against them. So, we focus on the most important questions, and those that don’t compromise them (for example we tell them we don't need to know who their customers are at first). And when a lot of time passes without an answer, we sometimes even ask simple things we might not even need, just as an excuse to keep the conversation going.

All in all, I think Mexico is a great place to search and remain confident it is a great moment to buy a great company. Please reach out if you need any help.