From entrepreneur to investor: the winning combo for the entrepreneurial ecosystem

“Raquel, I need someone who has been an entrepreneur and knows what it is like to be on the other side”. This was how Enrique Penichet, founder of the venture capital firm Draper B1, convinced Raquel Bernal to join his team and help, through investment, other high-growth companies to scale.

This was back in 2017 after Bernal had previously co-founded several companies: arttroop.com, an online shop for buying and selling artwork, and homelyst.com, a home and décor marketplace. The experience gave him first-hand insight into the opportunities, challenges and concerns that entrepreneurs face on a day-to-day basis, and he jumped into the venture capital space to support other startup founders.

From startup founder to investor: a natural progression

His case isn’t a one-off in the entrepreneurial ecosystem. In July 2023, Victor Lazarte, cofounder and CEO of Brazilian video game startup Wildlife, left his position at the company to join venture capital firm Benchmark as an investor.

Spain also has its fair share of entrepreneurs turned investors, like Miguel Vicente, founder of the startup LetsBonus, a website that specializes in selling coupons for products and services. In 2013 he cofounded Antai Ventures, an investment fund that has backed companies including Glovo, Wallapop and SingularCover. Another noteworthy case is Iñaki Berenguer, one of the big names at the fifth edition of Open Summit as the co-founder of CoverWallet, who launched the Life Extension Ventures investment fund in 2023 to support startups that work in human longevity. Internationally, famous entrepreneur/investors include Sam Altman, founder of OpenAI, and investor in Retro Biosciences.

“When you get a market maturity to have great exits, there’s no better option than to reinvest part of that return in the ecosystem”. says Draper B1’s Bernal. “By nature, entrepreneurs are generous with other entrepreneurs. The effect, according to a study called ‘Transferable Skills? Founders As Venture Capitalists’, can be positive: investors with an entrepreneurial background are more likely to have successful investments.

Experience counts for something

There are several reasons why startup founders decide to support others from the investor side of things. The founding partner of ElTenedor, a restaurant booking platform (now renamed TheFork), and current Chief Growth Officer of the Digital Pharmacy Network LUDA Partners, Marcos Alves, is an investor in startups including Padmi and Agrosingularity. For Alves, the investors with entrepreneurial DNA who support other startup founders who are developing their initiatives “is a way of expressing our gratitude to the ecosystem that has supported our achievements in past professional endeavours”.

It is precisely to help other projects achieve their goals and grow that the figure of investors with entrepreneurial experience offers a different perspective. “Apart from being an investor, I consider myself a fellow traveller: I not only try to support entrepreneurs, but also to understand them”, says Helena Torras, venture partner at the investment firm Hans(wo)men Group and co-founder of the digital health startup for women, Bwom. But what qualities characterise these investors who decide to support other founders?

• Empathy. The ability to understand the challenges facing people who have launched a high-growth company is the key characteristic. According to Torras, this empathy nurtures a feeling of trust that is crucial for entrepreneur growth: “We often become the first person they turn to when they have a problem”. This characteristic is also highlighted by Bernal, who adds that “having been in the same shoes fosters a good ‘vibe’ with the entrepreneurial team from the first moment, a trust between both parties that makes the ‘match’ happen”.

• Analysis. Having an entrepreneurial background gives investors a sound understanding of the growth potential of the startups they invest in. “I use my past experience to pinpoint the key issues that define a project and when I identify similarities with previous positive and successful experiences, I feel more comfortable in helping the startups I invest in with these aspects”, says Marcos Alves. Helena Torras, from Hans(wo)men Group, adds “the ability to detect risks much earlier and develop action plans to avoid mistakes”.

Even so, the experts say that it is the entrepreneurs who have the last word when it comes to deciding which path to take. “Being there to support, listen and help is crucial, but it is equally important to respect the entrepreneurs so that they can be autonomous and make their own decisions. They are the only conductor of the orchestra”, says Alves, co-founder of ElTenedor (TheFork).

Driving forces behind the early-stage entrepreneurial ecosystem

In a context where investments in startups have fallen in response to current macroeconomic circumstances, investors with entrepreneurial experience are establishing themselves as a way of driving the entrepreneurial ecosystem forward. “The early stages haven’t frozen up as much as the advanced stages and investors who have been entrepreneurs can identify those metrics that determine support for a project”, says Torras.

Against this backdrop, Alves, co-founder of ElTenedor and CGO of LUDA Partners, is optimistic and sees the ecosystem as “a dynamic environment with a growing diversity of projects and startups in different industries and verticals”, although he underscores that these companies tend to pursue their path to profitability in a more agile way.

When it comes to starting and developing a high-growth company, the investment field can provide startup founders with not only the financial support they need, but also the understanding and experience that will guide them on their journey. Investors with an entrepreneurial background can be the perfect boost for companies that are striving to shape the future.