Episode 025 - João Zecchin, Founder Fuse Capital

Distilling Venture Capital

Introduction

• Welcome to Distilling Venture Capital. I am your host, Bill Griesinger,
• Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world. This is your podcast for Fintech, Decentralized Finance, Blockchain and Smart Contracts, Digital Banking and all the frontier technologies that are changing the financial landscape globally.

Episode Introduction:

• Welcome back everyone. I am really excited about today´s conversation because we`re going to chat with a very innovative investment firm, known as Fuse Capital, based in Rio de Janeiro, that is changing the Inv. Fund Model for investing in early-stage and growth stage technology companies with an interesting approach, and has also created a new fund that provides dedicated exposure to DeFi (Decentralized Finance) for institutional investors. We´re going to get into all of that and more…
• To help me do that, I have the pleasure of welcoming to the program, João Zecchin, Founder at Fuse Capital. João, thank you very much for making the time to be on the podcast today…

• So, before we dig into the meat of all the innovative structures Fuse Capital is offering to its investors and the market, I usually find it useful for our listeners to understand a bit about your background and your journey, more broadly, that ultimately set the stage for founding of Fuse Capital. Tell us a bit about your journey that led you into technology, investing in tech companies…

Topic Areas Covered

• Talk about the origins of Fuse Capital and then the how you arrived at the strategy that led to Fuse Capital I Fund – 1st hybrid fund, offering not only equity to early stage companies but a venture debt product, as well. This a unique approach to someone like me who spent 20 years+ in the venture debt space.
• Can you give some examples of venture debt deals you´ve done? I understand most or all of the debt deals you´ve done are not portfolio companies where you have an existing equity investment, correct?
• Mix in the Fund - When one looks at Fuse Capital I Fund, what is the % of Fund assets are made up of Venture Debt vs Equity?
• What´s the typical structure of a venture debt deal? Term Loan, advance based on multiple of MRR?
• Return profile for venture debt deals? Provides current income to investors thru monthly P&I pmts.?
• Risk management and portfolio management processes for the debt deals?
• Target sectors, target geographies for venture debt deals? For debt deals, talk about that deal process and how you credit underwrite and diligence deals

• Let´s talk about the newly created fund, The Wasabi Fund, which provides exposure to DeFi for Inst. Investors;
• When was the Fund launched? Thinking/Strategy that led to the offering?
• Tell us how you define DeFi and what does exposure to DeFi mean or entail?
• Mechanics, details of how the fund is structured and works…
• You don´t actually provide exposure directly to stable coins themselves, right?
• Main Strategies Offered; Liquidity staking, Lending, Futures, Leverage;
• Anticipated yields – Examples (20% - 40%)
• Risk mitigation features and strategies?
• I had a question about one of your Regulatory Risk mitigation strategies:
• Underweight allocation to centralized stable coins; Is this referring to USDT, USDC?
• Given the some of the negative blowups recently (e.g., Terra-Luna; UST debacle), how do you assess and diligence what projects to include in terms of DeFi projects and protocols? Because this blow-up has broken trust in the sector – even though there are many solid projects that are decentralized…
• The DeFi Fund is structured such that it does not necessarily include direct exposure to the underlying stable coins of projects, is that correct?

Closing Remarks

• What is a good way for those seeking additional information about Fuse Capital to get in touch?
• Website – www.fuse.capital
• Social media?
• Other contact methods?

Thank you for joining me for this edition of DVC. I hope you found our discussion today with João Zecchin and Fuse Capital interesting and it gave you new insights about how the venture capital and venture debt landscape is evolving in Brazil. I look forward to joining you on my next edition of DVC. Thank You…