Why Are More Founders Leaving Startups to Become Venture Capital Investors?

Victor Lazarte, ex-CEO of Wildlife, is the most recent case of an entrepreneur leaving a startup to enter venture capital as partner at Benchmark in San Francisco

By

Bloomberg Línea — Founders of Brazilian startups are moving to the investor side with venture capital firms, “as the market matures”, as Gustavo Vaz, former CEO and co-founder of EmCasa and now part of the investment team at Spectra Investments, explains.

Cases such as Wildlife’s co-founder and former CEO Victor Lazarte, along with that of Gustavo Vaz, who left their companies and are now part of investment teams, may point to a new trend, according to Vaz.

Sarah Tavel, general partner at Benchmark Capital, a renowned Silicon Valley venture capital fund that has financed unicorns such as Uber and Wildlife, said Lazarte joined the company also as a general partner and co-founder.

“We use that term because the company remains defined by the simple, clear model of six equal general partners, each operating with the autonomy and ownership of a founder in the broadest sense: from compensation to decision-making authority,” she said.

Since 2019, Wildlife, founded by Victor and his brother Arthur Lazarte, has on its board Peter Fenton, a general partner of Benchmark. The Brazilian gaming company announced Victor’s departure as CEO a month ago, when it cut 13% of its staff.

According to Tavel, Lazarte was chosen as co-founder for his “radical understanding of the founder’s journey”.

“Having been rejected by every investor in Brazil, Victor took just $100 and turned it into a transformative gaming company that generates hundreds of millions in annual revenue,” Tavel wrote.

Lazarte was already active as an angel investor. He was also already on the board of Brex, owned by his colleagues Henrique Dubugras and Pedro Franceschi, since 2018, according to PitchBook data.

“We have the utmost conviction that Victor will not only excel in the multidisciplinary craft of early-stage venture investing, but will also drive us forward in our thesis,” Tavel said.

One of the most famous cases is that of Brazilian Eduardo Saverin, co-founder of Facebook, who currently runs B Capital Group. In early June, the venture capital firm was in the process of raising $500 million to invest in early-stage startups, according to Bloomberg News.

Brex also had its then-chief revenue officer Sam Blond switch sides: he joined Peter Thiel’s venture capital firm Founders Fund as a partner in September 2022. In recent days, Ryan Petersen, founder and former CEO of logistics startup Flexport also left the company to become an investor in Founders Fund.

Gustavo Vaz, ex-CEO of proptech EmCasa, left his position in May to become an investor at Spectra. The VC company operates with private equity and alternative assets, direct investments in companies and secondary transactions.

EmCasa co-founder Lucas Cardozo, who served as COO, now runs the startup as CEO, while Vaz follows strategically as a board member.