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Seed call in the men's room
The Brazil office decision
David Velez was an associate at Sequoia, hired out of Stanford Business School, and he moved to Brazil expecting the firm to open an office there. After two investments, Sequoia decided against it, because few engineers came out of Brazil and the startups were all the Uber of Brazil or the DoorDash of Brazil, with no real novelty. The firm offered him a job in California.
A card idea from an outsider
Velez had an idea for a credit card business in Brazil. He wasn't from Brazil and knew nothing about financial services, but Doug Leone saw a heart of gold and the heart of a lion in him, and no one could stop him. Sequoia seeded him with a million dollars.
The call from the men's room
That night Leone was at dinner at Roast House when Velez called, all alone, asking what to do now. Leone took the call from the men's room. Velez already knew what to do. He wanted support, so they made a plan for the first two or three things.
Velez never missed a beat for the first several years. The company, Nubank, is now worth sixty billion dollars.
How did Nubank take on Brazil's big banks?
Nubank launched in 2013 in São Paulo, founded by David Vélez, Cristina Junqueira, and Edward Wible. Brazilian consumer banking was dominated by a few large banks that charged high fees and interest, and Nubank offered a no-annual-fee purple credit card managed entirely from a phone app. It listed on the New York Stock Exchange in December 2021.
Why do investors back founders who are outsiders?
A founder who is new to an industry hasn't absorbed its habits, so the assumptions everyone else treats as fixed are open questions to them. Airbnb is a familiar case: two of its three co-founders were designers trained at the Rhode Island School of Design, not hoteliers. Outsiders usually have to hire the missing expertise early, which forces them to build a team around their gaps.
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