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For most first-time founders, the idea of a pitch deck sounds easy, but I often get decks with "v43" in the filename, implying it's the 43rd iteration of a deck đ
Don't be this founder. Collaborate with active VCs on your deck and pay a professional designer to eliminate the guesswork and make a strong first impression when you're ready to pitch investors.
Give them a try.
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Edrizio emphasizes the importance of perseverance, adaptability, and maintaining conviction in your vision, even in the face of seemingly insurmountable obstacles. Drawing from his experience, Edrizio provides great advice for founders at various stages of their journey, making this episode a must-listen for any tech entrepreneur.
Edrizio dela Cruz is a Dominican-born entrepreneur and fintech innovator. After immigrating to the US at age 12, he served in the Air Force as an airplane mechanic before transitioning to Wall Street and then pursuing his MBA at Wharton. Edrizio founded Regalii (later rebranded as Arcus) to address inefficiencies in cross-border money transfers and bill payments in Latin America.
Under Edrizio's leadership, Arcus raised over $25 million in funding and was ultimately acquired by Mastercard. His journey from immigrant to successful tech founder has been documented in his book, "The Underdog Founder."
Currently, Edrizio runs The Founder School, a 12-week program dedicated to helping diverse tech professionals launch successful startups. Drawing from his experience in founding, scaling, and selling a tech company, he's passionate about creating opportunities for underrepresented founders in the tech ecosystem.
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Blog âş Podcast âş YC to Acquisition: Air Force to Arcus Founder Edrizio De La Cruz
YC to Acquisition: Air Force to Arcus Founder Edrizio De La Cruz
Podcast Transcript ⢠Published October 10, 2024 ⢠Host: Jason Kirby ⢠Guest: Edrizio De La Cruz
Arcus founder Edrizio De La Cruz joins host Jason Kirby to unpack a decade-long fintech journeyâfrom the U.S. Air Force and Wharton, to YC 2013, multiple pivots (Regali â Arcus), scaling bill-pay APIs across LATAM, fundraising under extreme pressure, and ultimately a successful acquisition by Mastercard. He also shares what heâs building next at Founder School and lessons for diverse technical founders.
In this episode
- Air Force discipline â founder mindset
- YCâs impact and the power of the room
- From remittances to bill-pay APIs in Mexico
- Raising in extensions, surviving pulled term sheets
- Series A breakthrough, pandemic turbulence, M&A decision
- Founder School: incubating diverse technical founders
- Common early-stage mistakes & pitch advice
{ "url": "https://blog.thunder.vc/edrizio-dela-cruz", "title": "YC to Acquisition: Air Force to Arcus Founder Edrizio De La Cruz", "publish_date": "2024-10-10", "video_url": "https://youtu.be/JKOv6o5tBhc", "persons": { "host": "Jason Kirby", "guest": "Edrizio De La Cruz" }, "entities": ["Arcus","Mastercard","YC","Wharton","TechCrunch Disrupt","Citi","SoftBank","Mexico","LATAM bill-pay API","Founder School"], "topics": ["founder resilience","pivots","seed to Series A","rolling closes","board dynamics","M&A","incubation for diverse founders"], "highlights": ["Pivots from remittances (Regali) to bill-pay API (Arcus)","Raised ~$3M seed post-Disrupt; multiple extensions before Series A","Pulled $10M term sheet; rebuilt round with Mexican fund","Pandemic-era B vs. acquisition decision â sold to Mastercard","Launch of Founder School incubator and lessons for first-time founders"], "cta": "Watch the full episode and check out Founder School applications." }
Jason Kirby: Hey everyone, welcome back to todayâs show. Today we have Edrizio De La Cruz with usâfounder of Arcus, acquired by Mastercard, raised over $25 millionâan amazing founder with an amazing story. Welcome to the show.
Edrizio: Hey Jason, excited to see you again.
Jason Kirby: Great to have another chat. Last we spoke, we were talking about venture studios and it looks like youâve already made that happen with the Founder School, which we can talk about later. But before we get into specifics, Iâd love for you to introduce yourself. What led you to launching your company? Weâll start there and then go into your journey.
Edrizio: Thanks, Jason. Iâm Dominicanâborn and raised in the Dominican Republic, immigrated to Harlem when I was 12 years old, and ultimately went from the Air Force as an airplane mechanic, to Wall Street, to school, and then decided at business school I wanted to tackle a problem Iâd seen firsthand: money transfers. The process of money transfer hadnât really evolved from when I came to the U.S. to when I was graduating from business school at Wharton. Same exact process, while technology had evolved. So I thought, how do we make this dramatically faster, cheaper, better with technology? I called that company Regali.
Jason Kirby: Thatâs how things initially started, but I always bring up that you started your career in the militaryâthe Air Force. How did that set you up for success and great opportunities? What was that experience like that ultimately led to this?
Edrizio: The Air Force was fundamental in my approach to everything. It provided rigorâdiscipline and precision. Anyone who knows me knows Iâm a stickler for details, being on time, following processesâalmost to a fault. Itâs hard to get rid of that. But itâs an attribute Iâm forever thankful for. It set me up for success in so many other aspects.
Jason Kirby: Letâs talk about the transition from business school to investment banker to launching Regali to what eventually became Arcus. Tell us how that journey worked out and when you realized you needed to raise money.
Edrizio: I came out of Wharton, decided to start the company. I had no clue what I was doing. Most of us think we doâespecially coming out of business schoolâbut you learn quickly you donât. I applied to a bunch of acceleratorsâmost said noâand one ultimately said yes: YC. It quickly transformed how I think about startups and myself as a leader. The quickest shift was access to the right roomâbeing with people further along than me. I remember our first group office hours with companies ahead of usâseeing the bar in practice. Itâs hard to be what you canât see, but when you see it in the flesh, itâs easier to aspire to the top 1%.
Jason Kirby: 2013 was a solid year to be in YC. Iâve got to askâis that sweater actually 11 years old and still running strong?
Edrizio: Yep, Iâve kept it. I donât think they make those anymoreâthey just give you a random Tâshirt now. I definitely wear it with pride.
Jason Kirby: From what I found, you ultimately raised $25 million for Arcus, correct? Walk us through that journey. What was the product serving the LATAM market? When did you decide you needed to raise money, and what was that like coming out of YC?
Edrizio: Coming out of YC, the expectation to raise capital is standard. Itâs a 12âweek program structured toward demo dayâshowing growth over that period. We didnât raise much at demo day. After that, I changed my pitch and got a second chance to present at TechCrunch Disrupt in September 2013. Made it to the finalsâlive on CNBCâand about six months later raised a total of about $3 million seed, which was a lot back then. After that, we were off to the racesâand quickly learned nobody wanted our first product. We killed that version, then raised small chunksâbridge roundsâuntil we got our Series A in 2017.
Jason Kirby: Thatâs the untold story of fundraising. Multiple pivots and iterations. How did you navigate missing PMF, having YC expectations, then subsequently say: we missed, but give us more money and weâll try again?
Edrizio: Part of the great thing about YCâand many West Coast investors we hadâis they expect this. Most companies donât hit it out of the gate. At YC weâd show a slide: ~90% of companies fail; ~9.9% succeed over seven years; ~1% succeed overnight. If you havenât succeeded yet, youâre on the right track. Each pivotâfour or fiveâbrought us closer. It was a grind: 2013â2017, a million here, a million there. In 2017 we finally got a $10M term sheet from a major bankâpulled three days before signing. I hopped on a plane to a conference in Phoenix, got told no a bunch, got one maybeâfrom a fund in Mexico. I flew there. That day, the biggest earthquake on record hit. Emergency landing. Meeting canceled. I wasnât going home with three weeks of runway. A week later I met the partners; by the time I got to the airport they said theyâd do it. We closed the Series A in November 2017.
Jason Kirby: Was that your first time talking to that firm?
Edrizio: Noâthey were already part of the round as the coâlead with the U.S. bank. The bank pulled out with no real reason. I gave the fund context on why we were better off without it and why we were on an upward trajectory. They believed in the mission and came in.
Jason Kirby: I joke that founders fundraising are juggling a house of cards on fire while riding a unicycle. You had three weeks of runway and still projected strength. What was that stress like in the meeting?
Edrizio: Iâve never been more stressed. The day the term sheet was pulled, it felt like the rug was ripped out. Blueâsky day in NYCâI felt in freefall. I went home, stared at the ceiling for hours; my wife asked what I was doingâI broke down and cried. Next morning I flew to Phoenix and talked to anyone whoâd listen. Got a maybeâtook a shot on myself and flew to Mexico. I wasnât leaving without trying everything. You win, or you die trying. I was going to fight to the end.
Jason Kirby: Now I see why you wrote a bookâyouâre a great storyteller and youâve got a great story. For those who havenât heard, the book is called The Underdog Founder; get it on Amazon. Stepping backâthose âkeepâaliveâ chunks you raised: were they insiders or new money?
Edrizio: A mix of existing and new. What people now call Seed+; back then âextensionsâ or âbridgeâ (with a negative connotation). Fundraising is storytelling under massive distress. You must come from leverage and strength. Youâre not asking for moneyâyouâre inviting people to join the journey; investing is the ticket. I believed we were on the right trajectoryâthe next feature, product, or market would unlock it. That conviction helped raise small rounds to keep going.
Jason Kirby: Founders are always fundraising. You get the Series Aâmoney hits. How did the next year look?
Edrizio: Immediate honeymoonâfigurative and literal. I signed paperwork during my honeymoon. 2018 was a good year: building the team, hitting the ground in Mexico, developing the product. Weâd just pivoted into an API for bill payments in Mexico. It started to workâa calm before the next storm.
Jason Kirby: Add context to the product and the brand swapâwhat did the solution do?
Edrizio: With the Series A, we pivoted away from crossâborder remittances to bill payments via API. In Mexico, unlike the U.S., autopay and bill presentment werenât as seamlessâoften you physically carried a bill to a location to pay. We built an abstraction layer on top of local billers and exposed it as an API consumed by neobanks or banks. Around the same time, a tidal wave of venture capital hit LATAMâeveryone launched wallets, and one core feature was bill pay. We had the best API. That niche worked. We rebranded from Regali to Arcus in 2017.
Jason Kirby: Can you share the scale you reached as a company?
Edrizio: By 2020 we were growing: 200+ customers, 100+ employees. We had the metrics for a Series B (typical A is ~$10M; B is $25â35M; ~20% dilution each round). My wife and I moved to San Francisco to raise the B. Then the pandemic hit. We shifted to a rolling closeâCiti, SoftBank, and others participated. We got a B offer from a major corporation (canât name); then Mastercard offered M&A. We wanted to keep building, but after reviewing the structure, we approved the acquisition route internally.
Jason Kirby: In hindsight, knowing the market crash laterâright call, or do you wish you were still growing Arcus?
Edrizio: In hindsight I look like a genius, but the real point is Arcus scaled inside Mastercard. They kept the brand (changed the logo, kept the name) and scaled it quickly. As a founder you miss operatingâcoaching the teamâbut Iâm very happy with the outcome. Itâs one of those rare cases where M&A was done correctly and everyone won.
Jason Kirby: You were running a Series B processânot an M&A processâthen offers came to either fund or acquire. How did you manage the board, and what ultimately swayed you to M&A?
Edrizio: A lot was happening. Personally, my wife and I had a miscarriage; I got very sick with COVID; my grandmother passed from COVID. Internally, I parted ways with a coâfounder who was a best friend; with my remaining coâfounder, everything felt like a fight. I was even temporarily fired. I went back to the board: we need to raise capital, and Iâm the one who knows howâlet me stay and run it. We raised from SoftBank and Citi, then got a Series B offer from a corporation, then Mastercardâs M&A offer. I stayed to executeâleadership change would add friction. We chose and ran the process through.
Jason Kirby: This is why I ask these questionsâthe real behindâtheâscenes chaos. You have to manage board, coâfounders, investors, employees, acquirer, prospective investors, and your loved ones. You canât tell employees until itâs done; theyâre confused about why theyâre building certain things.
Edrizio: Exactly. We started in 2020 and, due to regulations and external approvals, it took until November 2021. We didnât know if it would happen. Once approvals came, we finally announced internallyâpeople asked when it happened. It had been in motion a year.
Jason Kirby: Switching to today: your book The Underdog Founder and your venture studio, Founder School. Why did you start it, and whatâs the offer?
Edrizio: I sold to Mastercard, then returned to YC as a visiting partner for a yearâlearning how to run an accelerator endâtoâend from the best. I learned how similar everything looks at the start, regardless of category, and how to coach early founders with standardized, biteâsized advice. Founders feel compelled to reduce othersâ pain after living it. After publishing the book, many asked for mentorship, which led to Founder School: a 12âweek program dedicated to helping diverse tech professionals launch startups in about 12 weeks. Mostly employed engineers and data scientists: how to generate ideas, talk to customers, launch noâcode MVPs, and get paidâready to enter accelerators like Techstars or YC.
Jason Kirby: So itâs an incubator feeding into accelerators. Predominantly focused on diverse founders?
Edrizio: Yesâdiverse technical founders: engineers, data scientists, managers at SaaS and big tech. Itâs a safe space to ideate and experiment. In twelve weeks the goal is a real business generating real revenue with customers, ready for an accelerator. We graduated six companies last year; on average they raised a few hundred thousand each. Wins include Linker Financial ($3.7M from CommerzVentures) and Chatforce ($1M from Battery Capital). Weâre spinning the flywheel.
Jason Kirby: What common earlyâstage mistakes make you jump out of your seat to help?
Edrizio: Taking too long to launch. Founders chase perfection and treat v1 as a reflection of identityâthatâs corporate conditioning. In startups, the first product is an experiment. Launch to learn. At Founder School we force a lightweight, noâcode MVP in the first couple of weeksâotherwise the whole batch gets spent debating ideas.
Jason Kirby: Pitch decksâanything particularly unique you did or are proud of?
Edrizio: Two things. First, the YC template: each slide has one main point; lead with your strongest point (traction or team); put it in the headline; the rest supports it. Second, I made it personal at Disruptâphotos of my ID and my grandmotherâthe why behind remittances and bill pay. That authenticity shifted us from raising almost nothing to raising about $3M in seed.
Jason Kirby: Whatâs the best way for founders to follow you and learn moreâbook, Founder School, etc.?
Edrizio: LinkedInâsearch âEdrizioâ (there arenât many). My book The Underdog Founder is on Amazon. For Founder School, follow me on LinkedIn; weâre opening applications for a November batch. The website: phoenixfounders.com.
Jason Kirby: There you go. If youâre an aspiring founder who loved Edrizioâs story, reach out and apply when it opens. Weâll include links to the book, website, and where to apply. Appreciate you joining usâand thanks for sharing all the insights.
Edrizio: Thank you, Jason. Appreciate it. See you, brother.
Jason Kirby: Awesome.
Episode Links: Book â The Underdog Founder ⢠Founder School â phoenixfounders.com ⢠Video â YouTube
FAQ
What is Arcus and what problem did it solve?
Arcus built a billâpay API for Latin America, aggregating hundreds of local billers so that banks and fintech apps could offer seamless digital bill payments inside their platforms.
How did YC influence Edrizioâs journey?
YC exposed Edrizio to topâperforming founders and raised the standard for speed and execution. The program provided networks, structure, and the credibility to secure early funding.
What were the toughest fundraising moments?
Arcus faced multiple rejections, a pulled $10M term sheet days before signing, and survived on small extensions until finally closing its Series A. The pandemic also disrupted its Series B plans, leading to an M&A with Mastercard.
Why did Arcus sell to Mastercard?
Though the company was preparing for a Series B, Mastercardâs offer aligned strategically and structurally. It allowed Arcus to scale faster under a trusted acquirer while preserving the brand.
What is Founder School?
Founder School is a 12âweek incubator designed to help diverse technical founders build noâcode MVPs, validate with customers, and graduate into top accelerators like YC or Techstars.
What common mistakes do early founders make?
One of the biggest mistakes is waiting too long to launch. Founders often chase perfection instead of treating their first product as an experiment to learn from customers quickly.