Fundraising 101: 3 Paths to Raising Capital as a LatAm-Born Founder

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At Latitud, we sit in a unique position. We see founders at their earliest stages (sometimes just a memo or PowerPoint). We later follow them all the way through their (series) ABCs.

We've watched some teams raise $500K pre-seeds that turn into $50M companies. We've seen others raise $3M out of the gates and struggle to find product-market fit. We’ve seen these two stories in reverse too. So what we've learned after seeing thousands of startups crafted by LatAm-born founders, and backing 100+ of them?

There's no single path to successfully raising money. But there are patterns. Understanding them can save you months of wasted effort (and dilution).

We can divide these approaches into three distinct paths. See their trade-offs and how to actually execute the one you’ve chosen.

Path A: Pre-Seed to Large Seed

Path A is the traditional route. Maybe you raise some friends and family at the beginning, maybe you bootstrap a little bit. Later, you raise what we call a pre-seed round: the first time you go out and raise external capital.

Pre-Seed Round

• Size: ~$500K
• Sources: Angels, accelerators, pre-seed funds like Latitud
• Dilution: 10-15% (ideally, don't dilute beyond 10%)
• Objective: This is usually raised when you have a PowerPoint. You build the very early team and the early MVP to validate key assumptions.

After 12-24 months, you go out and raise a Large Seed Round:

• Size: $2.5 million+
• Sources: Both early seed funds and late seed funds
• Dilution: ~20%
• Objective: You'll execute and get to product-market fit (maybe raise a series A).

Path B: Early Seed Round

Path number two is different. We see experienced founders saying, "Hey, I have an idea. I have a thesis. I have a PowerPoint. I have an early MVP. I think I have the chance to raise $1.5M.”

Large Pre-Seed/Early Seed Round

• Size: ~$1.5 million
• Sources: Angels, pre-seed funds like Latitud, seed funds
• Dilution: 15-20%
• Objective: Build their MVP, validate their hypothesis, and execute all the way to product-market fit (and maybe a series A).

Many times, we see that they need to raise a bit more money along the way–which is not necessarily bad, depending on their dilution.

Path C: Large Seed Out of the Gates

Path C is basically Path B on steroids. Someone goes out of the gates with a PowerPoint and raises a large seed — $2.5M+.

We have seen it a few times during this past year, but it’s definitely harder in a bear market and constrained to very experienced operators or second-time founders with previous exits.

The Trade-Offs: Path A vs. Path B

Is there a right path? Is there a better path? The answer is no. It really depends on the company and the founders (especially on the founders). Not only their previous experience, but also their risk-reward profile and how they like to build the business.

Path A Pros:

You're trenching your fundraising.

You're saying, "Okay, I'm raising less money now that I have no validation." There's a high chance you won't validate what you thought, and you'll need to iterate or even pivot hard. You raise your seed round only when you've already gone through that process.

You're promoting better investor alignment.

It's very different to bring in an angel, an accelerator like YC, or a pre-seed fund like us. We all know you'll be in this discovery process. That you'll be building slowly, doing things that don't scale, probably iterating hard or pivoting. A multi-stage fund will maybe want to see you validate and grow quicker than you should.

Path A Cons:

It’s probably slower and risks a higher dilution.

You raise less money, so you execute with less capital. Maybe if you have competitors, they can outpace you.

There’s also potentially more dilution by Series A (though if you went with Path B and had to raise an extension, maybe you're at the same level of dilution).

Path B Pros:

It’s faster, with potentially lower dilution.

If you raised $1.5M out of the gate, you can hire and build the MVP faster. And maybe you need it (think of an infrastructure play that needs more developed projects, and therefore capital).

There’s also potentially less dilution if you execute like a madman and go straight from an early seed to a series A.

Path B Cons:

More fundraising risk.

You might go out to the market with a PowerPoint and say, "Hey, I'm raising $1.5M at $10M valuation," and the market might say, "We're not interested. You have no validation. Come back when you have some early validation."

In that case, you'll need to go back to the market and say, "You know what? I'm not raising $1.5M. I'm raising $600K at a $6M valuation." You’ve probably burned some bridges on your way there.

Risk of raising too much too early.

We saw this during the bull market: bloating payroll, structure, and overall costs too early.

When you have the capital, it’s hard to execute and build like you’ve raised a fraction of it. You feel compelled to move fast. But if you do this before product-market fit, you might start pursuing lateral projects and launching too many, too early.

Determining Round Size

How do you figure out what to raise?

1. You look at your capital requirements. What's your minimum base case number for the next 18-24 months? (If you can look at 36, that's ideal.)
   
   
2. Go there with your base number, not with the ideal size. Let’s say you actually need to raise $2M. Imagine telling funds, "Hey, we went out to raise $2M. But now we have $3M on the table, so we'll just raise more and strengthen our balance sheet." They'll probably have more FOMO and be more inclined to invest in you. The worst alternative is to go out and ask for $4M, don't get any demand because the funds don't even engage with you, to only then back track and say, "You know what, I'm not raising $4M, I'm raising $2M."

The Fundraising Playbook

If you were trying to convince people to climb Aconcagua with you, with whom would you start? I would start with my closest, craziest friends.

You're doing something similar: trying to convince people to do something extremely risky. Invest in an early-stage startup crafted by a founder born in Latin America

1. Start with angels. They’re usually the ones playing the riskier game: investing their own money and very early. They should be able to tell you after one call if they’re down or not, which is extremely appreciated. They can also become a key signal and help spread the word to VCs.
   
   
2. Use pre-marketing as a secret weapon. Talk to funds to know the partners, what they did in your segment, and what they consider before investing in your stage. Mention you’re not fundraising yet, but will do so in a few months or quarters. Sharpen your axe before chopping the tree: do the research, understand who invests in your thesis, build your funnel, and map out who can connect you to these funds.
   
   
3. Calendar density: concentrate actual fundraising in 2-3 weeks. Schedule calls in waves: angels, follower funds, and lead funds. This will let you stack commitments and hone your pitch by the time you’re talking to your dream investor. Ideally, you end up with more than one term sheet on the table. You're then in a pretty good spot to have leverage and negotiate the terms up. You can then tell that lead VC, "We started pitching 10 days ago and we're at 50% of our fund target."

The ultimate goal here is to generate a sense of urgency in the funds. If you fundraise over six months and talk with one fund here, one fund there, the funds will just wait and see. Given the option, everyone would choose to have more certainty about traction and round momentum.

On the other hand, if they know you're running a tight process and you're talking with 30-50 funds in the span of 2-4 weeks, they know they'll need to move fast or they'll miss the deal.

Look, fundraising is hard. It's going to take more time and energy than you think (maybe 80% of the CEO’s schedule during these months). I've seen really good founders with really good theses take a year to close their round. Those who succeed are the ones who understand the game they're playing.

You're going to get a lot of no's. You're going to have investors ghost you. You're going to question whether you should have started this whole thing. That's normal; almost every founder has been there.

But here's what I want you to remember: the market isn't rejecting you personally. It's testing your resilience, your ability to iterate, and your commitment to building something real. The founders who make it aren't necessarily the ones with the best first pitch.

They're the ones who listen to feedback, adjust their approach, and keep pushing forward with conviction. The ones who know their path, build their CRM methodically, and create real urgency while not burning bridges along the way.

This is our playbook at Latitud, built from seeing thousands and supporting dozens of companies navigate these exact challenges. It’s an optimized path to not only raise the round size and valuation, but hopefully pick the best partner for you.

It's not perfect, and your journey won't be either. But if you can internalize these principles, you'll be in a much stronger position than most founders who are winging it.

Did this playbook help you or not? Maybe it helped you so much that you feel ready to pitch us?

Then we’d love to hear from you. So here’s a first step: find my contact and shoot me a message!