Smart Scaling: Latitud Principle #4

Been through a startup boom (dot-com in the 2000s, unicorn frenzy in the 2020s)?

Then you’ve also seen this:

Too much capital, way too soon.
Too many hires, way too fast.
Too many product launches, not enough proof.

“Growth” was throwing resources in every direction, hoping something (ANYTHING) would stick. It worked…

Right up until the math didn’t. When the numbers collapsed, so did plenty of startup missions that once felt unstoppable.

The bear market changed that thinking.
Then, artificial intelligence cemented another kind of execution.

Now, reckless blitzscaling not only makes you a bad spender – it dooms you. Move without intention and you won’t convince anybody, customers or investors. Tomorrow, a sharper, leaner newcomer could take your market.

At Latitud, this is our fourth conviction: scaling smart is the way to build something that will inevitably last.

Chart your own optimal route — at the right time, the right moves in the right order. Raise only what you need, when you need it. Dedicate yourself fully to validation and iteration, all the way to conviction.

Here’s a bit on how we guide our fellows and portfolio founders to do exactly that: transform their ambitions into moves for the next decade.

Your smart route when building and scaling

We give you the full class on how to kick things off in The Latitud SF Fellowship, our 9-week program for top pre-founders from LatAm. Then, you can do that zero-to-one execution with even more support by raising your pre-seed round with Latitud Ventures.

But here’s a teaser:

1. Connect your idea dots

The best founders don’t wait for ideas to pop into their heads like a cartoon lightbulb: they’ve been training for this moment since birth.

Most of the time, the opportunities you notice are a direct result of your past experiences. When you’re deep into the weeds of a problem, knowledge smacks you in the face. You see gaps others don’t, make questions few would think of asking, and maybe finally arrive at ideas. Hey, half glass full!

And here’s the kicker: at this level of depth, even when you’re not actively thinking about it, your brain keeps connecting the dots in the background. The more time you spend wrestling with a problem, the more obvious (to you) the best ideas become.

2. Put ideas to the test, your ego on a leash

Ideas? Cute.
Dollars? Better.

Until you drag your beautiful, fragile thought into the real world and let it take a few smacks, it’s just a daydream.

We can’t stress enough how important this step is. Take as much time as possible in this phase to talk to every single stakeholder who matters:

• Customers (first, always)
• Gatekeepers (regulators, standards bodies)
• Enablers (suppliers, distribution partners, weird middlemen)
• Aftermarket folks (support, integrations, resellers)

These convos will either strengthen your thesis or rip it apart (both are wins btw). And they should lead you to a clearer thesis to commit to... for now.

3. Ship, validate, iterate, scale

1. Ship that V0. Take accumulated insight to build initial, borderline embarrassing features that directly solve a pain. No nice-to-haves allowed here.
2. Validate and iterate. Go back to those same potential customers and turn them (and others) into testers—preferably paying ones. Let their dollars, not their compliments, tell you what to expand, what to scrap.
3. Scale. When you see this kind of demand, you should think about how to keep capturing and serving your share of the market. That’s when you consider automations, hires, all that grownup stuff. Exercise caution, knowing where every dollar of your runway is going to and how that’ll make you even more dollars.

Your smart route when fundraising

As pre-founders turn into founders and go out to raise their first check, we see two possible fundraising paths:

1. The Pre-Seed Path.
2. The Out-of-the-Gate Seed Path.

As we said, you need to chart your own optimal route here. There is no one-size-fits-all: each founder needs to consider aspects like previous experience, risk/return profile, and the startup’s business model or thesis (building in infrastructure, your MVP could cost more than $500k).

But in our experience…

The Pre-Seed Path tends to be advantageous for most.

Through it, you're raising to build and validate something (more on that below). You're willing to separate your fundraising into two cycles, potentially diluting a bit more (not always), to increase alignment with investors.

Larger or multi-stage funds may demand too much velocity and growth in the short term. Instead, pre-seed investors are solely focused on the honest advice and warm intros that’ll give you the necessary signals to raise the best next round possible.

That’s our stance at Latitud. Excluding some cases, we advise portfolio founders to:

• Raise a pre-seed round within $250-750k from investors with larger risk appetite and expertise in early days challenges and playbooks – angels, accelerators, micro and pre-seed funds (like us!). The dilution is usually 10% or less.
• Use that capital to execute on their zero-to-one. They assemble the founding team, build an MVP, iterate, and validate key hypotheses before going out to…
• Raise a “large seed” round, within $2.5-5M. These are raised from more institutional seed funds, with dilution staying around 20%.
• Execute towards product-market fit. Hopefully, with no real need for additional funding.

A launchpad for smart scaling

Trying to nail your optimal route for fundraising and building at the same time, solo, is brutal. When AI-driven startups are zipping past you at light speed, it’s understandable to wonder if the race is already over.

We know because we’ve seen stories of pre-founders and pre-seed rounds play out time and time again. Hundreds of early-stage conversations led us to a deep understanding of the opportunity born from LatAm founders, and patterns to seize it. We’ve since supported thousands of founders and invested in dozens of them.

That compounding experience made it inevitable not only for us to believe – but also to build systems to make that route optimization more scalable.

Smart scaling shouldn’t be a gamble. Here’s our most recent iteration on how we help founders achieve it:

1. For the pre-founder phase, we designed The Latitud Resident Fellowship.

Our residency is a path from first idea to first product with speed. We select pre-founders with no company or fundraising efforts – just an urgent drive to explore ideas to solve a pressing, massive problem.

With a 1% acceptance rate, our program combines a small, take-the-leap check with a few intensive weeks of learning and building. Lessons come from potential customers and the playbooks of the top founders, operators, and investors across both LatAm and San Francisco. (Read more about how our latest visit to SF went, and why we think this bridge is a must for top founders from LatAm.)

In these two months, resident fellows go from pre-founders to super early founders, from day -1 to 0. They reach thesis clarity and commitment, and are ready to transform demo into MVP.

That’s when founders should consider raising their first institutional round. They already validated founder-market fit, market opportunity, and an initial product hypothesis through pure hustle. Now, they need to compromise just enough dilution and raise just enough capital to test their product’s value and customer acquisition channel as quickly as possible.

2. That’s when our fund comes in. Latitud’s Fund II is aimed at the super early founder stage.

We’re comfortable leading your pre-seed round, investing alongside and even before angels. We invest in entrepreneurs building AI and software-first businesses aiming for high scalability in LatAm, the US, or beyond. Although sector agnostic, we have a soft spot for fintech, vertical SaaS, healthtech, marketplaces and e-commerce enablers, and proptech.

Think of our ideation program but on steroids: more capital, longer support, and even more tailored intros. All of our tested playbooks so you can go from zero to one with your MVP, plus set yourself up to raise the best seed round possible down the line.

Some of the companies invested by Latitud include Hyperplane (exited to Nubank), BHub, Pomelo, Tapi, Finkargo, and Stark Bank.

TL;DR: Smart Scaling

The market’s tougher. AI raised the bar for quick results. Blitzscaling might sound exciting—but smart scaling means building startups that live to see the next decade.

Race too fast, and you’ll crash before product-market fit. Move smart, and every step builds inevitable momentum.

So raise what you truly need. Leverage both good and bad experiences. Validate every step to find clarity. Build with conviction. Scale with intention (finally!). That’s how massive, meaningful, build-to-last startups grow.

Latitud Principles is a series about our core fundamentals as a pre-seed venture capital fund. Here, we dive deep into why and how we back the earliest stages of LatAm founders and tech conquering the world. Stay tuned for Latitud Principle #5 and beyond.

About Latitud

Latin America spans the greatest range of latitude on Earth — from the deserts of northern Mexico to the glaciers of Patagonia. No other region covers so much vertical ground, crossing climates, cultures, and time zones.

But to us, latitude is more than geography. It’s a metaphor for ambition.

Latitud is the ecosystem compass for Latin America, backing world-class talent before anyone else sees them. As the first-check partner for LatAm founders building good shit for the region and beyond, our high-risk, high-conviction checks have become the most trusted signal for global, top-tier VCs betting on LatAm.

We back those who dream aggressively and act decisively, solving deep, complex problems that transcend borders, industries, and languages. From pre-founder to pre-scale, we support the region’s boldest entrepreneurs as they chart both their starting point and their north – their latitud and longitud.