Key Strategies to Raise Capital in LatAm

Raising capital in Latam is becoming increasingly dynamic, with Colombia positioning itself as one of the strongest startup ecosystems in the region. According to the global report by Startup Blink, the country shows a growth rate of over 22%. However, challenges remain: while new businesses are growing rapidly, 75 out of every 100 fail in their first two years, and only 25% manage to survive long-term.

In this competitive environment, securing a successful first funding round is one of the biggest hurdles for entrepreneurs. As Daniel Ospina, co-founder of fintech accelerator Pygma, explains:

“The first investment round is not only about raising capital; it’s a validation of the project in the market and an opportunity to create strategic alliances that boost credibility and open doors to new growth stages.”

With years of experience mentoring founders and connecting them to international investors, Pygma highlights five essential recommendations for startups seeking to attract capital in Latin America.

1. Validate the Product Before Raising Capital

Investors increasingly look for evidence that a product or service truly solves a real market problem. Validation doesn’t necessarily mean high sales but can include adoption metrics, user growth, recurring customers, pilot programs, or contracts already in place. These elements reduce perceived risk and strengthen credibility.

2. Build a Strong and Complementary Team

According to Ospina, trust in the founding team often outweighs the initial idea. A strong project must be backed by committed founders with complementary skills, long-term vision, and strong execution capacity. Having a leader experienced in fundraising and negotiation is key to securing investor confidence.

3. Define Clear and Measurable Objectives

Establishing concrete goals allows startups to show investors a roadmap for growth. These objectives should include short, medium, and long-term milestones, always aligned with the use of capital being requested. Understanding investor expectations in advance also helps tailor the pitch to specific interests.

4. Deliver a Transparent and Realistic Pitch

Founders should clearly answer: What is the solution? What problem does it solve? How does it differ from competitors? How scalable is it in Colombia, across LatAm, or globally? A straightforward and realistic pitch increases trust and demonstrates a deep understanding of the business model.

5. Have Clarity in the Numbers

Even in early stages, founders must provide financial projections, capital allocation plans, cost structures, and a roadmap toward profitability or sustainable growth. Ospina notes that while investors in seed rounds do not focus solely on financials, showing a grasp of key metrics and local regulations is crucial to building credibility.

Colombia’s Startup Ecosystem: A Dynamic Landscape

Despite high failure rates, Colombia continues to position itself as a hub for innovation in Latin America. Events like Colombia Tech Week, GoFest, and Latam Fintech Market serve as key platforms to connect startups with investors and strengthen the ecosystem.

The Colombia Tech Report 2024 revealed that more than 50% of startups have not yet secured investment, while 90% of investors prefer early-stage opportunities. The main decision factors include:

• The founding team (89%)
• Scalability (89%)
• Technological innovation (67%)
• Market size (50%)
• Traction (44%)
• Financial health (44%).

As Ospina concludes:

“Colombian entrepreneurship has enormous potential, not only because of creativity and resilience but also for its ability to create solutions that positively impact society and the regional economy. Today, investors are looking for more than a good idea; they want teams that can execute, adapt, and build a long-term vision.”

As Colombia’s startup ecosystem continues to expand, the ability to attract capital in Latam depends not only on innovation but on disciplined execution and clear investor alignment. By following Ospina’s five key strategies, founders can significantly increase their chances of thriving beyond their first round. In a competitive market where resilience and scalability define success, these principles serve as a roadmap for startups aiming to secure investment and position themselves as long-term leaders in the region.