Why Most US VCs Still Miss LATAM's Best Deals
Most people say LATAM is heating up. But when you ask founders who wrote their first check, it’s rarely a US fund.
Despite record Series B+ investments from global players, early-stage rounds remain largely local. And this isn’t just about speed or distance. It’s about how venture actually works in emerging markets.
Pattern Recognition Doesn’t Apply When the Patterns Don’t Exist
US VCs often bet on repeat founders or models that mirror Silicon Valley norms. But Latin America's standout companies ( e.g. Auth0, Tiendanube, Clip, and Rappi), grew from local founders solving huge problems with unconventional playbooks, often long before global VCs noticed. Auth0, for example, started with a ~$1M USD seed round and eventually reached a unicorn exit after early local support (Endeavor).
Most US funds rely on established heuristics:
2nd-time founders
YC badges
Clear vertical analogues to US winners
But in LATAM, the biggest wins often come from founders no one’s heard of, in markets no one understands, with business models that don’t clearly map to the US.
Early-Stage Investing Is Not a Capital Game. It’s an Access Game.
Even with $100M+ USD of AUM, a fund is irrelevant in pre-seed unless it’s:
Deeply networked with local operators
Fluent in founder dynamics and country-specific pain points
Trusted early, before traction exists
Most global funds arrive only when the story is already obvious. At that point, there’s little room left on the cap table, and less upside.
Local VCs participated in 85% of all seed and Series A rounds in LATAM in 2024. That reflects how critical local networks and early conviction are (LAVCA).
Local VCs Win on Access, Signal and Context
Local investors provide:
Early relationships with founders before traction exists
Live insight into execution aptitude and local market dynamics
Influence over key strategic decisions and follow-on rounds
Conclusions
Local VCs provide a real edge at Seed and Series A Rounds in LATAM. Their proximity, networks, and early involvement position them to capture the startups that global funds eventually validate often at significantly higher valuations and diluted ownership.
We’re not anti-international capital, quite the opposite. The best outcomes are built with global follow-on support.
But the message is clear:
If you wait until LATAM startups look like US startups… you’re already too late.
Portfolio Companies
News about our Portfolio Companies
Portfolio companies currently raising investment rounds
Pari: Pari Delivery is a Mexican startup redefining the beverage and convenience delivery experience through a fast, seamless, and reliable on-demand platform. Currently raising an investment round.
Medu: They manufacture sustainable personal protective clothing with the necessary technology to be reused, replacing hundreds of disposable suits and allowing up to 50 washing cycles without losing safety properties. Currently raising a $2M USD round.
Ximple: They are transforming financial access in Latin America by empowering resellers with working capital, digital tools, and new income opportunities. Currently raising their seed round.
Supervisor AI: A platform to convert every business conversation generated into growth opportunities and actionable insights. Currently raising a $750k USD investment round.
Please don’t hesitate to contact us in case you are interested in connecting with any of these amazing companies.
Great companies we have recently reviewed:
Simón: a customizable micro-learning platform that uses short videos and interactive content trees to deliver gamified, efficient, and accessible e-learning experiences for companies and users.
Talking to Humans: Success starts with understanding your customers - Giff Constable: A hands-on guide to mastering customer interviews and turning insights into startup traction—essential reading for anyone building something new.
How Founders Are Hacking Growth with Simple, Smart AI Workflows - Founders Podcast.
Founders Who Ship: What Startup Speed Really Looks Like - Abdo Riani.
The “access over capital” point really hits. Even outside LATAM, I’ve seen how the first wins come from being in the room early, knowing the right people, and actually understanding the market before the numbers look good. I help early teams use that head start to hire the right people, set up the right habits, and keep moving fast when the funding shows up. Great points!