Are You a Business Owner in Latin America Trying to Raise Capital in the United States?

You are an entrepreneur who has more than just an interesting idea and has the ambition to build the next big-thing LATAM based business. You did your research and heard of the very promising success stories on how to scale up models across the region. Still, you are striving to find sources of local funding. Perseverance is in your DNA, and you are more than familiar with the challenges of creating a new business, and for operating and surviving in highly unstable political environments and markets. Raising US funding for a startup can feel daunting, particularly if you lack experience in this area. Fortunately, there are ten simple suggestions that can help you secure the funding you need to succeed.

1. Develop a Clear and Solid Business Plan

The first and most critical step to successfully raising funds is developing a comprehensive business plan. Your plan should include details about your business, target market, competition, marketing strategies, and financial projections. Investors are often looking for businesses with potential to grow. If you can share a compelling business story that demonstrates growth potential, investors may be more likely to invest in your start-up.

2. Build a Strong Network

Networking is an essential part of fundraising. Attend local and regional industry startup events, social gatherings, and conferences to build relationships with investors, business leaders, and other entrepreneurs. Never underestimate the power of word-of-mouth referrals. Your network should include US counsel right from the get-go. This also helps to create a buzz around your business and gain brand visibility.

3. Secure Angel Investors

Angel investors are wealthy individuals who provide early-stage funding to startups. Reach out to this group of investors by attending investor meetings, conferences, industry events and contacting people you know to inquire whether they can introduce you to someone who might be willing to invest. Angel investors tend to focus on local initiatives, industries where they operate and projects that are of personal interest to them.

4. Incorporate and Protect your Information

Set up a holding company to develop the initiative, define the relationship among founders and other stakeholders, and welcome investors. To learn about the different types of corporate entities that are available in the U.S., you can read Brown Rudnick’s article on that topic by clicking here.

Knowledgeable US counsel can help you determine the proper location and type of entity, as well as how to protect your confidential information and the intellectual property you develop. To learn how to optimize the value of your intellectual property, you can read Brown Rudnick’s article on that topic by clicking here. 

5. Consider Alternative Sources of Funding, such as Crowdfunding, Grants and Loans

Crowdfunding websites like Kickstarter and Indiegogo are popular platforms for startups to raise funds. Publicize your crowdfunding campaign through social media, email, and digital ads to reach a broader audience.

For qualifying businesses, Latin American and the U.S. government offer several grant and loan programs for small business funding. Research the different programs available and apply for the ones that align with your business plan and goals.

6. Use Accelerator Programs

Accelerator programs provide mentorship, resources, and funding to startups. Research the available accelerator programs and apply for the ones that can provide the most significant value to your business. Some of these accelerator programs are based in Latin America and others have made available on-site resources across the U.S. Multilateral organizations, such as IDB Labs, are also a valuable resource.

7. Participate in Pitch Competitions

Pitch competitions are valuable opportunities to showcase your business and pitch to potential investors. Participate in competitions relevant to your industry and prepare a compelling pitch.

8. Leverage Social Media

Social media is a powerful tool to raise awareness and attract investors. Engage with your audience through social media platforms like LinkedIn, Twitter, and Facebook to build relationships and raise your brand profile. Social media offering of investments have implications under the US and LATAM securities laws, therefore it is important that you seek guidance from your legal counsel in this regard.

9. Create a Compelling Presentation and a 2-minute “elevator” pitch.

Your fundraising pitch should be engaging, informative, and persuasive. Develop a powerful pitch deck that conveys the value of your business, highlights your unique selling point, and showcases your financial projections. You should also work and perfect at all times in a 2-minute presentation to the investor audience – the “elevator’ pitch.

10. Seek Venture Capital

Venture capital (VC) is a type of financing that provides funding to startups with significant growth potential. However, VC firms typically require a significant ownership percentage in the business, so be prepared to negotiate the terms of the agreement carefully.

Raising funding for a LATAM startup in the US requires significant legwork, research, and networking. By employing these ten simple suggestions, you can create a strategy that will help you effectively raise funds, build relationships with investors, and ultimately achieve success. With a well-prepared business plan and a strong network, you can secure funding and scale your business to new heights.

Raising capital in the United States can be challenging. Our experienced team of lawyers, many of whom are admitted to practice in Latin American countries, and who have built long-lasting and trusting relationships throughout their careers can assist you. Please get in touch if you would like to learn how we can support your initiative!