Santiago Molina: my fundraising journey and lessons from raising Finkargo's first round

Andres Ferrer, Santiago Molina, and Tomas Shuk brought complimentary experiences in tech, finance, and logistics to launch Finkargo in Colombia, back in June 2021.

As digital freight forwarders look at the flow of goods, Finkargo looks at the flow of data and money. Latin America's specialized import finance platform for small and medium enterprises even the landscape for these SMEs. Finkargo has gone all the way to $27M+ in equity funding, plus $75M in debt financing. The startup's most recent equity round was a Series A in November 2023.

In this article, Santiago retraces his early fundraising journey and shares his advice to other LatAm startup founders. This is part of our "Fundraising Journey and Lessons" a series of posts, written by mature tech entrepreneurs in Latitud's portfolio. As investors and journey partners, we hope this series will inform and inspire early startup creators in the region.

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Serendipity led three veterans in three complementary industries to meet: myself in finance, Tomas in logistics, and Andres in tech development. We were all looking at the same business opportunity – using finance and technology to allow small and medium businesses to import and export goods easily throughout LatAm, and unlock their full potential.

At the same time we were putting on paper what would turn into Finkargo, we also took the time to draft another essential piece to the startup's success: a fundraising strategy.

Spoilers: many investors rejected us for a myriad of reasons (mostly our initial lack of network and experience in the startup and venture capital game). But a couple of them also bet on our industry history and capacity to figure everything else out.

Here's how that first fundraising journey really went, and the advice I'd share with other LatAm startup founders on the same road.

Answer these before fundraising

The three of us answered four questions before kicking fundraising off – and so should you.

1. Is your idea capital-intensive? Not all venture-backed businesses are capital-intensive – but being one gives you an extra push to the venture capital track (unless you have deep pockets or rely solely on debt).
   
   
2. Is your idea venture-backable? Be certain that A. your business is either tech-enabled or tech-driven (= potential to scale); and B. there's a sizable market and thus opportunity (= an investor could get at least a 10X return on their investment).
   
   
3. Is there an appetite for it in the market? Looking at the current state of venture capital gives a better idea of how much you can actually raise.
   
   
4. Are you willing to take on the responsibilities and risks associated with raising venture capital? After you go with the VC track, you have to adapt to the increased accountability and growth acceleration, not to mention the constant cultivation of relationships with investors.

Choose a fundraising path

Although our first fundraising round went public as a $7.5M Seed, we actually raised that in tranches: a pre-Seed, a pre-Seed extension, and finally the Seed. While each founder should think about their fundraising path, here's how we did it at Finkargo:

• Pre-Seed, March 2021: we raised a first check with friends, family, and angels to provide us with just enough capital to build and test an MVP.
• Pre-Seed extension, August 2021: only after we saw a lot of traction from this MVP, we went for an extension with strategic founders, angels, and investors (Latitud included).
• Seed, December 2021: the extension allowed us to keep that traction going so that we could raise a more sizable round from great investors later.

Go from rookie to playbooker

All three of us were rookies in the venture capital ecosystem (Finkargo is actually the second startup for Tomas and me, but the first startup was entirely bootstrapped). And while our journey turned out to be successful… Not everything went perfectly, especially in our first round.

We did it – but we could have been more efficient and raised more.

• What we did wrong: We set up a deck and connected to angels here and there. Needless to say, we didn't know many people and much less how to actually pitch.
• What would have improved our fundraising odds: putting in previous work to build a network and following a playbook.

We followed the fundraising playbook laid out by Latitud, based on building calendar density to reduce the pressure on the founders while creating FOMO in investors. Combining that playbook with 1. closer coaching on our materials and pitching + 2. intros to super angels, negotiations with investors went much more smoothly from the extension onwards.

Become comfortable with being a contrarian

More than two years after that pre-Seed and Seed marathon, there's another thing I'd have done differently: I'd have thought bigger and more globally from the start. This would have benefitted both our vision inside the business and our chats with investors.

The bolder your vision, the more of a contrarian you are. This can attract the right investors, but also open you up to more rejections.

I know dealing with no after no can be difficult – but the only way to survive is by developing a hard skin through experience and resilience (and calendar density will bring you lots of opportunities to learn both).

I can't count how many funds have told us we wouldn't raise money because they thought we 1. didn't have the right network or experience, 2. we were in a lending business, 3. it was too big of an idea and we weren’t going to be capable of achieving it. We had no other option but to feed on every no, and keep executing until our next investor meeting.

A real story:

Back when we were raising our very first tranche for Finkargo, we had one firm that wasn't very convinced about our VC access. (We're on the older side of founders.)

Things were taking their time but moving. After we had our term sheet signed, I was at a board meeting of my previous company and announced I'd step down as CEO. I'd keep being a board member and shareholder but stop operating tomorrow onwards, as I was kicking off Finkargo.

That meeting was on a Wednesday. On Thursday morning, I got a message from that firm to jump on a call. They said they were pulling back as the investment committee kept its doubts.

I had already given up my salary. Finkargo had already hired the first employees and stopped fundraising.

It's one of these tough moments where you question everything that you're doing. Then you remember what brought you to this point – and start working out the next steps. We restarted fundraising, putting money of our own to pay salaries for some months.

Pitch, learn, and optimize

A silver lining from that story: the rejection happened for the best, because we got to compare and see that our previous terms were actually awful.

For our Pre-Seed and extension rounds, we talked to ~30 angels. For our Seed round, we bumped that number and spoke to ~120 funds. Then two years later, we went back and spoke to almost 100 funds to raise our $20M Series A.

All these chats brought not only better terms (more information points prevented us from getting taken advantage of) but essential experience. Having a playbook is a great starting point, but you'll only truly learn to apply that playbook, and much more, by actually showing up time and time again.

The great news is that training spaces won't be a problem. Calendar density will give you all the exposure you'll need to improve… but only if you track your progress.

Approach the fundraising process with the scientific method: test different hypotheses and pitching styles, adjust your storytelling, and use every pitch as an opportunity to polish your skills. Leave each meeting understanding how you presented yourself and your startup, how your audience reacted, and what you should work on.

One task we got ourselves was optimizing for the right milestones to bring to the next fundraising stage:

• For our Seed, we worked to bring market size numbers + an MVP validated through recurring paying customers.
• For our Series A, we went for growth metrics and repeatability to show we could scale + a validated product-market fit.