How to scare off a VC?

So, you've found an investor that's willing to write you a check, huh???

We knew you were hot stuff, but you're looking like a call to the fire department right now 🔥🔥🔥 Whoop, whoop!

… But seriously, we might need to put out your fire a little 😅🚒

What are the terms and conditions for this potential investment?

If your business operates in LatAm and you're raising a juicy VC round, investors may need your company to be incorporated in a trusted jurisdiction.

What's that?

⚖️ It's legalese for a company setup where investors clearly understand all the basic legal implications to anticipate risks and liabilities. A structure that avoids unexpected financial and juridical obligations for them.

Simply put, a familiar face on the legal side.

And you know what's not a familiar face for international investors? A local operating company.

We know VCs are sharp as hell 🦈, but you can't ask them to know the laws and tax implications of every LatAm country they are active in.

What are you gonna do when you end up expanding to other countries? Hire legal counsel in each of them? Are you listening to yourself? 🫠

Now, we're not saying your cousin João is not a marvelous lawyer, but does he know how to advise LatAm startups on incorporation? Do you know good firms that can do this without demanding your soul in exchange?

Corporate law in most LatAm countries is not as robust as we'd like, and startups are already risky enough.

🎯 So please, we urge you to keep this in mind. VCs can and will rule out founders for their corporate structure, or at the very least make you jump through hoops to change yours.

Losing a deal is as simple as that.

You: I know where you're trying to go, Latitud 🙄 but I can't have a Cayman Sandwich yet. It's too heavy for a start.

Oh, trust us, we know 🙃. And we can make it lighter for you now.

No indigestion. No luxurious budget. No more spoilers until next week lol.

👉 While we finish cooking this, how familiar are you with startup incorporation in LatAm? Go check our complete guide on corporate structures and find the best model for your startup – ooor wait for next week :)

Fundraising recipes by Latitud Go 👩‍🍳

🥦 Recipe #1: Find out who's the best investor for you.

Just as VCs are doing due diligence on you and checking your corporate structure, you also must do due diligence on them. You know that, right?

Like who are YOU, Andreessen, and why should I give you MY percentage of the company? Huh? 🤨

Don't let the pressure of getting an investment offer stop you from finding out every dark secret relevant piece of information about that VC.

🍳 And how can you do that?

1. Research your VC: Stalk their Crunchbase page and Google their website for a start – or Bing them since we're trendy now.

2. Talk to other founders: To those who have received both a yes and a no from that venture capital firm.

And don't stay with the winners: go talk with the ones that are not doing so well too.

3. Ask deep questions: After 562 cold emails, you'll finally get your talk.

This is your moment to get their astrological chart turn the tables around. Take the meeting as a chance to ask them deep questions and check if they're a good fit for your startup.

"Founders don't generally do that because they're selling every time", says Latitud's Brian, so don't let this happen to you!

📌 Are you a Brazilian startup fundraising and need help to incorporate? Visit Latitud Go and check how we can make your life easier 😎

Visit Latitud Go!

To care is to rec 💙

Still didn't catch that corporate structure thing? Our in-house lawyer says these extra sources might help you out. 💁✨

👉 Legal Structures for Latin American Startups - LatamList

👉 Five things to know before starting a company in Latin America - Hustle Fund

👉 What is the best jurisdiction to incorporate a VC-backable LATAM-based startup? - Newlin Ventures

👉 Latin American entrepreneurs: to "flip" into a C-Corp or an LLC? - LAVCA

Hot News Ahoy! ⛵

👁️ Eyes in LatAm

Brazilian Facebook co-founder Eduardo Saverin – yes, Andrew Garfield 👀 – is set to invest in Latin America startups through B Capital Group, his venture capital firm that recently raised US$2.1B for its latest Growth Fund III and related funds.

👏 Promesas de Negocio

For the last 10 years, Forbes México has featured 30 companies in their Promesas de Negocios series. We’re thrilled to share that, this year, many of our community fellows were featured in this list 💙

Shoutout to our fellows Jesus Gomez, Mathis Renard, Jan Heinverta, Anahí Sosa Padilla, Katria Oviedo, Miguel Espinosa, and Alan Karpovsky. Huge congrats to the teams at Vioo, Perfekto, Jetz App and Mendel! 🎉

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-> Every time one of your friends subscribes to our Newsletter, a startup gets the right corporate structure and saves a lot of money ✨ So ask them to subscribe!

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