Metrics That Matter: What VCs Actually Evaluate in LATAM
Investors in Latin America are more disciplined than ever. The era of funding growth at all costs is over.
These are the key metrics that determine whether you get funded.
LTV/CAC Ratio. The minimum is 3:1. A ratio of 4:1 or higher is excellent for LATAM. This metric measures whether your customers are worth more than what you paid to acquire them.
CAC Payback Period. The target is 6 to 12 months for SMB SaaS in LATAM. If it takes longer than 18 months, your unit economics have a serious problem.
Net Revenue Retention (NRR). The target is above 100%. The best LATAM companies achieve between 105% and 115%.
Burn Multiple. The target is below 2x. This measures how much capital you burn to generate each dollar of net new ARR.
Gross Margin. The target is 65 to 75% for LATAM SaaS. A margin below 60% signals a pricing problem.
Rule of 40. Add your annual growth rate and your profit margin. The result should be 40 or higher.