The J Curve Insider: How Debt Became a Strategic Advantage in Brazil’s Startup Playbook

Debt in Brazil has always carried a heavy burden. Hyperinflation and financial crises turned it into a symbol of failure rather than growth. Contrast that with the US, where venture debt is a mature asset class—and a well-established part of the founder’s toolkit.

That’s where Namari Capital stepped in. Since 2019, Namari has quietly worked to integrate venture debt into Brazil’s startup ecosystem—educating founders, navigating legal complexities, and demonstrating that debt can be a valuable growth tool rather than a financial burden. Gabriela Gonçalves, Managing Partner at Namari, has seen the evolution firsthand, watching as venture debt transitioned from a little-known concept to a considered strategy for founders seeking to scale responsibly.

In this Insider, Gabriela discusses what it takes to develop venture debt in Brazil—from education and market-building to the importance of local expertise and financial literacy.

Let’s get into it.

THE US VS. BRAZIL: TWO WORLDS OF VENTURE DEBT

Olga Maslikhova: Let’s talk about structure. How does venture debt in Brazil differ from the US model?
Gabriela Gonçalves: In the US, you have 40+ years of venture debt history. The standard structure is “lien on all assets”—you collateralize everything under one umbrella. In Brazil, that’s impossible. The legal system here requires us to break down every single collateral individually. Each one needs its own paperwork, registration, and fees. It’s a fragmented, time-consuming process.

OM: Does that make you more selective about the companies you back?
GG: Absolutely. We can’t just rely on collateral. We have to really understand the business fundamentals. And because of the local regulatory landscape, we also have to build a lot of trust with founders. Debt is still new here—it’s as much about education and relationship-building as it is about legal structures.

THE NAMARI CAPITAL PLAYBOOK

OM: So how do you evaluate which companies are a good fit?
GG: We assess companies through three lenses:

• Equity Lens: We look at the company like a late-stage VC—founder quality, execution track record, growth trajectory, who’s on the cap table. It’s crucial that the business has product-market fit and a clear path to growth.

• Debt Fundamentals: Can we structure proper collateral under Brazilian law? Does the company have stable unit economics? Can it generate cash flow to pay us back if equity markets tighten? We have to think about downside risk—venture debt can’t rely on portfolio theory like equity.

• Exit Options: If the company doesn’t raise equity, is there an M&A market that could get us repaid? We have to think like an M&A banker, because, unlike VCs who can absorb losses, defaults in debt are catastrophic.

OM: What are your non-negotiables in the metrics?
GG: For SaaS, we look for gross margins around 60% or higher. Churn has to be predictable—if you’re a B2B SaaS with 50 clients, churn above 5% annually is a red flag. EBITDA matters—real EBITDA, not adjusted with fancy accounting. We also consider who’s on the cap table: having a strong VC partner is a big plus because they bring governance and potential support in tough times.

OM: Which sectors are best suited for venture debt?
GG: Anything with recurring revenue—SaaS, B2B, enterprise services. But with today’s market shift, we’re also seeing more efficient, EBITDA-positive companies across different sectors. It’s less about the label and more about the fundamentals.

THE SHIFT IN FOUNDER MINDSET

OM: You mentioned earlier that founders’ mindsets have shifted since the 2023 equity crunch. How has that changed your conversations?
GG: Before 2023, the market was all about growth at any cost—companies burned cash to chase scale. But when equity dried up, founders had to get disciplined fast. Now, we’re seeing a new generation of companies that are operationally efficient, with strong unit economics and a clear path to breakeven. That shift makes them ideal candidates for venture debt—because they’re not relying on constant equity infusions to survive.

OM: How should founders think about the trade-offs between debt and equity?
GG: Debt lets you retain control. With equity, you’re giving away ownership, voting rights, and board seats. That’s fine if you’re bringing in the right partners, but sometimes founders want to avoid dilution. Venture debt is non-dilutive—it lets you fund growth without giving up more of your company. But it’s not a silver bullet; you have to understand the risks and have a plan to repay it.

WHEN TO USE VENTURE DEBT—AND WHEN NOT TO

OM: When should founders consider venture debt—and when should they avoid it?
GG: Venture debt makes sense when you’ve proven product-market fit and want to extend your runway to hit a milestone—like a new product or market expansion—before raising equity. It’s a bridge to growth, not a Band-Aid for companies that haven’t figured out their model. Founders who think debt is a substitute for proving their business model will get burned.

OM: And what’s the biggest mistake you see founders make?
GG: Taking on debt without understanding how it works. You need to know your numbers—gross margins, churn, EBITDA—and what happens if equity doesn’t come back as fast as you’d hoped. Financial literacy is non-negotiable. Founders can’t just leave that to their CFO.

THE 2025 LANDSCAPE

OM: What are the biggest opportunities you see in the current market?
GG: The most disciplined companies—those that invested in efficiency over the past two years—are going to stand out. When the equity market rebounds, they’ll be in the best position to raise at good valuations. Venture debt is the tool that helps them get there—giving them the time and runway to prove their numbers and build trust with investors.

OM: What are the challenges?
GG: The fact that many local VCs are still struggling to raise new funds. There’s a lot of dry powder in older funds, but two or three years down the line, liquidity might tighten again. That means we all have to think about building sustainable businesses—not just chasing the next big round.

TAKEAWAYS

✓ Venture debt is a bridge to growth, not a lifeline for broken models.

✓ Founders must understand their numbers—gross margins, churn, EBITDA—before taking on debt.

✓ Local expertise is critical: Brazil’s legal framework requires precision.

✓ A well-timed debt raise can strengthen a founder’s negotiating position in the next equity round—turning capital into a strategic advantage.

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