The Three Business Models VCs in Brazil Can’t Stop Funding

Last week I posted a poll on my Instagram asking if I should record a solo episode breaking down VC fundraising for LATAM founders. The response was overwhelming — hundreds of you said yes.

That doesn't surprise me. Most Latin American founders are struggling with fundraising.

Not because their products suck. Not because their markets are too volatile. But because they're following the wrong playbook.

So I decided to dig deeper into major VC success stories — from Nubank to QuintoAndar to Creditas. What I found completely changed how I think about fundraising in LATAM.

The founder profiles that get backed here are dramatically different from Silicon Valley — except for that Stanford GSB degree, of course. The complexity of building in LATAM demands different skills, different networks, different thinking. Yet the scale of these markets absolutely deserves a proprietary playbook.

What I discovered explains:

• Why certain founders close a round in 30 days while others spend years getting rejected

• Why three business models dominate every major VC portfolio

• Why 2025 might be the biggest startup tailwind since 2012

Founders, this one's for you. Let's get into it.

THE FUND MATH YOU’RE UP AGAINST

First, let's be clear about what you're really selling.

VCs don't just invest in companies — they invest to make their fund economics work. Understand that math, and fundraising stops being guesswork.

At the core of VC economics is the power law: in every fund, one or two investments generate almost all the returns. VCs aren’t chasing “good” businesses — they’re hunting for the rare 50x moonshots that can return their entire fund and keep their LPs happy.

That means they're optimizing for three things:

Massive market potential — For a $300M fund targeting a 3x return, that's $900M+ in proceeds from just one or two deals. If they own 15% at exit, you're talking about a $6B+ outcome. That's why they hammer so hard on total addressable market — even highly profitable niche businesses rarely get there.

Extreme growth velocity — Venture returns depend on time as much as multiples. A $500M exit in 6 years can be better for their IRR than a $1B exit in 15 years. In venture math, time kills returns.

Defensibility — Without real moats, even the fastest growth can vanish the moment a better-funded competitor enters. Investors want to see barriers that make it hard to copy or displace you. A helpful lens here is Hamilton Helmer's 7 Powers framework, which breaks down the main sources of lasting advantage — from scale economies and network effects to switching costs, brand, cornered resources, process power, and counter-positioning.

The more clearly you can map your business to one or more of these, the more credible your long-term moat becomes.

If your pitch doesn't clearly check all three boxes — big market, rapid growth potential, and durable advantages — you're climbing uphill, no matter how strong your margins or how sustainable your business.

THE FOUNDER PROFILES THAT GET FUNDED

Here's where it gets interesting: even if your market is massive and your moat is rock-solid, VCs in Latin America aren't just underwriting the business — they're underwriting you.

I looked at the top-performing companies across Brazil's leading VC portfolios. The patterns are striking, and they diverge sharply from the typical Silicon Valley founder profile.

In the Valley, very few founders start with years in investment banking or top-tier consulting. In Brazil, those backgrounds dominate:

• ⅓ are ex-investment bankers — often from top global firms

• ⅓ are ex-McKinsey or BCG consultants — with years of experience solving complex operational and strategic problems before founding their startups

In emerging markets like Brazil, scaling a venture-backed business isn't just about product-market fit — it's about navigating complexity. Founders with investment banking or top consulting backgrounds come pre-loaded with four advantages VCs see as decisive:

• Capital-raising fluency — Able to articulate unit economics, growth levers, and risk with no learning curve on IRRs, TAM, or fund math

• Systems thinking — LATAM isn't plug-and-play. Payment systems, compliance rules, and logistics vary wildly by market. These founders are trained to design multi-country operational frameworks and execute where no playbook exists

• Network density — Personal access to tier-1 global investors, senior hires, and corporate partners from day one

• Clarity under pressure — Structured decision-making in high-stakes environments when macro conditions shift overnight

When a VC sees "ex-Goldman" or "ex-McKinsey" on a deck, they're not thinking "pedigree for pedigree's sake." They're pattern-matching to a skill set that has already produced multiple category leaders under the same constraints.

These backgrounds don't just influence who gets funded — they also shape what gets built.

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THE THREE MODELS VCs CAN’T STOP FUNDING

B2B SaaS, FinTech, and PropTech account for the bulk of LATAM's top VC wins.

It’s not a coincidence. B2B SaaS delivers the holy trinity of venture needs — recurring revenue that compounds, near-zero marginal costs, and sticky customer relationships. Fintech plays on almost infinite TAM — Brazil alone has ~60 million unbanked adults, strong regulatory tailwinds, and ubiquitous Pix adoption reaching 87% of adults. Unlike the U.S., where access to credit and working capital is relatively abundant, in Brazil it’s scarce enough that you can layer financial services on top of almost any large industry  — think Capim (SaaS + fintech for dentistry) or Mottu (motorbike rentals with embedded financing for delivery drivers). PropTech targets Latin America’s largest asset class, where processes are so outdated that digitization isn’t an upgrade — it’s a leap forward.

But the business model is only half the equation. Every top performer also went after markets with two non-negotiables:

✓ At least $10B in addressable opportunity

✓ A grotesque inefficiency technology could fix

Examples: Nubank tackled credit card interest rates exceeding 440% per year. QuintoAndar removed property-owning guarantors for rentals. Creditas provided secured loans in a market dominated by triple-digit interest rates.

When you combine a model that compounds with a market so broken it begs for a solution, you create the rare conditions where 50x outcomes become possible.

TIMING IS EVERYTHING

The last great vintage was 2012-2013:

• 3G coverage finally worked nationwide, making mobile-first business models viable

• Smartphone adoption crossed the tipping point where digital services could reach mass-market scale

• A rapidly expanding middle class unlocked new demand for credit, mobility, and e-commerce

• Venture capital inflows surged, giving founders the firepower to move fast

That stack made possible a wave of category-defining companies — Nubank, QuintoAndar, 99 — whose growth curves would have been impossible just a few years earlier.

Now, 2025 has its own stack — and it's just as transformative:

• Pix has made instant, free payments ubiquitous, removing one of the biggest frictions in online and offline commerce

• Open Finance is forcing incumbents to share customer data, enabling new entrants to underwrite and cross-sell with precision

• WhatsApp rails provide built-in distribution to virtually the entire population — 96%+ of Brazilian smartphone users — collapsing go-to-market barriers

• AI is cutting the cost and time of building, personalizing, and operating products, letting smaller teams move faster

If you align with these tailwinds early, you slash CAC, accelerate adoption curves, and expand your TAM before competition sets in — the exact conditions that map to fund math and make 50x outcomes plausible.

The next question: do you actually want them on your cap table?

BEFORE THEY WRITE THE CHECK, MAKE THEM EARN THE SEAT

Fundraising isn't just selling your company — it's also vetting who gets a seat in your boardroom for the next decade. The wrong investor can slow you down as much as the right one can accelerate you.

Most founders make a critical error when meeting with VCs—they focus solely on getting funded, treating investors like ATMs instead of potential long-term partners.

Think of fundraising like dating for marriage. You wouldn't propose after one dinner just because they have money. Yet that's essentially what most founders do—chase the biggest check without understanding who they're getting into bed with for the next 7-10 years.

VCs see hundreds of companies a year and collect institutional knowledge no single founder could match. But most founders ask surface-level questions and walk away with surface-level answers.

To truly assess a VC, go beyond polite curiosity:

"What's the biggest mistake you've seen companies in our space make?"

Strong answer: "We've seen companies get seduced by enterprise deals too early. They land one big client, think they've cracked the model, then burn 18 months trying to replicate it before realizing they needed to dominate SMB first."

Weak answer: "Companies often scale too quickly."

The most powerful question: "What would have to be true for you to write a check tomorrow?"

A thoughtful VC will give you a clear roadmap. A weak one will give you platitudes about revenue growth.

FUNDRAISING IS SALES

The truth most founders miss: fundraising is sales — the most important sale your company will ever make.

You'd never dump your product on random prospects without qualification, relationship-building, or follow-up. Yet when it's time to raise millions, founders forget everything they know about effective selling — they send their decks to 100 VCs and hope someone bites.

The founders who raise fastest and on the best terms run it like a sales process:

Qualify prospects — Study portfolio companies religiously. Look for patterns: check size, stage focus, market themes. If they just backed a direct competitor, they're not a prospect. Drill down on individual partners — what's their background?

Build relationships 6-12 months before you raise — Share quarterly updates with key metrics and milestones. The goal: become a known quantity. When you send that deck, you want them thinking "Oh, it's the team that's been crushing it" — not "Who are these people again?"

Create real urgency — Every VC has heard "We're raising $2M and closing in 30 days." Usually it's BS. But legitimate urgency works. Run a tight process: send decks to 15-20 qualified VCs within 48 hours, hold first meetings within two weeks, set firm deadlines. One interested VC is desperation; three creates leverage; five triggers a feeding frenzy.

Turn "no" into "not yet" — When they say "It's too early," dig deeper: "What would you need to see to get conviction?" Address concerns with data, analogies to successful companies, or strategic partnerships that de-risk the investment.

Develop thought leadership — When your LinkedIn post gets 1,000 likes or you speak at a conference, make sure target VCs see it. Build a systematic machine that keeps you visible between formal touchpoints.

BIG CHECKS FOLLOWS BIG MARKETS

Full disclosure—I'm not a huge fan of talking "exit" with VC-backed founders. I'd rather back founders building generational businesses. But understanding how exits happen and what drives premium value is essential for making smart design choices today.

IPOs are rare—most liquidity events come from strategic or private equity buyers. Understanding these dynamics helps you build stronger businesses with multiple paths to liquidity.

Who buys and what they pay for:

Global strategic buyers pay premium multiples:

• Networks & processors (Visa, Mastercard, Adyen) — pay for infrastructure, multi-geo rails, and mission-critical reliability

• Platforms & marketplaces (iFood, Uber, DiDi, Prosus/Naspers) — pay for regional distribution, liquidity, and market access

• PE roll-ups (Vista, Constellation, Thoma Bravo) — pay for durable recurring revenue, high NRR, low churn

Domestic strategics (banks, telcos, incumbents) pay for product modernization and market defense—but multiples are lower unless you bring step-change capability.

Rule of thumb: The wider your buyer set and the more global your fit, the higher the valuation tension.

Why multi-country businesses price higher:

• More bidders, less single-market risk

• Metrics compared to global leaders, not local peers

• Easier integration for buyers with existing distribution

• Scarcity of clean, compliant, multi-geo assets in LATAM

STACK THE ODDS IN YOUR FAVOR

If you're reading this thinking "I don't fit the mold"—no Goldman background, no Stanford MBA, not building in the holy trinity of business models—you're probably feeling frustrated.

Good. Channel that energy.

The patterns exist because they work—but patterns can be borrowed, not just inherited.

Here's how the founders who raise fastest and scale into category leaders stack the odds in their favor:

Backable profile — If you don't match a pattern VCs trust, borrow it. Bring on a co-founder, senior hire, or advisor who brings the credibility, network, or operational experience that VCs pattern-match to success.

Category fit — Understand why B2B SaaS, FinTech, and PropTech dominate portfolios—they map to fund math. If you're building elsewhere, your story needs to be exceptional enough to break the mold.

Market choice — Chase a $10B+ market with a grotesque inefficiency that technology can fix. "Could be better" isn't enough; aim for "actively broken." The bigger the pain, the bigger the opportunity.

Timing tailwinds — Align with infrastructure shifts that make adoption inevitable. Right now, that's Pix + Open Finance + WhatsApp rails + AI. Catch the wave before competition floods in.

Stack these four elements, and you're no longer hoping a VC will see your potential. You're presenting them with exactly what their fund math is built to bet on.

THE J CURVE HALL OF FAME

Since you made it this far, you might want to check out:

Last month’s most downloaded episode:

Last month’s most shared Newsletter: Latam’s volatility builds better operators— The counter-intuitive scaling philosophy that's making Brazilian companies more resilient than their Silicon Valley counterparts. 

Thanks for reading,

Olga 

 P.S. If this issue was valuable to you please share it with a founder who needs to hear it. Let’s build LATAM’s next tech leaders—together

🎙 The J Curve  is where LATAM's boldest founders & investors come to talk real strategy, opportunity and leadership.