We have an exit problem

For most of the past decade, Latin America's venture ecosystem has obsessed over one question:

How do we get more capital into the region?

The answer was usually some combination of global funds, larger local vehicles, more institutional LPs, deeper late-stage markets and, inevitably, more unicorns. And for a while, it worked.

Capital poured into Latin American technology companies. Local funds multiplied. Founders raised rounds that would have been almost unimaginable a decade earlier. The region produced dozens of billion-dollar private companies and created a generation of employees, angels and early-stage investors holding stakes in businesses that had appreciated substantially.

But raising capital is only half the story.

Every funding cycle eventually has to answer a second, equally important question:

How does anyone actually get their money out?

That's the part Latin America still sucks at.

We have become significantly better at funding companies, but not nearly good enough at creating liquidity for the people who funded and built them.

As a result, a growing amount of value remains trapped inside private companies and aging venture funds, waiting for an IPO or acquisition that may take years to arrive—or may never arrive at all.

Venture capital is designed as a loop.

Limited partners invest in funds. Funds back companies. Companies grow. Investors eventually sell their stakes, ideally via IPO — and Silicon Valley's entire liquidity model rests on the assumption of successful IPOs for a chosen few from the portfolio. The proceeds are distributed back to LPs, which then commit capital to new funds.

The industry compounds because capital circulates.

In Latin America, that's easier said than done. The handful of companies that did make it to US markets are genuinely world-class — Nubank, MercadoLibre. But two names don't make a liquidity market. And in my view both are still underpriced, which tells you how inefficiently this region gets valued even at the finish line.

In other words, the IPO cannot be the only exit. The region needs to normalize partial liquidity earlier in a company's life — not treat going public as the single legitimate endpoint fifteen years down the road.

Which brings me to the objection everyone raises.

Doesn't founder liquidity kill hunger?

Quite the opposite, honestly. Look at what the alternative actually does. You take a founder, you put nearly their entire net worth into one illiquid company, and you ask them to hold it for ten or fifteen years. You don't get a hungrier founder. You get a more desperate one. Someone who takes the early acquisition offer because they've never been able to buy a house or send their kids to a good school. Someone who can't say no.

A controlled secondary does the opposite. It lets a founder take enough off the table to stop being afraid — which is exactly what lets them keep swinging. It reduces personal concentration. It lets them reject a premature exit. It extends the company's time horizon.

I'd go further. Done right, secondaries raise founder ambition — and with it, the odds of the big IPO or acquisition everyone actually wants.

The same is true for employees. Stock options cannot function as a credible talent-retention tool if employees begin to believe they are lottery tickets with no realistic settlement date. Periodic liquidity can make equity more valuable precisely because it demonstrates that ownership is real.

And for early investors, selling part of a successful position can be economically rational without reflecting diminished conviction. A seed fund may have generated a 30-times return on paper but need distributions to support its own LPs and raise its next vehicle. The incoming investor may be entirely comfortable underwriting a lower return over a longer period.

One shareholder needs liquidity. Another wants exposure. A transaction allows both to be right.

We tell Latin American founders to think in decades, then design their ownership so they get nothing unless the company sells. You can't have both.

And then there's the perception problem. Secondaries still carry a whiff of the distressed asset — as if anyone selling early must be jumping a sinking ship.

That view is so outdated.

Globally, secondaries are already becoming a fundamental part of how private capital works.

The global secondary market reached a record $233 billion in transaction volume in 2025, up 53% from $152 billion in 2024. LP-led transactions — investors selling interests in private funds — accounted for roughly $117 billion. GP-led transactions — managers restructuring or extending ownership of portfolio assets — made up another $116 billion.

This is a real change in the architecture of private markets.

Private companies are staying private longer. Funds are holding assets past their original timelines. IPO and acquisition windows open and close unpredictably. LPs can no longer build portfolios on the assumption that every strong asset finds a conventional exit within ten years.

Secondaries have become the release valve. In the US, large private tech companies increasingly run tender offers that let employees and early shareholders sell a controlled portion of their stock. I've received a few of these myself, for some of my US portfolio.

These transactions were once read as a sign that something had gone wrong. Increasingly, they're a sign that private markets are maturing.

Latin America is moving in the same direction — just from a much earlier starting point.

We've seen some big secondaries transactions in Brazil over the last couple of years, spearheaded by Warburg Pincus. They put $125M into Contabilizei almost entirely in secondaries — cashing out Kaszek completely, with Point72, Quona, IFC and Quadrant selling down. Then Jusbrasil, an $86M Series D that let earlier backers take money off the table. In VOLL, the corporate travel platform, they bought a controlling stake from Localiza. From what I hear, that team at Warburg is as bullish on the secondaries strategy as anyone in the region.

Then there's Omie. Last September, Partners Group — the Swiss private-markets giant with $170B AUM — led a $160 million round, the largest in Brazil all year, almost entirely in secondaries, cashing out Astella and the likes of SoftBank. And for the ones who were there at the very beginning, the return ran into the hundreds of times their money. Quite impressive.

The opportunity is not simply "buying at a discount"

Of course, the seductive secondaries pitch is that you can buy excellent companies below their last-round valuation.

Sometimes that's true. But a discount is not automatically an opportunity.

A company that last raised at $1 billion and now trades at $600 million may be dramatically undervalued. It may also still be worth $300 million. The challenge is telling a liquidity discount apart from a quality discount.

That's unusually hard in private markets, where financial information is limited, share classes carry different rights, and the last observable price may be several years old.

The seller usually knows more about the company than the buyer. Transfer restrictions can block a deal from closing. Rights of first refusal may let the company or existing investors step in and replace the buyer. Common shares sold by an employee may not deserve the same price as preferred shares held by an institution.

LatAm adds another layer: currency risk, political volatility, smaller transaction sizes, cross-border legal structures and relatively limited comparable data.

And then there's adverse selection. Why does this particular shareholder want to sell?

The answer may be completely benign — the employee left, the fund reached the end of its life, an LP changed its allocation. But you can't just assume it.

This is why secondaries are not easy money. The market rewards access, patience, underwriting discipline and the ability to navigate messy cap tables. It does not reward investors seduced by a big number printed next to the word "discount."

An ecosystem cannot survive on paper returns

For years, Latin American venture capital has celebrated capital raised, valuation milestones and the number of new unicorns.

Great traction. But it's not the final score.

The final score is cash returned.

Without distributions, LPs get reluctant to commit to new funds. Without liquidity, early investors can't recycle capital into new founders. Without a credible path to realizing equity, employees discount their options. Without partial liquidity, founders face pressure to sell companies just to turn years of work into personal financial security.

An ecosystem where everybody is rich on paper and nobody receives cash is not compounding.

It is accumulating promises.

Secondaries cannot replace IPOs. They can't rescue weak companies or manufacture real returns. They can't solve the region's shortage of strategic acquirers or create public-market demand for tech stocks.

But they can make the long journey between a company's first institutional round and its eventual exit far more functional.

They can give an angel a return without forcing the founder to sell the company. They can give a seed fund distributions without demanding a late-stage investor buy the whole business. They can let one LP leave while another chooses to stay.

And they can give a great company something worth even more than new money: more time.

Latin America spent the last decade learning how to finance companies. The next stage is learning how to finance ownership itself.

1.⁠ ⁠The biggest creators think like founders.

Creators used to optimize for views, sponsorships and ad revenue. Today’s biggest creators optimize for customer acquisition cost, lifetime value and expansion opportunities. Their videos don’t exist to make money—they exist to acquire customers for businesses with much larger upside.

2.⁠ ⁠AI made the “main piece of content” obsolete.

A podcast isn’t the final product anymore. It’s raw material. One conversation can become dozens of high-quality assets across every platform. In the AI era, the scarce resource isn’t content production. It’s having ideas worth distributing.

3.⁠ ⁠Distribution is becoming one of the most valuable assets in business.

As AI makes creating products and content dramatically cheaper, attention becomes harder to earn. Companies with direct distribution won’t just market more efficiently—they’ll launch products faster, recruit better talent and expand into entirely new businesses.

4.⁠ ⁠The question every creator should ask has changed.

Stop asking, “How do I create better content?” Instead ask: “What company becomes possible because people choose to follow the way I think?” In a world where AI makes creation abundant, unique judgment and distribution become the foundations of enduring businesses.

Here's a short snippet from the episode :

CloudWalk might be the most mature “Series C startup” nobody outside Brazil talks about.

Its AI infrastructure serves 7M monthly users across Brazil and the US, processes 60 billion tokens a day, and supports a $1.7B annualized revenue run rate — with $322M in annualized pre-tax profit. Its US product, JIM.com, is already live with merchants across the country. CloudWalk’s last disclosed round was a $150M Series C. In 2021. Roughly 720 human employees. This doesn’t look like a payments startup anymore. It looks like a bank-scale AI company still wearing a Series C label.

VTEX doubled operating profit and free cash flow while cutting headcount 13%.

It now powers $5.1 billion of commerce a quarter across 44 countries. Q1 GMV grew 17% in dollars, operating profit doubled to $10.6M, free cash flow doubled to $13.3M. The customer list: Carrefour, Whirlpool, Colgate, Stanley Black & Decker. And the stock is still about 87% below its 2021 peak.

Telepatía launched in July 2025. Less than a year later, its clinical AI is deployed across 25+ hospital systems reaching 14 million patients.

Then it raised a $33M Series A from a16z. It’s live in Brazil, Colombia and Mexico. LatAm may leapfrog US healthcare software precisely because it has less legacy software to protect. Not global yet — but the speed of multi-country deployment makes it one of the best candidates to get there.

CI&T is proof AI hasn’t killed every IT-services company.

Brazil’s CI&T just posted its sixth straight quarter of double-digit organic growth. Revenue up 23%, with Latin America leading at 33%, and 20% of new sales already run on AI-based pricing models. It serves 100+ large-enterprise clients across multiple countries. The stock is still 86% below its all-time high.

Hotmart did more than $10B in content sales across 188 countries — while cutting 10% of staff.

The Belo Horizonte company is reallocating toward faster global expansion. That’s either serious operating discipline, or private-market growth reality arriving late. Hotmart reports 200,000 active creators and a presence in seven countries.

dLocal now processes more money in a single day than it did in its entire first year.

Uruguay’s invisible global infrastructure company processed $14.1B in Q1, up 73%, across 60+ emerging markets. Trailing-twelve-month volume passed $47B; the platform serves 760+ enterprise merchants and reaches markets holding roughly 70% of the world’s population. Local-to-local volume doubled year over year. Less a LatAm payments company than the payments operating system of the Global South.

The J Curve has reached the point where we need another builder.

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Thanks for reading,

Olga 

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