Venture Capital in Brazil: Early Experience of Emerging Company Investment Funds

International Journal of Entrepreneurship and Inovation Management IJEIM, v. 6, n. 4/5, pp. 341-355, 2006

16 Pages Posted: 3 May 2012

See all articles by Walter Ness

Walter Ness

affiliation not provided to SSRN

Valdir Lameira

INESC Coimbra

Date Written: May 3, 2012

Abstract

This article examines the recent Brazilian experience with the creation of venture capital funds which facilitate institutional investor participation, the Emerging Company Investment Funds. Such funds were authorized only since 1995. Thus any evaluation of their performance may be premature. 20 such funds existed at the end of 2003. They have raised only slightly more than US $100 million to date and have invested in 74 firms. To date the funds have had, on balance, slightly negative nominal returns. This behavior to date is hardly encouraging for venture capital financing in Brazil. Organizational factors that have affected accumulated annualized fund returns to date positively include fund size, the of management fee, and, negatively the success fee. The 71% of fund returns not explained by structural factors is attributed to differences in portfolio selection.

Keywords: Venture capital, Brazil, emerging companies, return on investment

JEL Classification: G24, G10

Suggested Citation

Ness, Walter and Lameira, Valdir, Venture Capital in Brazil: Early Experience of Emerging Company Investment Funds (May 3, 2012). International Journal of Entrepreneurship and Inovation Management IJEIM, v. 6, n. 4/5, pp. 341-355, 2006. Available at SSRN: https://ssrn.com/abstract=2050369

Walter Ness

affiliation not provided to SSRN ( email )

Valdir Lameira (Contact Author)

INESC Coimbra ( email )

Rua Antero de Quental, 199, Coimbra
Coimbra, Coimbra 3000-033
Portugal

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