Impact of Early Stage Equity Funds in Latin America
201 Pages Posted: 15 May 2016 Last revised: 6 Aug 2016
Date Written: April 21, 2016
This report contains the findings of research commissioned by the Multilateral Investment Fund (MIF), a member of the Inter-American Development Bank (IDB) Group, to study the effectiveness of three recent venture capital fund investments in Latin America. The profiled funds, Vox Impact Investing Fund I, a Brazilian impact investment fund headquartered in São Paulo; Progresa, a classic VC fund located in Medellín, Colombia and focused on healthcare and technology companies; and NXTP Labs, a LatAm regional seed fund managed by an investment firm that runs an accelerator modeled on Silicon Valley’s Y Combinator, serve as case studies to explore the direct and indirect impacts of the MIF’s investments on the portfolio companies and the wider communities and region in which they operate. The researchers found evidence that the MIF’s investments in the three funds were effective along several dimensions, such as providing risk capital in credit-constrained environments, arranging beneficial networking opportunities and business training, and supporting the region’s innovation. Most notably, the MIF’s funding and engagement markedly improved the VC ecosystems in which the funds operated.
Keywords: Venture Capital, Latin America, MIF, Multilateral Investment Fund, Inter-American Development Bank, IDB, Vox Capital, Progresa, Promotora, NXTP Labs, Accelerator, Impact, Effectiveness
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