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Private Equity and Venture Capital in an Emerging Economy: Evidence from Brazil

14 Pages Posted: 21 Jul 2006  

Leonardo L. Ribeiro

Center For Private Equity and Venture Capital Research at Fundacao Getulio Vargas (GVcepe)

Antonio Gledson De Carvalho

Fundacao Getulio Vargas School of Business at Sao Paulo

Claudio V. Furtado

FGV Business School

Date Written: June 2006

Abstract

This article, based on the Brazilian experience, examines how Private Equity and Venture Capital (PE/VC) adapts to an emerging economy. Our dataset is based on two extensive questionnaires answered by each of the 65 PE/VC organizations with offices in Brazil. The results reveal that a lack of infrastructure and security create investment opportunities. However, institutional idiosyncrasies represent a major barrier and force PE/VC - a U.S. investment model - to adapt by investing in different stages of business development, avoiding LBOs, taking a generalist industry approach, geographically concentrating in the financial cluster and relying on arbitration for dispute resolution.

Keywords: venture capital, private equity, institutional economics

JEL Classification: G24, N26, O16, D23

Suggested Citation

Ribeiro, Leonardo L. and De Carvalho, Antonio Gledson and Furtado, Claudio V., Private Equity and Venture Capital in an Emerging Economy: Evidence from Brazil (June 2006). Available at SSRN: https://ssrn.com/abstract=912523 or http://dx.doi.org/10.2139/ssrn.912523

Leonardo Ribeiro (Contact Author)

Center For Private Equity and Venture Capital Research at Fundacao Getulio Vargas (GVcepe) ( email )

Rua Itapeva, 432
8th floor
Sao Paulo, Sao Paulo 01313-902
Brazil
+55 (11) 3281-3459 (Phone)

HOME PAGE: http://www.cepe.fgvsp.br

Antonio Gledson De Carvalho

Fundacao Getulio Vargas School of Business at Sao Paulo ( email )

R. Itapeva, 474 - 7o. andar
Sao Paulo 01313-902
Brazil
+5511 3281-7767 (Phone)

Claudio Furtado

FGV Business School ( email )

R. Dr. Neto de Araujo 320 cj 1307
Rio de Janeiro, Rio de Janeiro 22250-900
Brazil

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