Download Entrepreneur’s Guide to Private Equity in Mexico

Author:
Jim Hallmark
Law and Business Review of the Americas
Mexico

Article:
Entrepreneur’s Guide to Private Equity in Mexico
Published in Law and Business Review of the Americas (Vol. 9) 11/2003

By:
Jim Hallmark
Luis Fernando Gonzalez Nieves
Santiago Pardo
David M. Hryck

Private equity financing offers a potential source of capital to the Mexican entrepreneur who has insufficient access to conventional sources of capital to finance his business operations. Many entrepreneurs, however, do not fully understand private equity financing or the process for obtaining it.

This article is divided into four sections. Section I provides entrepreneurs with a basic understanding of the fundamentals of private equity financing (i.e., what is it? What is the general process for obtaining it? What basic financial instruments are used to secure it? What are the major risks to those who provide it?). Section II focuses on key issues within the life of a private equity investment that entrepreneurs should consider. Section III discusses whether an entrepreneur should form a U. S. holding company to own his Mexican company to better attract private equity financing. Section IV offers some concluding thoughts about obtaining private equity in Mexico.