Venture Capital (VC) in Latin America is still in its inception but has enormous potential. The benefits for VC-backed companies are evident in terms of performance and growth opportunities. According to an independent analysis in Latin America, VC-backed companies often double their size in a four to five-year period.
These companies are also engines of job creation, both directly in terms of their own employees, as well as stimulating growth and employment among their local suppliers. The majority of VC backed companies in Latin America are working to bring new and better products and services to Latin American markets, in doing so they create even more ripple effects among local suppliers and become important new sources of tax revenue for governments. VC also promotes social mobility and the formalization of companies, fosters a more equitable access to financing, and promotes social and environmental standards. VC, therefore, not only drives innovation and entrepreneurial growth but can also be an important catalyst for inclusive forms of economic development.