September 30, 2006 – Brazilian entrepreneurs and fund managers are first to benefit from what promises to be a series of regional guides impacting the sophistication of Latin America’s private equity and venture capital (PE/VC) industry.
The legal committee of the Latin American Venture Capital Association (LAVCA), in partnership with the Associação Brasileira de Private Equity e Venture Capital (ABVCAP), has launched a Guide to Venture Capital and Private Equity Terms Sheets in Brazil. The project was spearheaded by Intel Capital Latin America with additional support provided by Marval, O’Farrell & Mairal, Pinheiro Neto Advogados, and the Inter American Development Bank (IDB).
“This guide helps to create an environment which supports private equity and venture capital investments in Brazil by providing a benchmark of current terms and conditions to entrepreneurs,” said committee project leader Carolina Strobel, Senior Attorney with Intel Capital Latin America.
“A detailed analysis, based on Brazilian legislation as well on local market trends for each of the terms, is very helpful to investors interested in initiating activities in Brazil,” she said.
The aim of this guide is to present an outline of how deals are structured; illustrate the terms and conditions typically used in a term sheet; analyze the investment process in general; and provide basic knowledge for capital seekers who are not totally familiar with the PE/VC investment process.
In fact, the document provides a detailed guide for entrepreneurs seeking PE/VC financing. It covers topics ranging from “12 Steps Before Talking to Investors” to the investment process itself. Investment documents are explained, term sheet terms and conditions are defined, a glossary of PE/VC terms is provided and a sample Series A term sheet is included.
“Entrepreneurship plays a key role in economic development,” said Ms. Strobel. “PE/VC investments play a significant part in helping to fund companies and support local job creation and intellectual property.”
LAVCA’s guide was adapted to the Brazilian market from a template provided by the British Venture Capital Association (BVCA) and is available both in English and Portuguese. LAVCA plans to develop similar initiatives to support PE/VC investment in countries that may include Mexico, Argentina and Chile.
LAVCA’s “Guide to Private Equity and Venture Capital Term Sheets in Brazil” is currently available for download at www.lavca.org and www.abvcap.com.br. For more information please contact:
Ramona DeNies
Research Director
Latin American Venture Capital Association (LAVCA)
1 (503) 239-7449 Pacific