LAVCA 2008 Guide to VC/PE Term Sheets in Brazil
05/20/2008
Author:
Latin American Venture Capital Association
United States
www.lavca.org | Categories:
|
Article:
Brazil is one of world’s leading emerging economies on a clear path towards investment grade status in a few years. In that scenario, venture capital (VC) and private equity (PE) are investment vehicles with an especially appealing risk/return profile and potential for substantial positive impact on the Brazilian economy – in funding for company growth, increase in tax revenues, and job creation. VC and PE are engines able to transform intellectual property and entrepreneurial drive into economic wealth.
VC/PE are well-established avenues of financing for companies, primarily in the earlier stages of their lives. No two transactions will have the same commercial terms throughout, but the ‘structure’ of different terms will often be very similar.
The aim of this Guide is to:
- present an outline of how deals are structured;
- illustrate terms and conditions typically used in a term sheet;
- analyze the investment process in general; and
- provide basic knowledge, before searching for investors, for those who are not totally familiar with the VC/PE investment process.
We hope that the overall framework here presented will assist those who are trying to raise capital as well as contribute to understanding of the commercial implications of offered terms. This in turn should expedite the negotiation of term sheets and completion of the investment process.
The
Guide to Private Equity and Venture Capital Term Sheets in Brazil is now available in both English and Portuguese language versions. The Brazilian Guide includes references to local legal structures and practices