Fostering Innovation and Entrepreneurship in Brazil Through Private Equity and Venture Capital Public Policies

Abstract

It is well documented the positive impact of the Private Equity and Venture Capital (PE/VC) industry on the creation and development of highly successful innovative companies in a few countries, mainly in the United States. PE/VC firms provide not only capital to startups and small and medium enterprises (SMEs) that usually have financing gap, especially in emerging markets, but also strategic resources that enable these enterprises to commercialize innovation. As consequence, government incentive and nurture of local PE/VC industries would be expected in emerging economies due to innovation"s importance to economic growth.

Toward Convergence? The Brazilian Stock Market Concentration and the Role of Private Equity in its Diversification

“…I conducted an empirical research based on public available data about the Brazilian GDP and the local stock market, in addition to the information about the Brazilian PE/VC portfolio companies on Ramalho (2010). I used the official and public available information for GDP on the Institute for Applied Economic Research (IPEA) public database, IPEADATA.…”

“…The Brazilian GDP is divided in 3 groups that totalize 12 industries. For the information about the PE/VC portfolio companies in Brazil in 2008 I used the information provided by Ramalho and Furtado (2008) and Ramalho (2010) which presents a broader industry classification than the one from the GDP. As consequence, I expanded the analysis and comparison between the PE/VC and the stock market as I reclassified the IBOVESPA and BM&FBovespa industries using the PE/VC classification available (i.e.…”

“…Table 3). Ramalho (2010) In addition, I categorized the IPOs as PE/VC-backed or non-PE/VC backed in order to analyze if any the transformation occurred in the Brazilian stock exchange from 2004 to 2009, especially considering the industries breakdown. With these conditions, exclusions and adjustments, first I compared the GDP, IBOVESPA and BM&FBovespa industry breakdown evolution based on the GDP industry classification.…”

“…In addition, according to Martin, Sunley and Turner (2002) AIM in UK (1995), Nouveau Marché in France (1996), Neuer Markt in Germany (1997) and Nuovo Mercato in Spain (1999 were the exit routes for PE/VC-backed companies in Europe in the 90's. According to Ramalho (2010), BM&FBovespa was the exit route for PE/VC-backed companies in Brazil from 2004 to 2008.…”

O papel certificador dos fundos de private equity e venture capital na qualidade das empresas estreantes na BM&FBovespa

“…Cabe destacar a importância das políticas institucionais no processo de captação de recursos LERNER, 2001a;RIBEIRO, 2005;RAMALHO, 2010 25 O método venture capital considera as incertezas e fluxos de caixa negativos presente nos investimentos de PE/VC. Tal método precifica a empresa-alvo em determinado momento futuro, por meio de múltiplos (avaliação relativa) considerando que a empresa apresentará fluxos de caixa positivos.…”