Hi! Thanks for this very interesting question.
There is a lot of news out there about venture capitalists in the
countries you have mentioned. I will try first to provide you with the
development of the VCs mentality in the different countries at
different times as possible so as to get a better idea how the VCs
mentality developed from the dotcom boom up to its current downturn
situation.
Among the countries Chile, Brazil and Argentina there seems to be a
consensus among journalists to group the news for VCs in Latin America
as a whole. Please take note of the dates.
In the days of the dotcom frenzy VCs were very hot about these Latin
American Countries. But after a year later the mood became one of
caution.
“VCs are landing hot investments in Latin America” by Karie Atkinson
June 15, 2000
http://www.redherring.com/vc/2000/0615/vc-latin061500.html
“A New Breed of Venture Capitalist Scouts Latin America” New York
Times; New York, Dec 16, 1999, Simon Romero
http://www.lead.org/lead/training/international/brazil/2000/papers/capitalistscouts.htm
In these tough times for Internet companies VCs now begin to be
cautious in Latin America internet investments.
“Venture Capital & e-Commerce in Latin America” May 2001
http://www.iadb.org/ict4dev/pdf/VCMay2001note.pdf
“The Internet Party Didn't Last Long (int'l edition)
Funding is drying up for Latin America's Net startups”
http://www.businessweek.com/2000/00_48/b3709205.htm
I will now present different news stories for VCs in Chile, Argentina
and Brazil.
-------------
Chile
In Chile there has been a difficulty in embracing venture capitalism
within the country since business per se do not welcome the intangible
just like the Internet.
“According to Eduardo Bitran, general manager of Fundacion Chile,
‘Given that Internet and intangible elements are essential for the new
economy, we have to develop certain capacities and dynamics within the
country that are not really structured. Normally, Chile’s financial
sectors do not finance the intangible. Still, Chile’s economy is
basically pushed by the traditional natural resources sectors that
have not been involved in added value initiatives.’ Bitran added with
concern, “It is worrisome how in Chile, we have not developed capital
markets that generate seed capital, venture capital and the conditions
needed for developing all types of opportunities.”
Financing the new economy
http://www.internationalspecialreports.com/archives/00/chile/13.html
---------------
Brazil
In a Brazilian Electronic Commerce Brief dated June 8, 2000, a fund
was launched in Brazil to finance internet companies. This naturally
was brought about by the optimistic mood in the high-tech industry.
“The Venezuelan telecommunication group CISNEROS is launching a fund
in Brazil,
Eccelera, to finance Internet tech companies who will provide services
to traditional companies for entering the Internet economy. The Fund’s
initial capital is set at $40 million, but Eccelera hopes to attract
new investment by banks and institutional investors to reach $500
million. Grupo Votoratim, a diversified Brazilian Group, will invest
$300 million for high tech start-ups through its VC subsidiary, VV
Capital.”
FINANCE: new VC funds for the new economy in Brazil
http://www.iadb.org/ict4dev/pdf/E-Commerce%20Brief%2005.pdf
--------------------
Argentina
The article “INTERNET: Rush to back new economy companies” by Richard
Lopez in 2000 says that 60 start-up internet companies raised $500m
from venture capitalists.
http://specials.ft.com/ln/ftsurveys/country/sc237f6.htm
----------------
India
In the middle of 2000, when optimism in the dotcom era was the norm,
Indian based VCs clamor for a global outlook in their business.
India-based venture capital funds should be allowed to invest globally
(September 13, 2000)
http://www.indiainfoline.com/nevi/inwi/mm30.html
As early as December of 2000, there was already an expression of
cautious optimism among VCs in India. There is some mention of US
Based companies at the end but generally the article is about Indian
based VCs.
NEWS-INDIA: Shakeout in Indian dotcoms forces VCs to change track
(Dec. 4, 2000)
http://www.apnic.net/mailing-lists/s-asia-it/archive/2000/12/msg00005.html
A study about the VC environment in India is discussed in this
article.
VC in India
http://www.vcline.com/india.htm
In a fairly new article dated July 9 of this year an Indian VC called
VIEW Group, with origins in Boston but now is in India, practices
entrepreneur-in-residence or (EIR) as a new type of venture
capitalism.
“Venture capitalists are back, but with a difference. They don’t have
big money to offer, but the promise of entrepreneurship is still
there. The new war cry: Just come on board if you want to be an
entrepreneur.
And for all your effort, they’re willing to pay you subsistence wages
while you research and develop an idea. Sanity returns after all, and
VCs call this new phenomenon entrepreneur-in-residence (EIR)."
"The EIR programme, as it is called, is one in which an in-house
entrepreneur researches an idea with the understanding that the VC
firm sponsoring him will eventually back it. VC firms pay EIRs a
stipend while they research markets and find an idea around which to
build a company."
"This reversal of the typical start-up process makes EIRs popular with
VCs in the current market climate, since they provide a proactive way
of funding companies. “
“In India, VIEW Group is the only venture capitalist firm that’s
following this practice diligently. With origins in Boston, the group
has an office in Mumbai since it has identified India as a core
market.”
from "VCs sing a new tune, EIR"
http://216.239.35.100/search?q=cache:J0RI5AjY3_cC:infotech.indiatimes.com/markets/mood/eir.htm+India+VCs+or+%22Venture+Capitalists%22&hl=en&ie=UTF-8
A list of VCs based in India and their addresses:
http://www.coolavenues.com/netprenuers/vc_address.htm
http://www.vcline.com/add.htm
The following links describes the regulatory framework of Venture
Capitalism in India.
Regulatory Framework
http://www.vcline.com/rules.htm
The VC Investment pattern presented here is a comparison between India
and other countries which have tremendous focus on IT related VC
investments:
VC Investment Pattern
http://www.vcline.com/invest.htm
------------------
Germany
In 1999 just like in other countries, German Venture Capitalists were
riding high on internet start-ups.
The following quote shows the investment numbers in the dotcom boom
for Germany.
“Venture capital became a common notion in the late 1980s, but a long
period of stagnation followed. In 1999, German venture capital firms
made new investments worth E2.81bn ($2.69bn) compared with E1.69bn in
1998.”
“Germany has become the largest venture capital market in continental
Europe, although it is much smaller than the UK and structurally
different.”
The article that discusses this phenomenon “GERMANY: Support for
start-ups with the accent on technology” is dated June 7, 2000.
http://specials.ft.com/ln/specials/spb266.htm
A general overview of the current VC situation in Germany shows that
such investors are now moving away from IT or internet start-ups and
are focusing their eyes on biotech companies.
“The sector is putting its faith in biotech companies. According to
Udo Hölker, CEO of the investment company Area5F, biotech companies
have surpassed IT companies taking over the top position among
start-up investments with a share of 25 percent.”
"The above quote was from “Wave of mergers for risk capitalists” of
the Financial Times Deutschland, 10/05/01 by Matthias Dezes
(http://www.venturepanel.de/pub/presse_1_engl.php)
Search terms used:
Internet VCs OR Venture Capitalists
Chile, Brazil, Argentina, India, Germany
I hope this would help you in your research. Please ask for a
clarification if you have a question or if you would need further
information.
Regards,
Easterangel-ga |
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