Until now, Brazilian entrepreneurs did not know what venture capital meant. High interest rates and heavy bureaucracy were burdens preventing VC. But now, all eyes are over Brazil. Recent article in Times Magazine available at Yahoo Finance praises VC in tech companies.
“Macro reasons” to boost VC
Brazil is expected to grow by 7.1% this year and soar throughout the decade. A confluence of factors will contribute to growth: abundant natural resources, stable government policies, a sophisticated banking sector, a rapidly growing middle class that now comprises about half the population of 190 million and a surge in real estate and infrastructure development to prepare for Brazil’s hosting the 2014 FIFA World Cup and the 2016 Summer Olympics, says Time Magazine.
As part of its grand plan, the government is investing heavily in programs that spark homegrown innovation around these key industries. These initiatives – from venture forums to R&D grants – are led by the Financing Agency for Projects and Studies (FINEP), the innovation arm of the Ministry of Science and Technology. “Our country invests 1% of GDP in R&D and leads the region in entrepreneurship,” explains FINEP‘s Eduardo Sette Camara. “Now 15 out of 100 residents are involved in a start-up.”