Market turnover of US$171.6 million in April 2024, an increase of 78% compared to the same period last year (US$95.9 million)
Companies in the innovation sector have the possibility of receiving financing from investors to boost their growth. It’s a new market. If they are identified as promising, investments are made in exchange for equity participation. The movement occurs with expectations of large financial returns in the long term. This negotiation process is called venture capital.
Investors can be companies or individuals, who also act as mentors or advisors for business expansion. The manager of the Credit Access Center of CNI (National Confederation of Industry) in Pernambuco, Cézar Augusto Lins de Andradeexplains that the market is high risk.
Andrade explains that for a company to obtain investment, it is essential that it has a clear and structured business plan. During the negotiation process, the business model, growth potential, target market and management team are analyzed.
Venture capital funds in Brazil generated US$171.6 million in April 2024, an increase of 78% compared to the same period last year (US$95.9 million), according to Distrito, a data generation platform which integrates specialized consultancy and market intelligence.
Here are tips for getting venture capital:
- identify investors who have interest and experience in the company’s market to increase the chances of closing a successful partnership;
- have documented the results already obtained;
- present a competent and committed management team to execute the business plan.
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Difference between venture capital and financing
Andrade explains that venture capital stands out for its long-term strategic approach, while other types of financing, such as bank loans, for example, focus on immediate profitability.
Companies in sectors such as technology, healthcare, biotechnology and sustainable energy often attract the interest of venture capital investors due to their potential for growth and financial returns.
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