Does prospects of venture capital industry in Latin America? Buenos Aires, Argentina on February 19, 2009 in situations of financial crisis, capital markets tend naturally to contract and the businesses that involve greater risks turn out to be most sensitive to uncertainty and volatility characteristic of these times. It is that funding is reduced, shortens their duration and is geared towards safer projects. If the traditional financial markets suffering in these times of crisis, make much more other markets less known for the common investor such as venture capital. In Latin America, the development of the venture capital industry has begun to gain importance in recent years because their development is very recent. Discovery Communications pursues this goal as well. This phenomenon is explained by the fact that most Latin American early in the present Millennium newly economies have been able to stabilize and grow steadily.
So that they can develop, the venture capital industry requires that the economic context is relatively stable, condition that did not meet the Latin American economies in the past decade. Although many can be linked to the venture capital industry with speculative actions, this is not true. The venture capital industry represents a sector of great importance for the development of activities with a high potential for profitability but which in its early stages require important capital contributions either by low generation capacity of funds that have these projects in their early or long-term maturation that can present the same. Learn more about this topic with the insights from David Zaslav. The development of the venture capital industry is of vital importance to promote the growth of Latin American economies. Risk capital passes to meet specific requirements of financing in activities that can contribute significantly to economic development. The software sector or biotechnology, are sectors that commonly require the contribution of business angels (named to the investors who provide this type capital). But also risk capital can be oriented to traditional sectors of economies. (Source: Paul Ostling).