The Argentinean Ob...

The Argentinean Observatory of Venture Capital publishes research on Venture Capital Market in Argentina

This is an initiative of the Science and Technology Ventures Institute, a member of infoDev's Global Network of Business Incubators

Opportunities in the Argentinian venture capital market continue to grow. So far, investments have been made into tens of companies, helping to create hundreds of new jobs. However, in 2008, less than 10% of available venture capital funds have been invested. IECyT conducted research to better understand Argentinian venture capital market trends and industry sectors, as well as the motivations of venture capital agents, to help bridge the gap between supply and demand for venture capital in the country.

The Argentinean Observatory of Venture Capital (Observatorio Argentino de Capital Emprendedor) is an initiative of the Science and Technology Ventures Institute (IECyT), a member of infoDev's Global Network of Business Incubators. Created in 2003, the Observatory is a non-profit organization represented by a group of professionals, businessmen and researchers with substantial experience in entrepreneurship issues.

Gabriel Jacobsohn and Natalia L√≥pez, two researchers from the Observatory, recently carried out research on Venture Capital in Argentina. Research was conducted mainly through interviews with more than 80% of venture capital agents in the Argentinian market (13 out of 16). Key facts resulting from the research include:

  • In 2008, approx. USD 70 million in venture capital funds was available for investment, but less than 10% of this amount was invested.
  • Although European funds and funds belonging to Multilateral Agencies (mainly the Inter-American Development Bank) are available, venture capital funds were mobilized mostly from national sources. 
  • Capital availability depends on the phase of the enterprise: companies in their start-up phase attract most of the funds, followed by companies in their growth phase and those requiring seed funding.
  • The most attractive sectors for venture capital funds are software, computer sciences, media, entertainment, telecommunications, and biotechnology.
  • Only 30% of the interviewed venture capital agents would invest abroad, if they had a profitable proposal, although a majority of the agents are willing to invest in a company's internationalization efforts.
  • By late 2007, 8 of the interviewed venture capital agents had made investments worth USD 11.46 million in 30 Argentinian enterprises.
  • Since 2005, companies that received venture capital investments generated 877 new jobs.

Additional research findings (in Spanish) are presented in the attached report.

To access the Observatory's English-language vidoes and podcasts on issues such as the venture financing process, entrepreneurial skills, as well as managing the relationship between the venture capitalist and the entrepreneur, please visit the Observatory's website by clicking here.

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