Latin America is a hotbed of entrepreneurial and M&A activity these days, and there are often cross-border venture capital financings involving Silicon Valley investors in syndicate with investors across Latin America.
Andre Thiollier (Foley & Lardner LLP) and Leonardo Teixeira (Iporanga Ventures) spoke on this topic as part of the livestream for startup founders series hosted by 4thly and Foley and moderated by Bret Waters.
- The LatAm market has matured over the past 20 years and 2021 has seen the largest venture capital deployment in the region.
- 2022 continues to be a strong year for early stage investments, but capital for growth and late stage has become more expensive.
- The large majority of institutional investors will not put money directly into the operating companies and will ask for corporate structures in the US or offshore to be used in connection with their investments.
- Investors will also carefully analyze the potential overreach of US laws that may affect their investment strategies and how to deploy capital.
- Macro trends in LatAm vary by country as each has their own distinct culture, economy and political climate.
- There is very good talent pool of entrepreneurs and engineers coming from LatAm that is attracting Silicon Valley’s attention.
- In various cases, international funds rely on early-stage investors who are closer to the region before getting involved, which helps startups with financing costs.