Challenges of Venture Capital Managers to Invest in Biotech Companies in Brazil

Venture capital is an important source of fundraising for technology based-firms by providing temporary financial and management support in exchanges for equity. In Brazil, the venture capital market is under explored compared to mature ecosystems, resulting in restriction of risk investments. The contribution of this research is the better understanding of the difficulties of the relation between venture capital managers and entrepreneurs of biotech companies in Brazil. This can help to improve the relationship between these ones and, consequently, to benefit the future development of the biotech sector in habitats like the one studied. The method includes a collection of primary data through interviews with venture capital managers. It was concluded that the difficulties are present in the venture capital activities of fundraising and investments, that are influenced by the limited culture of venture capital investments in Brazil and the economic variables, as the interest rate, by its impact in the investors cost of capital. Also, was identified that, among several criteria investigated, the team characteristics was the one of greater value for most of the venture capital fund managers analyzed.