Aug 20 2011 by Brad

How Hard Is It For A US VC To Fund A Company In Brazil?

Question: How hard is for USA VCs fund an abroad startup? e.g. Brazil. There are not so many VCs here, so I would like apply for investors in the USA. Have you seen that before?

US-based VCs tend to fall into two categories – those who don’t do any deals outside the US (other than Canada) and those who do. So before you start talking to VCs, make sure you which category they fall into. For example, our firm – Foundry Group – doesn’t invest outside the US while our friends at Union Square Ventures do, although their portfolio is concentrated in Europe.

Assuming a firm invests outside the US, you should be able to easily check from their portfolio whether they’ve invested in your country (in this case, Brazil). If they haven’t, it’s a long shot that they will. If they have, they are likely a good target for you.

As US VC firms have expanded to Europe and Asia (especially China and India), they have built local teams in the countries they are expanding to. In some cases, firms like FIR Capital are affiliated with a VC network (in this case, the DFJ Network).

I don’t know anything about the Brazilian entrepreneur or VC market although a quick Google search for VCs in Brazil turns up some good data about firms both in Brazil as well as US firms that have invested in Brazil. Not surprisingly, there’s also some data on Quora. And in my exploration, I found Rodrigo Baer, a partner at Warehouse Investimentos in São Paulo, who is a VC blogger (and has been added to our VC Blogger sidebar). So there is plenty of info out there about VC firms investing in Brazil.

The basic message is “know who you are talking to and where they like to invest.”