2014
Working Paper
HBS Working Paper Series

Adding Value Through Venture Capital in Latin America and the Caribbean

By: Josh Lerner, Ann Leamon, James Tighe and Susana Garcia-Robles

Format:Print
| Language:English
| Pages:51

Abstract

Venture capital (VC) investment has long been recognized as an engine for economic growth and development. Unlike bank loans, where the entrepreneur receives money and is left alone as long as the payments arrive on the pre-arranged schedule, venture capital investments add the quality of active investing to the cash infusion. In exchange for taking on the risk of young companies in uncertain environments, venture capitalists receive board level oversight privileges, which range from approval of budgets and advice on product development to the right to replace the management team should they consistently under-perform. This activity, performed by individuals with substantial experience in shepherding young companies to maturity, creates substantial value in the portfolio company.

Keywords

Venture Capital; Value; Entrepreneurship; Investment; Latin America; West Indies

Citation

Lerner, Josh, Ann Leamon, James Tighe, and Susana Garcia-Robles. "Adding Value Through Venture Capital in Latin America and the Caribbean." Harvard Business School Working Paper, No. 15-024, October 2014.