4 reasons to make an investment round abroad  

rodada de investimento

Making an investment round abroad has been promising for several startups in Brazil and Latin America. The region’s technological development is drawing the attention of investors globally and opening doors for fundraising beyond the national territory. Understand the benefits of raising funds abroad! 

4 reasons to make an investment round abroad 

Foreign VCs have more capital: 

Foreign Venture Capital (VC) funds are usually more capitalized and, consequently, have more risk appetite due to the market maturity. American VCs, for example, have been in the market for a longer time when compared to Brazilian funds, which brings more possibilities for fundraising and, as a result, investment potential. 

In 2021, according to data published by Statista, the value of investments made by American VCs amounted to approximately US$300 billion, almost double the previous year. 

Another advantage is higher competitiveness in countries like the U.S., so VCs are willing to offer more attractive proposals to close a deal. This scenario directly impacts the startup’s valuation – by receiving larger contributions, the valuation increases. 

More VC options 

Among the largest fundraisings in 2021 for Brazilian startups, such as Nubank, Quinto Andar, Gympass, and Mercado Bitcoin, all of them had foreign investors, from countries like the United States and Japan. In late-stage rounds, the VCs leading rounds are predominantly from abroad.

When pursuing investments outside the country, Latin American startups have more possibilities and options for VCs to compose their fundraising, something important for those in early-stage. In addition, there are several Venture Capital firms focused on specific verticals – fintech, Edutech, healthtech, insurtech, and so on – and having the support of specialists in your market can be crucial to the success of the relationship with your investor.

FOMO 

Fear of missing out (FOMO) is a fact for foreign investors. The innovation ecosystem in Latin American countries has gained prominence worldwide; the success of startups like Nubank has drawn attention to the region. Now, investors keep an eye on what happens in Latin America so as not to be left out of the great opportunities.  

Round announcement 

From a marketing and public relations perspective, fundraising with the participation of foreign investors brings importance to the announcement of the round: besides conveying confidence, it attracts the market’s attention. 

Steps following the investment round 

After the fundraising, it will be necessary to transfer the funds to Brazil or to your company’s operation country. 

It is important to count on a specialized partner to support this process, such as Trace, which offers the best rate in the market. In addition, Trace makes all the DER registrations free of charge and even introduces clients to foreign VC funds for future funding.

To better understand how Trace contributes to the Latin American startup journey, click here! 

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