The investment decision-making process of Portuguese venture capital funds: What’s different and what’s the same?

Startups have been proliferating in the business landscape despite the capital restrictions that these companies usually face. This competition for capital has created a very sophisticated venture capital industry across the world. Extant literature explains the investment process of venture capital firms in different countries but no work has previously studied the Portuguese industry. To fill this gap, we have conducted an exploratory study in this country using semistructured interviews. Our findings unfold an interactive process with some simultaneous elements. Surprisingly, the startup’s financial track record is not important in the investment decision. This research results represent a contribution to the body of knowledge on the Portuguese VC industry.info:eu-repo/semantics/acceptedVersio

Venture capital: o processo de tomada de decisão e investimento em startups

Nos últimos anos tem-se assistido a uma tendência crescente de criação de startups. Apesar da importância destas empresas no crescimento económico dos países, observam-se fortes restrições de acesso ao capital, e é neste contexto que o venture capital se assume como uma das principais fontes de financiamento. Embora sejam vários os autores a tentar descrever o processo de investimento das sociedades de capital de risco, verifica-se uma escassez de estudos que abordem mercados com as características de Portugal. Neste sentido, o presente estudo procura analisar o processo de tomada de decisão dos capitalistas de risco portugueses. Assumindo uma abordagem exploratória, foram realizadas entrevistas semiestruturadas a dezassete especialistas, nomeadamente capitalistas de risco, para definir como ocorre a seleção de startups e descrever todos os procedimentos adotados no processo de investimento. Os resultados obtidos mostram que este processo acontece de forma interativa entre os intervenientes e que algumas atividades podem decorrer simultaneamente. Adicionalmente, o estudo sugere que os critérios de seleção são focados essencialmente nas características da equipa de gestão e do produto ou serviço, seguindo-se as particularidades do mercado e as potenciais opções de saída.In recent years, there has been a growing trend in the creation of startups. Despite the importance of these companies in the economic growth of countries, capital restrictions normally exist. It is in this context that venture capital is one of the main sources of financing. Although several authors try to describe the investment process of venture capital firms, there is a lack of studies addressing markets with the characteristics of Portugal. Thus, this study seeks to analyze the decision-making process of Portuguese venture capitalists. Taking an exploratory approach, semi-structured interviews were conducted with seventeen specialists, namely venture capitalists, to define how the selection of startups occurs and describe all the procedures adopted in the investment process. The results obtained show that this process occurs interactively among the players and some activities can take place simultaneously. In addition, the study suggests that the selection criteria are essentially focused on the characteristics of the management team and the product or service, followed by market features and potential exit options