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Post-investment trajectories of Latin American young technology-based firms: an exploratory study

Author

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  • Manuel Gonzalo
  • Juan Federico
  • Sergio Drucaroff
  • Hugo Kantis

Abstract

This study identifies and discusses the different post-investment trajectories of Latin American young technology-based firms (YTBFs). Two contrasting types of post-investment trajectories were identified: the ‘fast sale’, in which local YTBFs are purchased by a foreign firm and founders decide to leave the company, and the ‘multilatina’, in which the YTBF grows mainly by organic means and also through acquisitions until it becomes one of the industry's big global payers, with the founders still playing a leading role. There is also a continuum of intermediate situations such as in the case of Core where the original location remains as an R&D center in the context of the emerging post-investment configuration of the firm. These differences are related to the local resources in the emerging organizational configuration, notably the match between entrepreneurs' skills and vision, the growing demands of the firm after the investment, and the level of development of the local ecosystem. Foreign venture capital (VC) could play an important role in this regard by accelerating the pace of growth and internationalization faced by these firms. However, this could also lead to the exit of the entrepreneurs. The impact of these trajectories at the regional level should take account of the ‘entrepreneurial recycling’ concept suggested by Mason and Harrison (2006) by considering what happens with the entrepreneurs after the investment.

Suggested Citation

  • Manuel Gonzalo & Juan Federico & Sergio Drucaroff & Hugo Kantis, 2013. "Post-investment trajectories of Latin American young technology-based firms: an exploratory study," Venture Capital, Taylor & Francis Journals, vol. 15(2), pages 115-133, April.
    • Handle: RePEc:taf:veecee:v:15:y:2013:i:2:p:115-133
    DOI: 10.1080/13691066.2013.791088
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    References listed on IDEAS

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    1. Politis, Diamanto & Gabrielsson, Jonas, 2006. "Informal investors and value added: what do we know and where do we go?," Papers in Innovation Studies 2006/13, Lund University, CIRCLE - Centre for Innovation Research.
    2. Bianchi, Patrizio & Kantis, Hugo & Bacic, Miguel Juan & Suaznabar, Claudia & Studart, Rogerio & Vasconcelos, Luiz Antonio Teixeira & Moori Koenig, Virginia & Federico, Juan & Martínez, Julia & Parrill, 2004. "Developing Entrepreneurship: Experience in Latin America and Worldwide," IDB Publications (Books), Inter-American Development Bank, number 442.
    3. Politis, Diamanto & Gabrielsson, Jonas, 2006. "Informal investors and value added: The contribution of investors’ experientially acquired resources in the entrepreneurial process," Papers in Innovation Studies 2006/12, Lund University, CIRCLE - Centre for Innovation Research.
    4. Patrizio Bianchi & Hugo Kantis & Miguel Juan Bacic & Claudia Suaznabar & Rogerio Studart & Luiz Antonio Teixeira Vasconcelos & Virginia Moori Koenig & Juan Federico & Julia Martínez & Mario Davide Par, 2004. "Developing Entrepreneurship: Experience in Latin America and Worldwide," IDB Publications (Books), Inter-American Development Bank, number 79932 edited by Hugo Kantis & Virginia Moori Koenig & Pablo Angelelli, February.
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    Cited by:

    1. Mauro, Lucía Mercedes & Calá, Carla Daniela & Belmartino, Andrea & Bachmann, Federico, 2020. "Inserción internacional de PyMEs. El caso de las empresas productoras de software y servicios informáticos de la ciudad de Mar del Plata (Argentina)," Nülan. Deposited Documents 3344, Universidad Nacional de Mar del Plata, Facultad de Ciencias Económicas y Sociales, Centro de Documentación.
    2. Manuel Gonzalo & Hugo Kantis, 2021. "The Indian venture capital emergence, development, and boom: A southern contextualization," Growth and Change, Wiley Blackwell, vol. 52(2), pages 687-705, June.

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