Multilateral development banks: understanding their impact on start-up development in Latin America

What is it about?

This paper examines the performance of start-ups invested by Multilateral Development Banks VC funds (MDBVCs), as compared to those funded by government-sponsored VC funds (GVCs), in terms of access to subsequent rounds of VC financing –local and international– and international expansion. We use a unique dataset of 437 start-ups that received VC investments in 7 Latin American countries. We find that start-ups funded by MDBVCs outperform GVC-funded start-ups in all dimensions under analysis. Consistent with previous studies, we find that private VCs (PVCs) lead the ranking.

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