When Portuguese companies need money to invest in new
technology or overseas expansion, they often rely on bank loans
or EU funds administered by the government.
Only a few big operators tap the capital markets through
initial public offerings or rights issues but the use of
venture capital, an important tool for company growth in many
countries, is increasing.
The small Portuguese venture capital market is characterized
by expansion-stage investments in manufacturing industries,
primarily consumer goods. Government equity programmes, which
have tended to be investment vehicles for European structural
funds, have crowded out potential private investors.
Initiatives such as the new venture capital law and a scheme
aimed at leveraging private venture funding have stimulated
venture activity. But measures are also needed to foster more
entrepreneurs, create a less risk-averse investment culture,
and take fuller advantage of international venture capital
In Portugal, venture capital is becoming an important tool
and resource for areas such as the carbon market and
biotechnology, which need high investment, and new initiatives
are being taken.
Portugal might create a venture capital fund for Africa.
Paulo Gomes, the Portuguese executive director of The World
Bank, which undertakes relations with Africa, has suggested the
constitution of a venture capital fund, with €230 million,
to invest in African countries, the fund being essentially
created with private capitals.
The biotechnology sector has registered an increasing growth
in Portugal and there are good prospects for venture capital.
Some projects have been undertaken with capital in this area,
but there is still a lot of scientific knowledge that can be
used in conducting new business plans.