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PROCOMER is a non-state public entity responsible for promoting Costa Rican exports. In its mission to promote and facilitate foreign trade and investment, it has created mechanisms to help micro, small, and medium-sized enterprises with export capacity reach international markets.
In line with this purpose, it has generated instruments that facilitate communication between the Costa Rican business world and private investors. However, before investing, it is crucial to have a clear understanding of the stage the company is in and the available funds. This is of vital importance as it will allow any risk to be measured.
TYPES OF INVESTMENTS
The stage in which the company intended for investment is, along with the available funds, will determine the type of investment to be made. It is important to know the types of investments to better assess the risks and align expectations. According to a report issued by the Costa Rican Foreign Trade Promotion Agency, the following types of investments are identified:
(A) Seed Capital: Is made in companies that are in the ideation-validation and prototyping stage to begin testing the company’s idea and concept. The purpose of this investment is to expand the team, study the market, and primarily generate sales.
(B) Angel Investment: May have characteristics similar to those susceptible to “Seed Capital” investment. However, companies that receive angel investment already have a prototype, traction (letters of intent to purchase), or sales. The goal with this investment is to increase cash flow.
(C) Series A Investment Round: This investment will be the first round to obtain the capital necessary for exponential sales growth of the company. Investors in this round are venture capitalists with a focus and experience in investing in companies. Companies are already in a growth phase but need working capital to continue developing operations.
(D) Series B Investment Round: The company’s value has already increased. This stage poses lower risk for the investor, given that there is a degree of certainty about the viability and operation of the business. In turn, it is basically based on comparative analysis of the company’s performance with the rest of the industry in which it operates.
Therefore, a thorough analysis of the company in which you want to invest, as well as the capital available for investment, is vital to make the right choice that aligns with your goals. At ERP Lawyers, we have a team of specialized attorneys ready to provide you with the best assistance. If you need more information, do not hesitate to contact us at info@erplawyers.com