Among the innovations of the law is the creation of an experimental regulatory environment (regulatory sandbox), a differentiated regime that allows companies to bring products to market with less bureaucracy. Regulators such as Anvisa or Anatel can temporarily suspend certain standards required of companies in this sector for startups. Meanwhile, measures to support startups have been discussed by lawmakers. On December 9, 2019, the House of Representatives established a special committee to review PLP No. 146/19, which dealt with the issue. The draft prepared by the Executive was received by the Special Committee and added to PLP No. 146/19. A joint text combining elements of the two proposals was approved by both chambers of the National Congress on 11 May 2021 and approved by the President of the Republic and named Complementary Law No. 182. • Capital contribution: startups can rely on the resources of natural and legal persons without necessarily having a stake in the share capital and the management and decision-making power of the company. Therefore, they are not responsible for the company`s debts or the assets themselves, except in cases of fraud, fraud or investment simulation. • Source of resources: startups can obtain funding through equity funds or equity mutual funds (FIPs) in seed capital categories; emerging or research-intensive economic production firms; Development and innovation. • Sandbox: These companies can rely on an experimental regulatory environment (regulatory sandbox).

Some regulators, such as Anvisa and Anatel, may temporarily suspend certain standards required of companies in the sector for startups. The sandbox should specify the criteria for selecting or qualifying the company, the duration and extent of suspension of the impact of the standards. • Funding schemes: companies obliged to invest in research and innovation can also apply through programmes, opinions or competitions run by public bodies. Each contract can cost up to R$1.6 million and must be updated by IPCA. After a general term of up to 24 months, the startup can be the supplier of the generated innovative article. • Angel investor: Mutual funds can act as angel investors in micro and small enterprises (gross turnover up to R$4.8 million per year). This character invests money in the innovation company without participating in the commission, even if the resources are greater than the social capital. However, it will be possible to participate in the discussions in a consultative manner and to have access to accounting and administrative documents.

The new law recognizes innovative entrepreneurship as a vehicle for economic, social and environmental development; calls for the creation of a legally safer environment; provides greater contractual freedom and encourages investment; modernizes the Brazilian business environment in light of new business models; encourages innovative entrepreneurship as a means of creating skilled jobs; creates an entrepreneurship ecosystem through cooperation between public institutions, between them and the private sector, and between private actors; and encourages the government to hire start-ups that offer innovative solutions to public problems and exploit potential opportunities for the economy. The term „startup” in a free translation means „to start something”, which has been used for some time in the business world as a reference to a company in its early days. Not only are startups in their infancy, but they also tend to have an innovative offering with a repeatable business model, i.e. able to deliver the same product or service at scale and be considered scalable, meaning they can grow without representing a proportional increase in costs. Another way for start-ups to obtain financing is through equity funds (Law 13,800, 2019) or equity funds (FIP) in the categories of seed capital, emerging companies and companies with intensive economic production in research, development and innovation. Start-ups must declare in the founding act the use of innovative models or models covered by the special Inova Simples regime provided for by the statute for micro and small enterprises. However, to enter Inova Simple, the maximum gross turnover would have to be R$4.8 million. The FIP (CVM Normative Instruction 391) is an investment in variable income in the form of a closed community in which allowances are repaid only at the end of their term or when it is decided at the meeting to liquidate them. IFP can be involved in limited liability companies whose gross annual turnover does not exceed R$16 million, which is why this ceiling has probably been set for the supervision of companies considered startups. After two years of debate between the government and civil society, on Tuesday 1, Bill 146/19, known as Marco Legal the Startups, was approved. The text, which has not yet been published in the Official Journal, contains a regulation allowing innovative companies to develop their activities.

The framework includes significant changes that will simplify businesses, including: Well, angel investor regulation has not made this contractual instrument the most widely used, on the contrary, I dare say it is the least used by investors precisely because of restrictions and legal requirements. Currently, the convertible loan agreement is most often used in connection with investments in startups, precisely because it is not overly regulated and offers contractual freedom to the parties. By law, startups must meet the following requirements: revenues of up to R$16 million; training period of up to 10 years; and a business model that is the subject of a simple innovation or declaration in the memorandum of association and that acts as an innovative business model. Supplementary Law No. 182/21, adopted on 1 June, will enter into force on Tuesday (31 August) – 90 days after its publication. Regarding the legal framework for startups, the standard aims to establish specific rules for the sector in the country, thus promoting the business environment, including the hiring of startups by the public administration. It came with news. In addition, to free up capital for the innovation environment, the legal framework allows equity investment funds (FIPs) to invest in startups, in addition to investing in programs and competitions to finance these companies through public institutions.