Accessing the capital markets in Brazil means choosing among at least five distinct regulatory instruments — and picking the wrong one is costly in time, money, and dilution.
TL;DR – Regulated equity crowdfunding is available to companies with annual gross revenue of up to R$ 40 million (CVM Resolution 88/2022, issued by the CVM — Comissão de Valores Mobiliários, Brazil’s securities and exchange commission); above that threshold, the path changes. – SAFE (Simple Agreement for Future Equity) is agile but has no specific regulation in Brazil — each clause matters more than the instrument’s name. – “Mútuo conversível” (“convertible loan agreement,” a debt instrument with an option to convert into equity) is debt; a SAFE is neither debt nor equity until it converts. That difference changes the balance sheet and the due diligence process. – An IPO requires registration as a “companhia aberta” (publicly held corporation) with the CVM and involves regulatory costs that rarely pay off below R$ 200 million in market value. – Convertible debentures are the most flexible regulated alternative for SMEs that have moved past the seed stage. – A FIP (“Fundo de Investimento em Participações,” a private equity–style investment fund) is a structure founders often encounter as an investor — understanding how it works changes the negotiation. – Every public offering creates ongoing disclosure obligations. Ignoring this operational cost is the most common mistake made after raising capital.
Table of Contents
- Editorial case: when choosing the right instrument makes the difference
- Equity crowdfunding: CVM Resolution 88/2022 — who can raise funds and how much
- SAFE, convertible loans, and debentures: differences every founder should know
- Going public (IPO): when it makes sense and what the CVM requires
- FIP: how it works when one invests in your startup
- Comparison table: regulated fundraising instruments
- Post-offering obligations: the cost nobody calculates in advance
- Frequently asked questions
Editorial case: when choosing the right instrument makes the difference
A healthtech startup with annual gross revenue of R$ 8 million sought to raise R$ 2 million to expand its product. The founders were considering, in parallel, an equity crowdfunding platform and a “mútuo conversível” (convertible loan agreement) with a venture capital (VC) fund.
Legal analysis revealed that an offering through the regulated platform would not require an individual registration with the CVM — the platform operates under prior authorization (CVM Resolution 88/2022) — and would allow the company to raise up to R$ 15 million per year. The convertible loan, on the other hand, would bring in a single institutional investor with veto rights over mergers and divestitures. The company chose the crowdfunding platform, fit within the applicable limits, structured the offering with legal assistance, and completed the raise without creating contractual restrictions that would have complicated the Series A round planned for 18 months later.
Situations like this involve variables specific to each business. This case is meant only to illustrate that choosing the right instrument is a legal and strategic decision — not a mere formality.
Equity crowdfunding: CVM Resolution 88/2022 — who can raise funds and how much
Equity crowdfunding in Brazil is regulated by CVM Resolution 88/2022, which revoked and improved upon the previous rule (CVM Instruction 588/2017). The logic is simple: smaller companies access investor capital through electronic platforms authorized by the CVM, without having to register a conventional public offering.
Who can raise funds (issuer)
- Companies with annual gross revenue of up to R$ 40 million in the fiscal year ended before the offering.
- The company cannot already be a publicly held corporation registered with the CVM (if it already is, CVM Resolution 88 does not apply).
- Startups organized as a closely held “S.A.” (corporation) or “Ltda.” (“limited liability company,” Brazil’s most common private-company structure) qualify — the corporate form is not a barrier, though an S.A. makes it easier to issue shares to crowdfunding investors.
Limits per offering and per platform
- Each company can raise up to R$ 15 million in any 12-month period, combining all platforms used.
- The platform must be previously authorized by the CVM and acts as an intermediary between issuer and investor; it does not guarantee the offering’s success.
Issuer obligations under CVM Resolution 88
- Disclose a simplified prospectus (information about the business, use of proceeds, risks, and financial standing for the last two fiscal years, or since incorporation if more recent).
- Provide periodic information to the platform after the raise — frequency and scope are set out in the platform’s rules and in Resolution 88 itself.
- Disclose material facts that could impact investors’ decisions.
- Respect the withdrawal period: investors may back out within seven days of making the investment.
Regulatory update: The CVM conducted a public consultation (closed on 01/23/2026) on a rule intended to replace Resolution 88/2022, proposing to raise the fundraising cap to R$ 25 million per 12-month period and to remove the gross revenue ceiling for unregistered companies. The replacement rule had not been published as of this article’s writing — the figures cited above reflect the currently effective Resolution 88/2022. Confirm the applicable legislation before structuring any offering.
What the investor faces
CVM Resolution 88 caps how much a non-qualified individual investor can put in: up to R$ 20,000 per year across crowdfunding offerings, or 10% of gross income or net worth (whichever is greater), if income or net worth exceeds R$ 200,000. Understanding this cap matters for founders estimating the expected average ticket size for an offering.
SAFE, convertible loans, and debentures: differences every founder should know
These three instruments come up together in fundraising conversations, but they have distinct legal natures — and treating one as if it were another creates problems during due diligence and on the balance sheet.
SAFE (Simple Agreement for Future Equity)
The SAFE was created by Y Combinator in 2013. Brazil has no specific regulation for the SAFE: it is treated as an atypical contract, governed by the principle of freedom of contract (Civil Code, art. 421) and by whatever the parties freely agree. It is not a loan — it creates no obligation to repay cash — nor is it immediate equity ownership. It is a contractual right to receive equity upon a future event (a qualified financing round, liquidation, or IPO).
Advantages for the founder: it doesn’t create debt on the balance sheet, has no forced maturity date, and bears no interest. Risks: without a specific regulatory framework, a poorly drafted clause can trigger disputes over what counts as a conversion event, what percentage results from conversion, and whether the SAFE converts ahead of or behind pre-existing debt (a seniority issue).
The SAFE also doesn’t dispense with analysis under Banco Central do Brasil (BCB, Brazil’s central bank) rules: if the investor is foreign, the inflow of funds must be registered as foreign direct investment — and getting that registration right affects how the future conversion is treated by the BCB.
Convertible loan (“mútuo conversível”)
The “mútuo conversível” is debt with an option to convert into equity. Its legal nature is that of a loan agreement (Civil Code, arts. 586 to 592), with an added conversion clause. Until it converts, it sits on the liabilities side of the balance sheet — which can affect financial ratios and covenants in other contracts.
For more detail on the critical clauses of a convertible loan — cap, discount, interest, maturity, and conversion events — see the dedicated article on this topic on this site.
Debentures and convertible debentures
A debênture (debenture) is a debt security issued by an S.A. (corporation), regulated by Law 6,404/1976 (arts. 52 to 74) and by CVM Resolution 160/2022 (for offerings with restricted or public efforts). A convertible debenture gives the holder the right to convert the credit into shares of the issuer.
For SMEs already operating as a closely held S.A. that need growth capital, the convertible debenture is a regulated instrument with potentially greater liquidity than a convertible loan and greater familiarity among credit funds. ANBIMA (Associação Brasileira das Entidades dos Mercados Financeiro e de Capitais, Brazil’s capital markets and financial industry association) maintains guidelines on debenture standardization that affect how funds receive them.
An offering with restricted efforts (CVM Resolution 160/2022, Annex C) dispenses with public registration but limits the audience to professional investors. A public offering with broad efforts, by contrast, requires registration with the CVM and a full prospectus.
Going public (IPO): when it makes sense and what the CVM requires
An IPO (Initial Public Offering, or oferta pública inicial de ações) means registering the company as a publicly held corporation (“companhia aberta”) with the CVM, under Law 6,385/1976 (arts. 19 to 22) and Law 6,404/1976, and carrying out a public offering of securities regulated by CVM Resolution 160/2022.
When it’s worth considering
The regulatory and operational cost of maintaining a publicly held company rarely pays off for companies with a market value below R$ 150–200 million. Below that threshold, annual compliance costs (audited financial statements by an independent auditor registered with the CVM, quarterly financial reports — ITRs — the Reference Form, the Management Report, results presentations, and investor relations — IR) can consume 2% to 5% of revenue in regulatory overhead alone.
For late-stage startups, an IPO opens access to scale capital, increases liquidity for founders and early-stage investors, and may be required as an exit route by FIPs with a mandate to divest through the market.
The regulatory process
- Registration as a publicly held corporation: application filed with the CVM together with corporate documentation, audited financial statements for the last three fiscal years, and the Reference Form.
- Registration of the offering: definitive prospectus, auditor’s comfort letter, legal opinion, and a distribution agreement with a lead underwriter (investment bank or brokerage).
- Book building: price discovery with institutional investors.
- Settlement: transfer of shares and receipt of proceeds.
CVM Resolution 160/2022 introduced the concept of an automatic offering (for companies that already have a track record of disclosure as public companies), reducing review timelines. For first-time issuers, CVM review can take anywhere from 30 to 90 business days, depending on how complete the documentation is.
Listing on B3’s special segments
Novo Mercado, Nível 2, and Nível 1 (B3 — Brasil, Bolsa, Balcão, Brazil’s stock exchange) require additional corporate governance commitments beyond the legal minimum: a minimum free float (25% for Novo Mercado), 100% tag-along rights for all shareholders, a board of directors with a majority of independent members, among others. These commitments are undertaken through a Participation Agreement with B3 — they are contractual in nature, not merely regulatory.
FIP: how it works when one invests in your startup
A FIP (Fundo de Investimento em Participações, a private equity–style investment fund) is a pool of investors governed by CVM Resolution 175/2022 (which consolidated investment fund rules) and CVM Resolution 179/2023 (specifically for FIPs). A FIP must keep at least 90% of its assets in equity-type holdings — shares, convertible debentures, subscription warrants, or other securities that confer effective participation in management.
What changes for founders when a FIP comes in as an investor
A FIP is not a passive investor. Regulation requires it to actively participate in the management of the invested company — which translates into tag-along and drag-along clauses, veto rights over strategic matters, a seat on the board of directors or the fiscal council, and broader information rights than a typical convertible loan would provide.
In addition, a FIP has a fixed term and a mandate to divest: at some point — whether through an IPO, a strategic sale (M&A), or a buyback by the founders — the FIP will need to liquidate its position. Knowing the FIP’s timeline and exit scenarios before signing the term sheet changes the negotiation.
FIPs can be seed-capital funds, equity funds, or infrastructure funds — each type has specific rules about investor eligibility (qualified or professional investor, as defined in CVM Resolution 30/2021).
Comparison table: regulated fundraising instruments
| Instrument | Main legal basis | Required corporate form | Fundraising cap | Minimum investor | Post-raise obligation |
|---|---|---|---|---|---|
| Equity crowdfunding | CVM Resolution 88/2022 | S.A. or Ltda. | R$ 15 mi/year per issuer | Individual, no minimum investment amount required | Periodic disclosures to the platform; material fact disclosures |
| SAFE | Civil Code, art. 421 (atypical contract) | Any | No regulatory cap | No regulatory restriction | None (governed purely by contract) |
| Convertible loan (“mútuo conversível”) | Civil Code, arts. 586–592 | Any | No regulatory cap | No regulatory restriction | None (governed purely by contract) |
| Debentures (restricted efforts) | Law 6,404/1976 + CVM Res. 160/2022 | S.A. | No fixed cap | Professional investor | Periodic disclosures to the CVM; material fact disclosures |
| IPO / Broad public offering | Law 6,385/1976 + CVM Res. 160/2022 | Publicly held S.A. | No cap | General public | Quarterly reports (ITR), annual financial statements (DFP), Material Fact disclosures, Reference Form, results presentations, IR |
| FIP (as fundraising vehicle) | CVM Res. 175/2022 + 179/2023 | S.A. | As set by the fund’s bylaws | Qualified or professional investor | Quarterly management report; annual audit; active participation in the investee |
Post-offering obligations: the cost nobody calculates in advance
The most common mistake made by founders and CFOs accessing the capital markets for the first time is calculating the cost of the raise itself (advisory fees, distribution commission, CVM registration) while forgetting the annual cost of keeping up with ongoing obligations.
Obligations common to any public offering registered with the CVM
- Material fact disclosure: any information capable of influencing an investor’s decision must be disclosed immediately through the Electronic Disclosure System (SDE). Delaying or omitting a material fact is an administrative violation (Law 6,385/1976, art. 9) — with the potential for a CVM enforcement proceeding.
- Management report: an annual document accompanying the financial statements, describing results, outlook, and material changes.
- Independent audit: performed by auditors registered with the CVM (also regulated by the CFC — Conselho Federal de Contabilidade, Brazil’s federal accounting council — and, for ADRs listed on U.S. exchanges, by the PCAOB).
- Earnings calls: for publicly held companies with shares traded on the exchange, the market expects — and under some listing-segment rules, requires — quarterly results disclosures with a presentation for analysts.
For equity crowdfunding (CVM Resolution 88)
The obligations are lighter — but they exist. The platform sets the reporting calendar, and the issuer must disclose material corporate changes, use of proceeds, and annual financial standing. Failing to comply blocks the company from raising funds on the platform again.
Post-raise compliance costs should be factored into the financial projections before deciding to raise capital. Ignoring them effectively means underestimating the true total cost of the raise.
Frequently asked questions
What is the equity crowdfunding fundraising cap for a startup in Brazil?
A startup can raise up to R$ 15 million in any 12-month period through platforms authorized by the CVM, under CVM Resolution 88/2022. The cap applies to the issuer — not per platform: if a company raises funds on two different platforms, the amounts are added together. To qualify, the company must have annual gross revenue of up to R$ 40 million. Companies above that revenue threshold cannot use CVM Resolution 88 and need to consider other instruments, such as debentures with restricted efforts (CVM Resolution 160/2022) or a private round with qualified investors. The cap for non-qualified individual investors is R$ 20,000 per year, or 10% of gross income or net worth (whichever is greater, if income or net worth exceeds R$ 200,000). Whether a company qualifies depends on its specific circumstances. (Note: a CVM public consultation from January 2026 proposes raising this cap to R$ 25 million — watch for publication of the rule replacing Resolution 88.)
This is general information and does not replace consulting a lawyer to analyze your specific situation.
Are a SAFE and a convertible loan the same thing in Brazil?
They are not the same thing. The convertible loan (“mútuo conversível”) is a loan governed by the Civil Code (arts. 586 to 592): it is debt, has a maturity date, accrues interest, and sits on the liabilities side of the balance sheet until it converts. The SAFE (Simple Agreement for Future Equity) is an atypical contract in Brazil — there is no specific legislation governing it — and it is not debt: the investor has no right to demand their money back, only the right to receive equity upon a future event. In practice, the difference matters for the balance sheet (a SAFE may be classified as an equity instrument, depending on its structure), for covenants in existing debt agreements, and for due diligence in future rounds. Both instruments need well-drafted clauses covering the conversion event, the resulting percentage, and seniority. Foreign investors using either instrument need to register the inflow of funds with Banco Central do Brasil.
This is general information and does not replace consulting a lawyer to analyze your specific situation.
When does it make sense for a Brazilian startup or SME to go public with an IPO?
An IPO makes sense once a company has enough scale to absorb the annual regulatory costs — generally estimated between R$ 3 and R$ 8 million per year for smaller publicly held companies, factoring in audit fees, investor relations (IR), specialized legal staff, and disclosure overhead. Below an estimated market value of R$ 150–200 million, these costs rarely pay off relative to the capital raised. For SMEs, alternatives such as debentures with restricted efforts (CVM Resolution 160/2022) or fundraising through a FIP tend to be a better fit. An IPO also requires registering as a publicly held corporation with the CVM (Law 6,385/1976), audited financial statements for the last three fiscal years, and adapting to the governance requirements of B3’s listing segments. The decision involves strategic, financial, and regulatory variables that vary case by case.
This is general information and does not replace consulting a lawyer to analyze your specific situation.
Talk to a lawyer
If you’re considering a fundraising round, structuring an offering, or you’ve received a term sheet from a FIP or VC fund, talking to a lawyer before signing — not after — is the starting point for understanding the risks before taking on contractual obligations.
Disclaimer: This is general information and does not replace consulting a lawyer to analyze your specific situation. Capital markets law is governed by CVM rules that are frequently updated — verify that the resolutions cited are still in force before making any decision.
Alessandra De Paula Souza — OAB/PR 31.133 Practice focused on capital markets, public offerings, and equity crowdfunding.