Start-Up Chile

Start-Up Chile

Industry	Seed acceleration
Website	startupchile.org

Start-Up Chile is a seed accelerator created by the Chilean Government based in Santiago, Chile. It provides equity free investment for qualified startups.

Start-Up Chile, The program

Start-Up Chile is a program created by the Chilean Government that seeks to attract early-stage, high-potential entrepreneurs to bootstrap their startups using Chile as a platform to go global. The end goal of this program is to position Chile as the innovation and entrepreneurship hub of Latin America.

Start-Up Chile is a highly selective program which selects startups from over thousands of applications. The deal flow is represented by 3 distinct programs based on the stage of the startup.

The S Factory: Pre-acceleration program for startups in early concept stage focusing in female founders. Selected companies receive $10 million CLP (around USD$14K) equity free and 3 months acceleration. Two rounds a year of 20-30 companies each.

Seed: Acceleration program for startups with a functional product and early validation. Selected companies receive $20 million CLP (around USD$30K) equity free and 6 months acceleration. Two rounds a year of 80-100 companies each.

Scale: Follow-on fund for top performing startups that are incorporated in Chile, have traction and are looking to scale in LATAM and globally. Selected companies receive $60 million CLP (around USD$86K) equity free with the condition that they incorporate and open operations in Chile. Two rounds a year of 20-30 companies each. In each of them, at least one of the founders of the startup has to settle in Chile and give back to the Chilean society through a social impact program that aims to promote innovation and entrepreneurship.

The S Factory

The S Factory is a pre-accelerator where female leaders turn innovative ideas into functional prototypes. We are looking for projects that are technology related with high impact potential to join us for a 12-week experience to learn all the basics to get started in the startup world. Plus, participants will get the opportunity to live the amazing experience of learning side by side with Start-Up Chile, the largest and most diverse startup community in the world.

The S Factory program is powered by Start-Up Chile, with its largest and most diverse startup community in the world. If you are a female and you want to start your startup but you are not quite sure how to do so, then this is the right place. For female founders that already have their startup going we recommend them to apply to Start-Up Chile instead since they might be overqualified for The S Factory. This is a program built for startups in really early stages, in concept stage or with a prototype that has less than 6 months of development.

Being part of a brand new, groundbreaking entrepreneurial experience. Having the chance of a lifetime that will probably change the perspective on how to approach new opportunities and business in general. Also meeting vibrant entrepreneurs from all over the world in a multicultural and collaborative workspace.

The program assigns a USD$14,000 (amount might change depending on the exchange rate) grant per startup (CLP$10,000,000), a 1-year resident visa to the team member specified on the application, as well as a nice and comfortable workspace (desk & wifi) that is shared with entrepreneurs from around the world. The best part of the The S Factory is the networking, inspiration, and productive experience to get ideas off the ground.

Seed Program

This program seeks to attract world class entrepreneurs in early stage to start their business in Chile, strengthening enterprise environment, supporting the culture of innovation in our country, and connecting with Latam to grow from this region to the world.

This grant is aimed at individuals of any nationality, including Chile, who are founders or owners of startups.

This subsidy delivery financing for 90% of total program costs, $20 million (Chilean pesos) per project. The beneficiary must provide 10% of the costs. This subsidy works under a system of reimbursement or payment under.

In addition, this program will provide work visa for one year the beneficiary of the program and a team of up to 3 people (including the recipient), all presented the program during the application process.

WHAT ARE THEY LOOKING FOR?

They are looking for exceptional founders with high potential business plans. They will select companies with disruptive innovations that respond to unmet and incremental innovation, that prove greater value than other existing solutions in the market. These companies need to demonstrate significant traction, i.e. must have tested the solution and business model with clients and/or users, and have adjusted the product or service to a focused market. These companies must be generating sales and/or have raised private capital in the last year. Applications are judged by national and international business experts and successful startup founders handpicked by Chilean Government.

Acceptance rate for the program is under 1% which makes it highly competitive and harder than the top US Universities to be accepted.

ACCELERATION & EXPERIENCE

To accelerate is to cause faster or greater activity, development, progress, advancement or to hasten the occurrence of something. This is one of our goals at Start-Up Chile: to hasten the occurrence of customer-validated and scalable companies that will leave a lasting impact on the Latin American ecosystem. We have built a program to help accelerate you.

PLATOONS

Platoons are small groups of approximately 8-10 companies that meet on a weekly basis. Platoons provide an opportunity to receive rapid feedback from peers and to leverage the experience of other founders. These weekly encounters also increase accountability and promote brutally intellectually honest learning. Platoons groups are formed by development stage / industry.

SUP ACADEMY'

SUP Academy leverages the power of the Start-Up Chile community by identifying amazing talent and organizing workshops, talks and other learning experiences. We believe that the community is our greatest asset and SUP Academy draws strength from its ranks. Pitch Training is an essential part of SUP Academy. Pitching is an art. Some people are naturally gifted, but all require practice. Weekly Pitch Training sessions are the perfect opportunity to tweak those slides, overcome those stage jitters and master those communication skills. Those who practice often learn to pitch with power and conviction.

MENTORING

Our mentors are both talented and eager to help you grow. Start-Up Chile´s network expands beyond the borders of Chile with mentors in many parts of the world. Our mentors are not paid for their contributions, but do it out of the pure love for building companies, creating value and impacting the world.

DEMO DAY

This is where we show off the awesome and the best. This is where we connect our companies with investors in Latin America and the rest of the world. Prior to Demo Day, companies must first qualify by passing through Pitch Day, an opportunity to pitch to the Start-Up Chile community. In addition, upon arrival to the program, all companies are required to pitch their company at Intro Day.

HOW TO APPLY?

The applications for this call should be made online through the electronic system available www.startupchile.org/

SCALE Program

SCALE is a follow-on fund that offers 60 Million Chilean pesos to Chilean companies that need the extra capital to grow in Chile and expand to the rest of Latin America and the world. The money will be given through a co-financed grant in which Start-Up Chile will put up to CLP 60M, corresponding to 70% of the fund; the recipients of this grant must put up the remaining 30%.

For being eligible, the companies have to first pass through the Start-Up Chile Seed program, or other programs of the Entrepreneurship Branch of CORFO during the last two years, such as the ones specified in the following section. In addition, companies must be legally incorporated in Chile for no more than 5 years.

The application process will be announced internally and will be done through an online application form. Each company will be reviewed by a committee at CORFO (Entrepreneurship and Innovation agency of the government of Chile).

HOW IS THE APPLICATION GOING TO WORK?

Every applicant will upload their application in an online form including information about the traction and scale of the company, work plan and expected results and the team.

Every applicant will have to upload a 3-minute video describing the team, traction and impact of the company and the work schedule.

In the form, the applicants should choose a Supporting Entity (Entidad de apoyo), which will help the company to:

Get the necessary insurance for the grant, File the expenses for the grant to CORFO and Guide them in order to accomplish the goals of the project, to scale and expand the business internationally.

This supporting entity can be chosen before the application and indicated in the form. IF not, the entity must be appointed by the applicant company before the signature of the grant contract.

The following is the list of potential Supporting Entities:

ACCELERATORS

Endeavor Chile (Patagonia & Atacama)

City Global

3IE – UTFSM Universidad Federico Santa María

INCUBATEC UFRO Universidad de la Frontera

ACELERADORA UDD VENTURES UDD Ventures S.A.

AUSTRAL INCUBA Universidad Austral de Chile

CORPORACION SANTIAGO INNOVA Corporación Santiago Innova

CHRYSALIS Pontifica Universidad Católica de Valparaíso

EMPRENDE FCH Fundación Chile

INCUBA UC DICTUC S.A.

INCUBADORA DE LA INDUSTRIA TIC Incubadora de la Industria TIC S.A. (ImagineLab)

INNOVO USACH Universidad de Santiago de Chile

INCUBADORA DE NEGOCIOS ELEVAGLOBAL Incubadora de Negocios Elevaglobal SpA (Magical Startups)

HOW IS THE GRANT GIVEN TO THE SELECTED COMPANY?

The companies selected will have to sign a contract with CORFO, where the grant will be delivered in two equal installments of 30.000.000.- CLP.

The first one will be given right after the contract is formalized and the insurance is approved. The second one will be given after The company will have to submit two financial and technical development reports after the first 6 months and after the 12-month period of the grant contract.

WHAT WE EXPECT THE COMPANIES TO ACCOMPLISH?

We expect that the companies accomplish a minimal increase of 50% in sales or initial sales of at least 100.000.000.- Chilean pesos. Apart from this we expect them to accomplish at least one of the following goals:

New private fundraising rounds And the start or increase in exports to at least 2 different countries.

ACCOUNTABILITY OF THE COMPANIES

Every company will have to set a 4-month critical continuity milestone in the application form. This milestone will be set by the company during the application and revised by the CORFO Entrepreneurship committee, who can make observations and modify it, to ensure that the company is on the right track. If a company doesn’t approves the critical milestone, the contract with the beneficiary company, can be early terminated depending on the terms described in the T&C.

Also the company will have to set milestones for the 12-month project, also in the application form.

Every company will have to file reports after the 4th month for the critical continuity milestone, after the 6-month period and the 12-month period.

WHAT ARE WE GIVING THE COMPANIES APART FROM THE MONEY?

During this period the company will have full access, to all the Start-Up Chile resources workspace, mentors, the investor club, perks, and many other benefits.

Every company selected will be assign to a mentor from the program, and they will meet at least once a month, to take note on the development of the activities and goals of the company.

WHAT ARE THE COMPANY’S OBLIGATIONS WITH THE PROGRAM?

Every company selected must consider in their budget, expenses intended to finance activities for internationalization and exporting of goods and/or services; and also activities for the design and sophistication of the product or service and the creation of the brand strategy. Also, every company selected will be required to develop a social impact activity. The Companies must mentor 1 TSF company, for a period of 3 months, in 6 consecutive sessions, and file reports for every meeting. Each company will be assign by Start-Up Chile.

Social Impact

As a public policy, SUP has a social mission that seeks to change and improve the Chilean entrepreneurial culture. In addition to develop their projects, founders are also required to engage with the local ecosystem by doing activities that generate social impact. For this purpose, SUP invented an innovative scoring system, called Return Value Agenda (RVA), which measures the social impact that each entrepreneur generates when they approach the local community, by organizing keynotes, workshops, mentorships and events related to entrepreneurship and innovation. In this way the program can change the Chilean culture, demonstrating that entrepreneurs, from all over the world, are making innovative businesses and influencing locals with a richer entrepreneurial culture.

SUP has established many partnerships with local municipalities, entrepreneurial organizations, universities, companies, etc. This network allows Start-Up Chile founders to move rapidly within the local ecosystem and share their skills, knowledge and experience with Chileans. “I think it’s very important to address local problems by sharing our experience as entrepreneurs to children in schools. Motivating younger generations provides a future class of leaders and helps them become a part of the cultural change”, says Daniela one of the founders of Babytuto (Start-Up Chile Generation 9th). Finally, not only does RVA create a cultural change in Chile, but it also facilitates an easy insertion of startups constantly into the local ecosystem.

Last but not least, a study of the impact of Start-Up Chile, just came out from Stanford University. Mike Leatherbee (Ph.D.(c) Stanford University) and Chuck Eesley (Stanford University Dept. of Management Science and Engineering) wrote Boulevard of broken behaviors: Cognitive and Behavioral effects of Start-Up Chile. They explored “socio-psychological mechanisms to stimulate entrepreneurial ecosystems” in public policies, taken as an example Start-Up Chile. “After a long time studying, we found that as a result of a forced social interaction between two socio-geographically distant groups (foreign and Chilean entrepreneurs), Chilean entrepreneurs significantly improved behaviors needed to discover innovative opportunities. Moreover, Chileans learned new strategies to undertake. In addition, they established valuable contacts with those foreigners, who after six months in Chile returned to the innovation poles from where they came. That is, the Chilean participants improved their behaviors, learn new strategies and built valuable social networks. In summary, increased its potential capacity” wrote Leatherbee at El Mercurio newspaper.

Chile is full of entrepreneurs, but have always looked to build businesses at a local scale. However, after five years the program has shown that Chilean entrepreneurs are growing not only in numbers but are creating businesses at a global scale. “SUP transformed a group of science students from Universidad de Chile into global entrepreneurs and from a Chilean perspective that is extremely valuable. We entered with almost nothing to SUP and came out with an amazing MVP, users, a patent-pending technology. Six months after graduating from SUP, we got our second funding for 200K between a second CORFO funding and private investors” says Komal Dadlani, one of the founders of Lab4U, a mobile lab (Start-UP Chile generation 7th). Now more and more Chileans are entering the program. In 2011, 3 Chilean businesses were started, now, by this date, there are 45 Chilean businessesthat have gone through the program.

New ecosystem in Chile

Thanks to the startups that are coming to Santiago, SUP has become a leading player in positioning entrepreneurship in the public agenda. The arrival of other organizations such as Girls in Tech and Women 2.0 have also played a key role in changing the ecosystem in Chile. SUP was also responsible for the first Facebook hackathon in South America. The arrival of Evernote as a sponsor was also a landmark event. The Demo Days, Start-UP Chile was the first organization that

There has also been incredible growth in the number of local meetups and hackathons, including from well known organizations such as Startup Weekend and Startup Grind. Since SUP began, the entrepreneurs have organized more than 4.000 events, reaching more than 190.000 people from all over Chile. This growth and rapid transformation of the ecosystem would not have happened without Start-Up Chile taking a major step in creating a critical mass of entrepreneurs.

Today, the Chilean ecosystem is full of unique features. One example is that 17% of founders at SUP are women, a low percentage given the total, but still very high compared to other accelerators and incubators in Silicon Valley and in other parts of the world.

“How to invest”, is another factor that is changing in Chilean culture. SUP program alumni are creating funds to invest in other ventures, changing the status quo of traditional investments in Chile. Now startups are helping other startups to grow by venture funds. An example of this is Magma Ventures, founded by Nathan Lustig, Start-Up Chile alumnus. The numbers speak for themselves: SUP has invested nearly $30 million to develop entrepreneurship, while the capital raised post program reaches more than USD 100 million. “Chilean entrepreneurs today believe that they can develop a global business and that things can be done in a more flexible, dynamic and efficient way, like GoPlaceit,^[1] Babytuto, Biofilter, and many other Chilean startups”, says Sebastian Vidal, Executive Director of Start-Up Chile.

The support and consistency of the program has positioned Start-Up Chile as a model in Latin America and in many parts of the world, being emulated by several other countries. The World Bank has stepped in and begun supporting similar initiatives like Start-Up Jamaica. “Es similar pero no del todo… A pesar de las diferencias, el modelo chileno ha sido un gran inspirador” says Julian. J. Robinson, Minister of State in the Ministry of Science, Technology, Energy and Mining to the website Pulso Social. Also Brazil, Spain, Denmark and Malaysia are looking into the Chilean program. “SUP is successful in creating a unique ecosystem, different from the rest, where more countries are represented than in any other ecosystem in the world. This diverse profile of our entrepreneurs helps define the ecosystem”, says Sebastian Vidal, Executive Director of Start-Up Chile, speaking about the entrepreneurial environment in Chile.

Open to change

While the benefits and impact of SUP are helping to transform the Chilean culture, there are still many opportunities to be tackled.

According to The Global Entrepreneurship and Development Institute (GEDI) Chile is in the 15th place of the rank that measures the 3A’s” of development: entrepreneurial attitudes, aspirations, and activity of the most influential nations in the world. It is ranked above countries like Germany (18th) and top 1 in Latam (the closest is Colombia in the 25th place). Having said that, the first opportunity is to make the entrepreneurial ecosystem in Chile bigger, creating more links with global organizations and engaging the best startups in the region, and to continue working to make Chile the innovation hub of Latin America.

Different regions of Chile also are seeking a place within the entrepreneurial ecosystem, each with a different value proposition according to its regional strengths. That is why SUP is planning to gradually expand the program to other regions of the country to generate other ecosystems. “The new ecosystem will be very valuable to the country. If there are entrepreneurs who want to focus on development, it could be better to spend time in the regions. If they are entrepreneurs who want to sell and have meetings, Santiago is the best”, says the Co founder of Lab4U in regards to the program’s expansion to other regions besides Santiago´s metropolitan area

Retaining the best entrepreneurs and startups in Chile is always a challenge. SUP is considering ways to generate more incentives to stay in the country post program and provide a second phase of funding. “Creating the conditions to not only attract great talent, but also to encourage them to stay. This is our focus. Through greater access to capital funds we believe that this is possible”, says the Executive Director of SUP. That is why this year the program launched a follow on fund called Start-Up Chile SCALE, were Startups will receive up to 60 million Chilean pesos (around USD 100,000) to grow their businesses from Chile to the world.

Regarding the program, improving the acceleration experience is also an area of focus, especially in regards to mentoring. For the latter, SUP will work with companies and successful alumni, who can help the newer generations overcome common startup traps.

Beyond the changes, one thing is certain, Start-Up Chile is here to stay and grow. Chilean society has changed for good. But, there is still a lot of work to do to complete the transformation of Chile into a leading hub of innovation and entrepreneurship.

References

External links

• Start-Up Chile Official Website