In 2010, the country of Chile launched StartUp Chile to transform itself into a global innovation hub boasting a vibrant local ecosystem of global minded entrepreneurs. Since the creation of Start-Up Chile, Chile has attracted over 1,000 startups from more than 75 countries. Leading innovation rankings such as Startup Genome, GEDI Index and the Global Innovation Index have positioned Chile as a solid startup ecosystem, and studies conducted by researchers at Stanford University conclude that the StartUp Chile program is working citing that Chilean entrepreneurs who pass through the program significantly improve entrepreneurial skills.
Despite the extraordinary growth of Start-Up Chile, many local and foreign entrepreneurs still face serious fundraising problems. Access to seed funding, post Start-Up Chile, remains scarce. Solving this early seed crunch is critical to the further growth of the local ecosystem and to the retention of high potential companies. To solve this painful issue, Start-Up Chile has created a new follow-on fund for high potential portfolio companies.
Start-Up Chile SCALE is a follow-on fund that offers 60 Million Chilean pesos (approximately 100,000 USD) to companies that demonstrate significant traction, are generating revenue and need the extra capital to grow in Chile and throughout Latin America. The money will be given through a co-financed grant in which Start-Up Chile will put up to 60M CLP, corresponding to 70% of the funds; the recipients of this grant must put up the remaining 30%. Like the original Start-Up Chile grant, no equity will be demanded. Only companies that have first passed through the six-month Start-Up Chile program will be eligible to apply to this new fund. In addition, companies must have a legal presence in Chile as an incorporated company or legal subsidiary.
Applying to Start-Up Chile SCALE is simple. Towards the end of the Start-Up Chile program, companies that meet the standard requirements can submit an application. Each company will be reviewed by a committee at CORFO (Entrepreneurship and Innovation agency of the government of Chile). Up to ten companies will be selected from every generation of Start-Up Chile to receive the Start-Up Chile SCALE funds.
Start-Up Chile is confident that launching this new follow-on fund is a step in theright direction to generate higher social and economic impact in the country. The DNA of the program has always been to attract high potential entrepreneurs from around the globe and to give them the tools and resources to successfully build companies from Chile; at the same time, this would fundamentally alter the local
It is also important to note that investment funds in general need to cover this gap, since a vibrant and healthy ecosystem cannot rely solely on funds coming from the government. This moment is an opportune time for the private sector to step up and start investing in promising companies coming from Start-Up Chile.
Although the focus of the program remains the same, Start-Up Chile will now play a more proactive role in bridging the early seed gap and in helping the shining stars from each generation SCALE from Chile into the world.