Europeans are well aware of one of the most successful European Program in education, the Erasmus Program. It provides grants to students to study in another country in Europe for a year. Over 2980 institutions in 33 countries are involved in that program today. The 25 year-old program now has a competitor of a new kind. This time it’s not about studies, it’s about entrepreneurship.
Start-up Chile was launched in 2010 by The Chilean Economic Development Agency. The principle is the following: Welcome Entrepreneurs from all over the world, providing them with Working permits, network, workspaces… oh yes and US$40,000.
The Start-up Chile Program
A few figures might be better to understand it:
– Started in 2010
– 600+ entrepreneurs welcomed and funded Increase of 80% of applicants in 3 years
– 6-month program, over 40 nationalities
– Chileans participation increased by x 3.7
– US$ 40,000 per start-up, equity-free
A light series of requirements are asked to applicants:
– Anyone can apply for the program, either Chilean or foreigner (10% of Chileans in 2010, 37% today, in constant increase)
– Very early-stage start-ups are accepted
– Two main areas of evaluation:
– Personalities in the team (background, network)
– Then the project: either focused on Latin America or with a global reach
An exciting list of incentives and benefits:
– US$40,000 in cash, equity-free. Start-Up Chile does not own any share in the incubated start-ups. The cash must be a coverage of expenses. Each expense is controlled by an accountant
– Access to two workspaces, one sponsored by a Chilean telecommunications company, the other provided by Start-up Chile, free of access for incubated start-ups and alumni
– 1-year Chilean working visa delivered to all the members of the teams
– Start-Up Chile also organizes a lot of events connecting start-ups and influent people: Phil Libin, Evernote’s CEO, talked during a Demo Day, gathering the top-15 start-ups of a generation for pitches
– A generation is 6 months(longer than the usual accelerators)
Lots of rights, fewer duties:
– Start-up Chile asks its entrepreneurs to help the Chilean entrepreneur community develop itself, with 40 hours within 6 months of conferences, mentoring or organizing events (hackathon)
– In return for cash, start-ups must spend at least 10% more, therefore US$4,000
– At least one member of the team must be in Chile for the whole length of the program
Boyd Jones, Evaluator and jury for the selection of applicants, explains that “the whole process is done online. Teams apply online, then a pool of judges vote for the projects they want to see in Start-up Chile. The process is entirely outsourced and managed internationally.”
Comprehensive Immigration policy included
The program has been lauded in Forbes, The Economist or INC. magazine and is often considered as a revolution in terms of incentives. The focus on immigration is also very innovative. When the US and Taiwan are facing their talent immigration reforms, Chile offers a one-year work permit to any entrepreneur accepted to the program, which lasts 6 months. This comprehensive program appears to be a great success for the Chilean Government.
Why Start-up Chile is a success for the government?
Developing a flourishing start-up eco-system in the country. The number of Chileans in the program has increased from 10 to 37% in only 3 years. Slightly entrepreneurship introduces itself to the Chilean Community.
…As the innovation hub in Latin America, competing with bigger countries such as Argentina or Brazil, with an advantage for Chile, as the program is internationally exposed.
A campaign way less expensive than other campaign ads or programs such as Start-up Britain, even generating an interesting return on investment.
“They gave us $40,000 to start. In the last few years, we have easily put that money back into the economy by a factor of 15 — not to mention social capital. I hope that continues to grow as we hire more Chileans and do work in the country”, Said David Lloyd, founder of the Intern Group, entrepreneur at Start-up Chile.
Attracting investors to Chile
Welcoming +600 entrepreneurs with strong background and ambitions might lure Venture Capitalists from all over the world.
Julien Deveaux, CPO at Cottontracks, sums up simply Start-up Chile to this:“The program is really perfect if you have a very early-stage start-up as ours or if you are focused on the Latin-American market. (…) The program is quite “hands-off”, there is no mentoring (or few) for startups or weekly meetings to prove the advancement of the project. The very goal is to attract young ambitious start-ups in Latin America.”
A Taiwanese “Start-up Chile?”
For 5 seconds we dreamed about a Start-up Taiwan, sharing its amazing incentives, and focused on hardware (3D printing and all type of devices able to accompany the software’s evolutions).
That would be the “Made in Taiwan” comeback, with the rebirth of Taiwanese world-class manufacturers. If Taiwan is a country of hardware, as most of the entrepreneurs we met agree on, then let’s use this competitive advantage to further market Taiwan as The place to do hardware in the world.
Is the country ready to welcome foreigners from all over the world bringing their ideas and ambitions? Is it then ready to give them money? Does Taiwan understands the value of what foreign entrepreneurs can bring in Taiwan? That is the whole point. Chile did, successfully.