4 ms·

So question - I have seen this before and it is very intriguing. But the worry-wart in me says.. "Hmm what's the catch??" Does the local govt own a large piece

by mdink 16y ago

So question - I have seen this before and it is very intriguing. But the worry-wart in me says.. "Hmm what's the catch??" Does the local govt own a large piece of your startup? Can you leave anytime and take your company with you? I have seen other offers such as from Dubai, but they turned into horror stories. Now granted we are talking about 2 VERY different cities... help a skeptic out.. :)

nyellin 16y ago
The about page is very clear about the financial terms. It calls it "a $40,000 subsidy (no equity)" Also, here is an excerpt from TechCrunch's article on Startup Chile 2010 (formatting is mine): "Seems too good to be true, doesn’t it? No obligation to stay; no equity ownership in return for the money; no onerous contracts that promise a pound of flesh—as VCs typically demand. Why would Chile do this? Because they’re betting that if they get enough smart, talented people there, three things will happen: first, many of the entrepreneurs going there will fall in love with the country and decide to stay; second, they will enrich the local ecosystem by teaching local entrepreneurs about global markets; and third, their tech community will develop stronger links to the world. Who knows, a couple of startups may also hit home runs. After all, isn’t this how Silicon Valley left tech centers like Boston in the dust and became the world’s tech leader?" Source: http://techcrunch.com/2010/08/21/chop-shop-workers-and-bootstrappers-chile-really-wants-you/ http://techcrunch.com/2010/08/21/chop-shop-workers-and-boots... Disclaimer: I am not affiliated with Startup Chile in any way. Hopefully someone from the organization can answer your questions.
- jjm 16y ago
  It's up to 40k. There is also a schedule table which outlines what funds may be used for. A few things not accounted for is living expenses, food, medicine etc... (I could have read wrong, I'm not a lawyer). Now I believe that some incubators allow you to decide what you want to do with the cash, and place no restrictions on it. Then again, they ask for equity. My point is moving to Chile is a big deal, and you'll have expenses. It's cheaper than living in the US or Canada but not by THAAAAT much. Another point required in the docs is you must incorporate and leave your base of operations in Chile. The one big question I have is how is the talent pool If I setup shop in Chile? I don't want to outsource.
  - bobf 16y ago
    http://www.startupchile.org/what-does-the-subsidy-cover/ http://www.startupchile.org/what-does-the-subsidy-cover/ says the subsidy covers operations, living (housing, transportation, food), and HR costs associated with hiring.
  - trevelyan 16y ago
    I'm in the program and am happy to answer any questions. Short version is that this is very much the real thing. The expenses need to be reasonable (there is a nominal review process), but I haven't run into problems. You can expense most things except alcohol and cigarettes as long as they are related to the business. This includes giving yourself and your staff salaries of up to around $3k USD per month. So a team of two can rent a nice apartment, pay for airfare and insurance, and spend the remainder on personal salaries -- effectively paying themselves to start a business. Eating out costs about the same as the US and Canada, but cost-of-living is otherwise much lower. And Santiago is an amazing city. Chile has a smaller pool of technical workers than elsewhere, so you can work with people here but are probably best off being a developer. And there's no requirement to incorporate and leave your base of operations in Chile.
    - jjm 16y ago
      I hear what your saying, but I'm confused. The terms are at: http://www.startupchile.org/wp-content/downloads/terms_and_conditions.pdf http://www.startupchile.org/wp-content/downloads/terms_and_c... Particularly points 3.i, and 3.iii talk about incorporation in Chile as a requirement. 3.iii talks about the 'intention' of leaving operations in Chile. I've copy/pasted the section. It's pretty hard to develop and do CEO/partner duties at the same time, especially in such an early stage. In fact I would think doing the hustle is about as much time consuming as doing the dev work. Also, It's hard to tell Chile that your not going to hire anyone because you couldn't find anyone; while taking their money. For more specific note, if you look at the requirements (dinners, talks, evaluations, presentations, publications), I don't see you'd find time to do more than 20% dev work without hiring someone. I would love to take Chile up on their offer, and as a super hyper serious startup founder I'm excited BUT at the same time very weary of anything 'too good to be true'. Section 3 below: 3. RESULTS AND ANTICIPATED IMPACTS. At a minimum, it is anticipated that the Projects and their Participants: i. Are incorporated to the national entrepreneurship environment and execute their Project in Chile for at least 24 (twenty-four) weeks. ii. Carry out activities required for the fulfillment of the goals proposed in their Projects. iii. Are incorporated in Chile as formal companies, with the intention of leaving operations in Chile. iv. Contract local talent. v. Attend at least 70% of the events 3 of the Program. vi. Lead at least 6 (six) group workshops. vii. Attend meetings with potential investors with the intention of raising capital during their participation. viii. Participate as mentors of national entrepreneurs. ix. Create and publish 3 (three) notes in English on the basis of their experience in international media * Update: Edited for spelling mistakes.
bugsy 16y ago
The catch is that if you are successful, maybe you stay in Chile and hire local workers and pay taxes. Smart plan if you ask me. State governments in the US do this all the time but focus on attracting big industry and factories to bring jobs, with tens of millions spent just to bring in one company, free land sometimes, and giant tax breaks like no taxes paid for 10 years. Chile is applying this thinking to the micro side of things, small companies with high potential that don't require a lot of money to keep afloat long enough to get traction. Software companies as one example seldom have to build factories or require specialized toxic chemicals. They can be run out of an apartment, and can end up bringing in tons of money from other countries through sales of product and services. This is like y-combinator, but you don't sell equity, you get more than $17,000 (this year's special case excepted), you are living in a LOW cost area instead of a HIGH cost area. On the downside it will be more difficult to get venture capital and you pay more for computers and stuff because there is an import tariff. This plan has huge potential and will probably make Santiago into the next silicon valley. There are tons of states that have talked about creating a new silicon valley, and it is always nonsensical pipe dreams run by fools. This is the first time I have seen a plan laid out that has a very good chance of succeeding. Why on earth wouldn't ANY sane country want to import as many go-getting highly skilled young entrepreneurs full of energy as possible? It's always amazed me that other countries haven't figured this out, but they are often stuck fighting the last war in that 19th century factory mindset. Most countries have entrepreneur visas that require investments of millions of dollars, etc. That means they miss out on the giant growth that occurs when these tiny tech companies take off.
GFischer 16y ago
A former coworker emigrated to Chile from Uruguay, and he reports that it's by far the most progressive country in South (and probably Central) America... they have low taxes (in comparison to Brazil, Argentina or Uruguay), are far more advanced technologically and enjoy a higher standard of living. The government there does seem to "get it". There are, of course, several problems as in every Latin American country, but mitigated. I forwarded the link to several friends, some of which are thinking about starting their own company, and I'll strongly consider it as soon as I finish my Master's.
- DanielRibeiro 16y ago
  Not to mention that Chile is part of Mercosul, which makes it easier for south american enterpreneurs to move to Chile.
  - GFischer 16y ago
    It's not a full member (it's an "associated state"), but I do hope it gives us some advantages.
hankish 16y ago
I was very skeptical as well and applied almost as a lark. When we were accepted I was completely shocked. As others have said, they do NOT take any equity and they ask very very little of you while you're down here. Plus you are given tons of free resources to help you meet your goals. The "catch" is that you have to pick up your life and move to Chile for 6 months. For some this is very easy, but for most (myself included) it is more logistically challenging than one would assume. The important thing to remember is that the Chilean government is not doing this for job creation or direct financial return (their economy is strong), they are doing it to build out an international network and to encourage their own entrepreneurs to think more globally and take bigger risks. If you look at what they're spending ($10M to $50M USD) versus what they're getting, it starts to make more sense.

by mdink 16y ago

nyellin 16y ago

The about page is very clear about the financial terms. It calls it "a $40,000 subsidy (no equity)" Also, here is an excerpt from TechCrunch's article on Startup Chile 2010 (formatting is mine): "Seems too good to be true, doesn’t it? No obligation to stay; no equity ownership in return for the money; no onerous contracts that promise a pound of flesh—as VCs typically demand. Why would Chile do this? Because they’re betting that if they get enough smart, talented people there, three things will happen: first, many of the entrepreneurs going there will fall in love with the country and decide to stay; second, they will enrich the local ecosystem by teaching local entrepreneurs about global markets; and third, their tech community will develop stronger links to the world. Who knows, a couple of startups may also hit home runs. After all, isn’t this how Silicon Valley left tech centers like Boston in the dust and became the world’s tech leader?" Source: http://techcrunch.com/2010/08/21/chop-shop-workers-and-bootstrappers-chile-really-wants-you/ http://techcrunch.com/2010/08/21/chop-shop-workers-and-boots... Disclaimer: I am not affiliated with Startup Chile in any way. Hopefully someone from the organization can answer your questions.

jjm 16y ago
It's up to 40k. There is also a schedule table which outlines what funds may be used for. A few things not accounted for is living expenses, food, medicine etc... (I could have read wrong, I'm not a lawyer). Now I believe that some incubators allow you to decide what you want to do with the cash, and place no restrictions on it. Then again, they ask for equity. My point is moving to Chile is a big deal, and you'll have expenses. It's cheaper than living in the US or Canada but not by THAAAAT much. Another point required in the docs is you must incorporate and leave your base of operations in Chile. The one big question I have is how is the talent pool If I setup shop in Chile? I don't want to outsource.
- bobf 16y ago
  http://www.startupchile.org/what-does-the-subsidy-cover/ http://www.startupchile.org/what-does-the-subsidy-cover/ says the subsidy covers operations, living (housing, transportation, food), and HR costs associated with hiring.
- trevelyan 16y ago
  I'm in the program and am happy to answer any questions. Short version is that this is very much the real thing. The expenses need to be reasonable (there is a nominal review process), but I haven't run into problems. You can expense most things except alcohol and cigarettes as long as they are related to the business. This includes giving yourself and your staff salaries of up to around $3k USD per month. So a team of two can rent a nice apartment, pay for airfare and insurance, and spend the remainder on personal salaries -- effectively paying themselves to start a business. Eating out costs about the same as the US and Canada, but cost-of-living is otherwise much lower. And Santiago is an amazing city. Chile has a smaller pool of technical workers than elsewhere, so you can work with people here but are probably best off being a developer. And there's no requirement to incorporate and leave your base of operations in Chile.
  - jjm 16y ago
    I hear what your saying, but I'm confused. The terms are at: http://www.startupchile.org/wp-content/downloads/terms_and_conditions.pdf http://www.startupchile.org/wp-content/downloads/terms_and_c... Particularly points 3.i, and 3.iii talk about incorporation in Chile as a requirement. 3.iii talks about the 'intention' of leaving operations in Chile. I've copy/pasted the section. It's pretty hard to develop and do CEO/partner duties at the same time, especially in such an early stage. In fact I would think doing the hustle is about as much time consuming as doing the dev work. Also, It's hard to tell Chile that your not going to hire anyone because you couldn't find anyone; while taking their money. For more specific note, if you look at the requirements (dinners, talks, evaluations, presentations, publications), I don't see you'd find time to do more than 20% dev work without hiring someone. I would love to take Chile up on their offer, and as a super hyper serious startup founder I'm excited BUT at the same time very weary of anything 'too good to be true'. Section 3 below: 3. RESULTS AND ANTICIPATED IMPACTS. At a minimum, it is anticipated that the Projects and their Participants: i. Are incorporated to the national entrepreneurship environment and execute their Project in Chile for at least 24 (twenty-four) weeks. ii. Carry out activities required for the fulfillment of the goals proposed in their Projects. iii. Are incorporated in Chile as formal companies, with the intention of leaving operations in Chile. iv. Contract local talent. v. Attend at least 70% of the events 3 of the Program. vi. Lead at least 6 (six) group workshops. vii. Attend meetings with potential investors with the intention of raising capital during their participation. viii. Participate as mentors of national entrepreneurs. ix. Create and publish 3 (three) notes in English on the basis of their experience in international media * Update: Edited for spelling mistakes.

bugsy 16y ago

The catch is that if you are successful, maybe you stay in Chile and hire local workers and pay taxes. Smart plan if you ask me. State governments in the US do this all the time but focus on attracting big industry and factories to bring jobs, with tens of millions spent just to bring in one company, free land sometimes, and giant tax breaks like no taxes paid for 10 years. Chile is applying this thinking to the micro side of things, small companies with high potential that don't require a lot of money to keep afloat long enough to get traction. Software companies as one example seldom have to build factories or require specialized toxic chemicals. They can be run out of an apartment, and can end up bringing in tons of money from other countries through sales of product and services. This is like y-combinator, but you don't sell equity, you get more than $17,000 (this year's special case excepted), you are living in a LOW cost area instead of a HIGH cost area. On the downside it will be more difficult to get venture capital and you pay more for computers and stuff because there is an import tariff. This plan has huge potential and will probably make Santiago into the next silicon valley. There are tons of states that have talked about creating a new silicon valley, and it is always nonsensical pipe dreams run by fools. This is the first time I have seen a plan laid out that has a very good chance of succeeding. Why on earth wouldn't ANY sane country want to import as many go-getting highly skilled young entrepreneurs full of energy as possible? It's always amazed me that other countries haven't figured this out, but they are often stuck fighting the last war in that 19th century factory mindset. Most countries have entrepreneur visas that require investments of millions of dollars, etc. That means they miss out on the giant growth that occurs when these tiny tech companies take off.

GFischer 16y ago

A former coworker emigrated to Chile from Uruguay, and he reports that it's by far the most progressive country in South (and probably Central) America... they have low taxes (in comparison to Brazil, Argentina or Uruguay), are far more advanced technologically and enjoy a higher standard of living. The government there does seem to "get it". There are, of course, several problems as in every Latin American country, but mitigated. I forwarded the link to several friends, some of which are thinking about starting their own company, and I'll strongly consider it as soon as I finish my Master's.

DanielRibeiro 16y ago
Not to mention that Chile is part of Mercosul, which makes it easier for south american enterpreneurs to move to Chile.
- GFischer 16y ago
  It's not a full member (it's an "associated state"), but I do hope it gives us some advantages.

hankish 16y ago

I was very skeptical as well and applied almost as a lark. When we were accepted I was completely shocked. As others have said, they do NOT take any equity and they ask very very little of you while you're down here. Plus you are given tons of free resources to help you meet your goals. The "catch" is that you have to pick up your life and move to Chile for 6 months. For some this is very easy, but for most (myself included) it is more logistically challenging than one would assume. The important thing to remember is that the Chilean government is not doing this for job creation or direct financial return (their economy is strong), they are doing it to build out an international network and to encourage their own entrepreneurs to think more globally and take bigger risks. If you look at what they're spending ($10M to $50M USD) versus what they're getting, it starts to make more sense.