Chile has historically been a country where the economy was based on industries such as fishing, metals and goods, like paper. But eight years ago, that changed.
The Chilean government (Ministry of Economy & Corporación de Fomento de la Producción de Chile, CORFO) launched Start-Up Chile (SUP), a public start-up accelerator to attract foreign talent, high-potential entrepreneurs and new innovative companies.
Start-Up Chile was also founded to increase the international business profile of Chile. Since its inception, the program has promoted more than 1,000 start-ups from over 85 countries. The continuing goal of SUP is to ensure that Chile remains a world hub for technological enterprises.
Impact on the world
Start-Up Chile was the first program of this kind in the world, spurning the creation of similar programs in over 50 other countries. It's influence and success has inspired other countries to embrace start-ups in the same fashion. Chile welcomes all entrepreneurs, which was not found in the original start-ups in America.
Start-up Chile is structured in a way that is different than most other public accelerator programs. While it is tied to the government, the program operates as a separate entity. This protects the program from changes in government and policies. Start-up Chile offers benefits such as equity-free funding, soft landing, access to a co-working space, and a one year working visa. In return, entrepreneurs are asked to be involved in social impact activities and mentoring. SUP invented a scoring system, called Return Value Agenda, to measure the social impact that each entrepreneur generates when they interact with the local community in Chile. Some of the projects include organizing keynote addresses, workshops, mentorships and events related to entrepreneurship and innovation. The program can change the Chilean culture, through showing that entrepreneurs from all over the world have come to Chile to build their businesses but at the same time are influencing locals with a richer entrepreneurial culture. The mindset surrounding SUP encourages the businesses to not only build their presence in Chile but to think beyond the country to the region and outward to the rest of the world. This open outlook and diversity has increased Chile's standing abroad.
Results of SUP
In August 2017, a survey revealed over 1,600 start ups have used the program and have shown a survival rate of almost 80%, with sales totalling USD 691 million worldwide and USD 140 million in Chile.
While SUP provides the tools needed for entrepreneurs, there has been much success for the individual companies. One out of three start-ups were able to obtain funding and many also doubled their client portfolio with an average of 500 new clients or users of the start-up's products.
Programs like Start-Up Chile are the future in helping services and products to be launched into the market. Big corporations are partnering with start-ups to work together to solve pain points. Since the corporations don't have the time to keep up with the ever-changing trends and technological landscape, they can turn to the entrepreneurs who understand it well. Combining the market share that big corporations have with the innovative solutions with the flexibility of the start-ups there will be more opportunities for both groups.
Complying with obligations
Start-ups need to focus on developing their businesses and strategies which can cause other aspects like legal, corporate and tax regulations and requirements to fall to the wayside. If the start-up company grows to being sold or becoming public, they will have to ensure that they have been complying with these obligations from the start.
TMF Chile has more than 30 years of experience in assisting local and international clients in all aspects of starting and maintaining a business. We are the experts in accompanying start-ups from their creation through all stages of development, assuring them the highest standards of quality while helping them with their corporate, labour and tax compliance. If you are considering bringing your start-up to Chile, we can help, talk to us.
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