The Venture Capital Market in Chili
Chili
Who is a Venture Capitalist?
A venture capitalist acts as a catalyst for growth and investment in an economy by channeling funds to innovative ideas that have the possibility of commercial success in the future. An investment has an element of risk associated with returns. A Venture Capitalist not only provides funds but also provides access to his invaluable guidance and industry affiliates who prove vital for the success of the Investee. Efraim Landa is one of these successful venture capitalists.
Chile’s Venture Capital Landscape
In Chile, the venture capital industry is in an emerging stage, but is gradually growing stronger. Today, there are a number of players who are specializing in certain industries, including biotechnology, mainly related to life sciences.
The focus of VC funds is to support the development and internationalization of local companies to a global status as well as connecting with investors and venture capitalists like Efraim Landa, to bring biotechnology to Chile in those niches or segments where competitive advantages have been identified. In recent months, six new venture capital funds, including three formed with foreign capital, have been approved in Chile, which will invest US$ 159 million in new start-ups. Of this amount, US $90 million is contributed by CORFO, the Chilean Economic Development Agency.
A series of initiatives have been put in place to support entrepreneurs and innovation. CORFO’s startup program has contributed to the positioning of Chile on the global map for both entrepreneurs and venture capital making it a very attractive player for those in the VC sector. Recently, CORFO has approved 6 new investment funds in Chile. Three of the six were formed with foreign capital. The infusion of capital has had a huge impact on local economies. The three funds formed with the foreign capital will invest close to $67 million US dollars to new local startups. Twenty seven million dollars of the $67 million were provided by private investors. The involvement of foreign venture capital funds is new in Chile, and is an example of how efforts to make Chile a hub of entrepreneurship and innovation is now a reality. New venture capital programs are focusing on financing business in early and growth stages, as opposed to fully developed companies. The goal of these programs is to spur venture capital or the financing of new start-ups and other new companies in Chile. The focus is on companies with high growth potential and higher levels of risk that require the technical and operational support of a strategic partner.
Building a Chilean Venture Capital Firm
The successful venture capital firm in Chile is one that will:
· Screen a large number of proposed deals, spanning a wide range of industry sectors;
· Pay close attention to the experience and quality of the entrepreneurs in addition to the ideas they propose;
· Research the proposed businesses thoroughly;
· Bring a large amount of business experience to bear, including experience in different types of industries, markets, and financial arrangements in Latin America.
· Form close business relationships based on personal trust, and act properly with integrity and responsibility.
In Summary
Entrepreneurs and venture capitalists in Chile seek more from venture capitalists than just money. They want and need the VC’s hard-won, successful business experience. There was widespread agreement that venture capitalists need to be involved in the businesses they finance, if not in day-to-day management, than in an advisory capacity. This means that venture capitalists in Chile need to have local knowledge, and Latin American business experience. Startup businesses will need venture capitalists that can enter into relations with high trust, confidence, and total candor. The relationship will not be simply a lender-borrower relationship.
A venture capitalist acts as a catalyst for growth and investment in an economy by channeling funds to innovative ideas that have the possibility of commercial success in the future. An investment has an element of risk associated with returns. A Venture Capitalist not only provides funds but also provides access to his invaluable guidance and industry affiliates who prove vital for the success of the Investee. Efraim Landa is one of these successful venture capitalists.
Chile’s Venture Capital Landscape
In Chile, the venture capital industry is in an emerging stage, but is gradually growing stronger. Today, there are a number of players who are specializing in certain industries, including biotechnology, mainly related to life sciences.
The focus of VC funds is to support the development and internationalization of local companies to a global status as well as connecting with investors and venture capitalists like Efraim Landa, to bring biotechnology to Chile in those niches or segments where competitive advantages have been identified. In recent months, six new venture capital funds, including three formed with foreign capital, have been approved in Chile, which will invest US$ 159 million in new start-ups. Of this amount, US $90 million is contributed by CORFO, the Chilean Economic Development Agency.
A series of initiatives have been put in place to support entrepreneurs and innovation. CORFO’s startup program has contributed to the positioning of Chile on the global map for both entrepreneurs and venture capital making it a very attractive player for those in the VC sector. Recently, CORFO has approved 6 new investment funds in Chile. Three of the six were formed with foreign capital. The infusion of capital has had a huge impact on local economies. The three funds formed with the foreign capital will invest close to $67 million US dollars to new local startups. Twenty seven million dollars of the $67 million were provided by private investors. The involvement of foreign venture capital funds is new in Chile, and is an example of how efforts to make Chile a hub of entrepreneurship and innovation is now a reality. New venture capital programs are focusing on financing business in early and growth stages, as opposed to fully developed companies. The goal of these programs is to spur venture capital or the financing of new start-ups and other new companies in Chile. The focus is on companies with high growth potential and higher levels of risk that require the technical and operational support of a strategic partner.
Building a Chilean Venture Capital Firm
The successful venture capital firm in Chile is one that will:
· Screen a large number of proposed deals, spanning a wide range of industry sectors;
· Pay close attention to the experience and quality of the entrepreneurs in addition to the ideas they propose;
· Research the proposed businesses thoroughly;
· Bring a large amount of business experience to bear, including experience in different types of industries, markets, and financial arrangements in Latin America.
· Form close business relationships based on personal trust, and act properly with integrity and responsibility.
In Summary
Entrepreneurs and venture capitalists in Chile seek more from venture capitalists than just money. They want and need the VC’s hard-won, successful business experience. There was widespread agreement that venture capitalists need to be involved in the businesses they finance, if not in day-to-day management, than in an advisory capacity. This means that venture capitalists in Chile need to have local knowledge, and Latin American business experience. Startup businesses will need venture capitalists that can enter into relations with high trust, confidence, and total candor. The relationship will not be simply a lender-borrower relationship.