ngine for the casual wine drinker. In this article, originally posted at easyvino.com, Hugo explains why Easy Vino decided to apply for Startup Chile. He also includes some great advice for fnMembers considering application to Startup Chile.
Last week I promised I’d go into more detail about our decision to apply to Startup Chile. First off, let’s look at the numbers:
- A government-run program, it plans to bring 1,000 startups to Chile by 2014
- 1509 startups applied to this edition, 101 startups were chosen
- 37 different countries will be represented
- $40K equity-free seed money
- 6 months in Santiago to develop product and grow your business
Let’s first address the elephant in the room. For an early stage startup, it’s hard to refuse equity-free money. When that money means 6 months of runway, risk free, in a dynamic environment, plus access to mentors, then it’s almost impossible to resist.
The trick is, they don’t just give you $40K, they reimburse expenses up to $40K, which means you need to have a plan to spend that money. And we did have a plan, and that’s why it made sense for us. Here’s why:
- Team. One of the hardest and most crucial things that a startup needs is to build is a strong founding team. Six months living in the same place, breathing the same air, bouncing off ideas, debating business models are the best possible scenario to build a strong team. It can make it or break it but at least you’ll know if the chemistry is there and there’s enough time to fix possible missteps.
- Recruiting. I was surprised with how many people actually know the program, and particularly in the tech world I found it being as powerful a recruiting tool as any top tier incubators.
- Product. The big advantage of going to Chile is that we know what your goals are and we have a single focus – our company. It’s an opportunity to run away from distractions and iterate real fast. Granted there will be plenty of program-related events and networking, but it’s all related with the one thing we went there for – Easy Vino.
- Pilot. Despite being in Chile, we will still be focused on building our pilot in California, and more specifically in Palo Alto and San Francisco. We would not leave for Chile without making sure that we could maintain a strong presence and build on the work we’ve done so far.
With everything in place, we’re starting to pack up. It starts in October and we are incredibly excited.
- It works if you have a plan and a team. Just going there won’t help much.
- It only works for specific stages and situations. Startups that are in early stage, pivot or planning to expand to South America will probably benefit.
- You’ll need some cash upfront, not only because the first reimbursement won’t come until midway through the program, but they also expect you to cover 10% of all expenses (so you need to spend $44k in order to get the full $40k back).
- It provides a connection with the local startup ecosystem.
- It provides a connection with investors through demo days.
- It provides access to inexpensive local talent.