Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

On (Startup) Chile

hervalicio.us

Post reply on HN
Print view View original

21–30 of 60 posts

Re: On (Startup) Chile

#21

Post by rubyrescue »

andrewcooke wrote: post #19
rubyrescue wrote: post #18

Earlier quoted context omitted.

I don't think it's a spoiled brat mentality. It's the difference between what Startup Chile appears to be and what it is. The pitch is it's a 40k grant. The reality is it's a 40k credit and anyone who doesn't really understand latin american bureaucracy doesn't know what they're getting into. I live in Argentina and deal with mind-numbing bureaucracy every day and I have warned some people to be careful before they a…

i'd be careful in extrapolating too much here. the cultural differences between argentina and chile are significant. for example, on the index of economic freedom, chile ranks 11 (just 2 below the usa at 9) while argentina is 138. similarly, on the corruption expectation index, chile ranks 22 (slightly above the usa at 24) while argentina is 100. those are huge differences - please don't tar chile with argentina's pr…

except that what the OP writes is what i experience anytime i want to pay for something with my SRL, renew my DNI, etc.... the cultural differences are of course vast, but in terms of government bureaucracy - they are strikingly similar.

Re: On (Startup) Chile

#22

Post by mguimaraes »

I came from the same country as Herval (Brazil) and I am flying to Chile on the 4th of January. Myself and my partner are working hard on bootstrapping our 2nd company for the last 1 1/2 year. We are very fortunate to have landed big contracts in Brazil this year. We will keep a commercial operation in Brazil. I can point out wonderful reasons to do business in Brazil: - Very large market, 200M people - Booming consumer market - Internet penetration, 70M - Mobile phone penetration, > 200M - Engaged social media users - Beautiful woman and beaches ;-) - More VC capital than in Chile .But there are several restraints here: - Highest interest rate in the world (11% year, in practice more than 28%) vs 3,5% in Chile - One of the worst countries in the world to employ people, according to Employing Worker Index Brazil ranks at 120th position vs 69th for Chile - Nothing similar to SUP in Brazil - One of highest taxes in the world totalizing 35% of GDP vs 18% in Chile - Very corrupted - There are in Brazil a few serious, honest and friendly venture capitalists, but Brazil is also crowded with crippled VC´s, angel investors that never invested in anything (whenever you meet one, ask them what were their last 3 investments).

(for a complete comparison look at http://www.heritage.org) So, reading Herval post I got concerned but, what he describes is pretty much what we have 'for lunch' in Brazil everyday. Sounds to me like a shallow analysis. I can live with those issues, those seems to be like micro issues that can be, at some point, fixed. What I would like to hear from the author or from someone else is if, compared to Brazil, Chile is a good place to set up a business that targets LATAM? How do those incredible better economic indicators (again, when compared to Brazil) impact your business and your life in the LONG-TERM? Did you think about the long term perspective of having your headquarters in Brazil vs Chile?

Re: On (Startup) Chile

#24

Post by rabble »

I've not done business in Chile, but i have in Uruguay, which ranks about the same in terms of various transparency / economic freedom / gdp per capita as Chile. Everything he complains about is just the reality of living and working in latin america. Chile markets itself as being different, but it's not so different. Getting stuff done is hard, getting investment is hard, doing business is hard. There are lots of rules and red tape. It's just a part of the game.

Re: On (Startup) Chile

#25

Post by hexis »

ew wrote: post #10
ojbyrne wrote: post #2

This is sad, if true (and it kind of rings true). As soon as I saw the reimbursement policy I got the sense that the program would be bullshit. I'd love to hear otherwise.

The program is not bullshit, it's just that the government isn't in the business of throwing money away. There a lot of legitimate startups here that have gone from an idea to a proper product with actual customers. There is, however, a lot of red tape to cut through in order to ensure that money is spent properly, that's why there's so many rules. It would look really bad if the government of Chile was seen to be fu…

"it's just that the government isn't in the business of throwing money away"

In all seriousness, this is why they shouldn't be investing in startups. Early stage investing is all about "throwing away" a bunch of money and (hopefully) making even more back when a subset of your portfolio wins big. If you're micromanaging each dollar/transaction, then you're really, really doing it wrong.

Re: On (Startup) Chile

#26

Post by trevelyan »

ojbyrne wrote: post #2

This is sad, if true (and it kind of rings true). As soon as I saw the reimbursement policy I got the sense that the program would be bullshit. I'd love to hear otherwise.

Startup Chile is fantastic. The program helped us double sales and expand our product line far in advance of what we could afford. It was a life-changing experience for my girlfriend who now wants to start her own business instead of working for someone else. And it took away a lot of the drudgery of starting up a company. We got the chance to live in a great apartment with a view of the Andes, eat well, socialize with many smart people, and even travel to places like San Pedro de Atacama to see the stars.

The recurring complaints you'll read are from people trying to spend the absolute minimum and running into problems. They are honest and thus reasonable, but without explicit numbers it is also hard to put them in perspective and judge the program. I think most participants will be very upfront in telling applicants they need to plan to spend more than 4k to take full advantage of the program. In our case we needed to submit around 7-8k in expenses to get the total 42k grant over about nine months. But if this is bullshit I would like to signup for more of it. My costs are at least 3k a month outside Chile. 1k a month is nothing. For teams of 2-3 people to complain about that given all of the advantages strikes me as lacking in perspective.

As far as the availability of funding, I know more people who have taken funding in Chile than have taken it in China where my business is ostensibly based. That said, the point of Startup Chile is not that you are promised future funding or that Chilean VCs offer great valuations (I had very little contact with them beyond some unsolicited emails). That seems to be a very American thing as with YC and TechStars. The point is that you DO NOT GIVE UP EQUITY during a period of high uncertainty while you iterate towards product-market fit. Anyone who can't raise funding on much better terms after participating probably doesn't have a very fundable business.

Re: On (Startup) Chile

#27

Post by fapi1974 »

I thought I'd put in a note about my experience with a comparable program in Singapore called iJam. A very similar thing, though at the time it didn't include office space or travel expenses - basically a government managed micro-grant of $30,000, repayable only if you make $2MM in revenue.

I was also very frustrated by the amount of bureaucracy and the difficulty in getting payments - much of the time whether or not payments made it through was based on personal relationships. In fact at one point our payments were suspended simply because one of the advisors on the review committee didn't like us. In the end we got our cash - but lost a lot of time and ultimately didn't find it to be worth it. A better approach for us would have been to find a supportive early investor.

However, all of that said - even in Singapore, with its reputation for completely clean government - the program was riddled with conflicts of interest, double dipping, and other problems that led to a fair bit of controversy. So I understand the need to put stricter controls on how the money is doled out.

Net - this isn't so much about Chile, but rather about governments trying to be investors - they can't move quickly, they are not profit motivated, and they tend to rely on relationships rather than merit in the absence of clear guidelines.

I'm hopeful that the Chileans will figure out a clean set of rules that apply to everyone equally which will make equitable the tradeoffs between the free money and the pain of dealing with some bureaucracy.

Re: On (Startup) Chile

#28

Post by ew »

hexis wrote: post #25
ew wrote: post #10

Earlier quoted context omitted.

The program is not bullshit, it's just that the government isn't in the business of throwing money away. There a lot of legitimate startups here that have gone from an idea to a proper product with actual customers. There is, however, a lot of red tape to cut through in order to ensure that money is spent properly, that's why there's so many rules. It would look really bad if the government of Chile was seen to be fu…

"it's just that the government isn't in the business of throwing money away" In all seriousness, this is why they shouldn't be investing in startups. Early stage investing is all about "throwing away" a bunch of money and (hopefully) making even more back when a subset of your portfolio wins big. If you're micromanaging each dollar/transaction, then you're really, really doing it wrong.

You do realize that VC funds try to invest in startups that have that 1/10 chance of being a massive success. They don't wilfully throw their money at 9 crappy businesses that they don't think will succeed and really just hope for the 1 they think will do ok. It's simply a reality that you can't have 10/10 startups all succeed so they accept the odds.

Saying investing in startups is all about "throwing away" a bunch of money isn't at all accurate.

The government of Chile isn't looking for a cash return on their investment, they're interested in the long term effects of having globally oriented entrepreneurs in the country interacting with future local entrepreneurs.

Re: On (Startup) Chile

#29

Post by nirvana »

We're preparing to move to Chile in February to start as part of the next class. I see a couple of these blog posts along the lines of "well my 6 months are up, I'm outta here!". That seems like such a tragedy to me.

I've been to Chile before, Santiago is a wonderful city. We had only a few weeks in the country, but in that time we saw a little of the area and even went to Easter Island (which is part of Chile.) There's whole regions of Chile we didn't get to see, such as the high desert, punta arenas, etc.

SU Chile gets you a 1 year visa, and se we're planning to spend at least a year in Chile (they said they can help with renewal so we might stay 2 years even.) And while we're going to be working really hard on our startup I can't imagine a better place to do it than a county where stepping out of your door to go to dinner and suddenly you're on a foreign vacation for the evening!

I hope everyone whose considering going to Chile will also consider staying longer than 6 months. If your startup is internet or software based, you don't really need to come back to your home country right away, do you?

But looking at just that visa, there are so many moving parts we have to get aligned to get that visa. Its really no big deal in terms of visas on the global scale-- imagine trying to get a 1 year visa that lets you work in the USA! Much, much harder. So, bureaucracy is involved in the visa, and the reimbursement process.

The thing is, TANSTAAFL (there ain't no such thing as a free lunch). They don't take equity, but they want you to help the with their project. That's fine, part of our business plan is helping build a community of independant startups anyway, we've got no problem doing that. But that's how we "pay our way".

With expenses, every expense is different, and so, of course, some expenses might be approved for some people but not for others-- some people might forget to get receipts or might make an other error. The bigger question is whether the rules are straightforward, comprehensible and clear. Or not.

Maybe it would be better if the program worked as a grant, and they gave each startup $6,500 a month just as a check to spend as the startup wishes. The thing is, that would run the risk of scary stories like "These drunken 20 year olds from Amsterdam came to Chile and bought drugs with government money!!!" (or maybe not, don't know if they have tabloids in chile.) So, government money, government bureaucracy.

I havent' heard anyone say that they were cheated by SU Chile... and with any reimbursement system, you have to expect there will be imperfect coverage. Someone else commented that they spent $7-8k over the 6 months (with the rest covered by SU Chile reimbursements) -- that's a hell of a low burn rate!

So, maybe you could theoretically live in Chile on the $40k and have it all be reimbursed, but expecting that seems silly.

Re: On (Startup) Chile

#30

Post by nirvana »

ew wrote: post #12
crcsmnky wrote: post #6

While the reimbursement policy is certainly (quite) troublesome and extremely annoying, I'm more concerned about the climate/environment in Chile once the program ends. More countries need to foster entrepreneurial endeavors with a solid mix of residents and non-residents (almost like an exchange program) to get a better global mix of problem/market/solution. Startup Chile appears to be a good first step at addressin…

As it stands I have little (actually zero) incentive to stay here after January. I'm distanced from my partners, friends, family, and investors who actually spend their money. I'm also not interested in spending 3 months, and a lot of money, incorporating a company here when I already did it in less than 24 hours back home in Canada.

Why would you need to incorporate in Chile in order to stay? The initial visa is for a year, right? I'm curious because we're planning to stay the full year, and may stay a second year if we can get a renewal.
Post reply on HN