On $20 million Peruvian Government funding a la Startup Chile

Yesterday The Next Web has featured an article where it announces the preparations for a $20 million funding program for Tech Startups sponsored by the Peruvian government. This is certainly great news for all people in the technology community in Peru (whether there’s one or not it’s up to the reader).

The real fact is that in the last 10 years the availability of funding is certainly increasing in Peru. Government programs such CONCYTEC‘s FINCYT and INNOVATE PERU have been granting funds for technology-related endeavors. Telefonica’s Wayra also have extended checks to more than 20 new startups in the last 18 months. There’s a increasing number of participants and a formed community around LimaValley, which I had the honor to found and help to grow few years ago.

From a founder perspective the more funding options we have, the more things we can do. While this new program is still in the early stage, government’s official Magali Silva have just announced that part of this budget will be used to organize a huge campus party. The size of the fund ($20M – huge-campus party-expenses) and the way the funding will be granted is unknown to date.

Now, since the role model will be Startup Chile. I find very interesting the fact that our government will be willing to grant money to foreigners that want to develop their businesses from Peru. I expect this program to be more flexible than the current ones with regards to software startups (this is material for another post). In the case of this happening it will certainly make our current tech scene move from infancy towards maturity. Currently, even there were a lot of applications to programs such Wayra (more than 1k), I find the number of those endeavors doing any progress as businesses very small. I mean, if there are 1k projects we should have at least 1% of them trying to bootstrap and become real businesses, whether there is funding or not.

Becoming a real business is hard. Having a business plan is something I see most people not having prior to starting a company. A business plan is not nicely printed pieces of paper, but the way the company will make money. Companies are born to make money. You should know how your company will turn the offering into money. Whatever you mix to get it there is a mere execution of this plan, not the business itself.

The Economist also have featured recently Vivek Wadhwa’s book “The Inmigrant Exodus”, where he elaborates on the dynamics and the importance for a country to attract foreign talent. There’s a debate in the US about the matter. However, I’d like to quote the last paragraph, since it’s related to a more “known” case that our government is looking to replicate: the Startup Chile program.

Santiago is hardly a paradise for entrepreneurs. Chile’s domestic market is small, its bankruptcy law punitive. Private venture capital is still rare and credit costly. In a sad irony, Chilean bureaucrats are trying to shut down a low-interest lending market set up by the founder of Start-Up Chile. And although the programme to attract foreign entrepreneurs is promising, other government initiatives in that area—such as offering $40,000 grants to start-ups—are less sensible.

Still, the main lesson from Chilecon Valley is that clever people have choices. America ought to be winning the global war for talent, but thanks to its immigration rules, it is fighting with both hands cuffed. Presidential candidates, take note.

So, I’m certainly looking forward the upcoming events and the maturation of our ecosystem. I’d like to see more startups becoming real businesses, not side-business or just nice tech projects. I’d like to see more companies having revenue and profits. I’d like to see more companies targeting and winning in real markets trough innovation. This will attract more talent and funding to our ecosystem. I find Denken über’s post “vivir de premios” (spanish) very similar to what is happening to some projects in Peru.

  • Probal DasGupta

    Any further developments on the Start-Up Peru initiative?

  • http://stone-head.org Rudy Godoy

    The program was suposed to launch a series of events this year, but none of them happened yet. However, for what I know they have been reworking the program to make it more attractive to foreigners. I think we’ll have news in the next three months. I’ll keep you posted on this.