2 weeks ago I had to be an orator in an event about entrepreneurship in Chile, organized by Wayra (accelerator of Telefónica). It is always motivating to see young people with ideas and desires who want to do different or better things in Chile. They are the future of our country.
In Chile there is a growing community of entrepreneurs, investors, government entities and universities that is trying to change the direction of our oligopolistic economy. Our export matrix has practically not changed in the last 10 years, and we are still a commodity country (highly dependent on copper, and natural resources). With the current decline in the price of copper, the country is going through a bad time. There is tremendous pressure on the fiscal accounts. Large mining companies have been affected, affecting the entire value chain of this industry, driving an increase in unemployment.
Almost 20 years ago Corfo began to promote and finance venture capital in different stages to encourage investment and innovation in companies with high export potential and to achieve the desired diversification. Currently, the flagship program of Corfo called Start-up is known worldwide and has almost 1000 alumni who have developed business models with state funding.
However, the truth is harder. From the almost $ 300 billion that exists in venture capital funds (funds that invest in early stages of the companies), all have Corfo financing, meaning the private sector hedges with public investment, given its risk aversion. There are approximately 30 venture capital funds that have made more than 100 investments in companies, of which there are no cases of remarkable success.
It is considered a success story, business that have escalated (that is, are present in several countries), having a business model that generates positive cash flows, having several rounds of investment (at least 3 or 4), and are preparing to make an IPO (offer of shares in a capital market).
The lack of depth of the capital markets in Latam, a culture of aversion to risk and failure, unsophisticated investors, entrepreneurs with a lack of managerial skills, are impacting on the urgent need to create new businesses and services for our country.
It is essential to have a long-term strategy (independent of the government in office), to teach at, school level, about failure and entrepreneurship, to attract international funds, to benchmark with successful countries (Israel, etc.), to empower new generations in Chilean economic groups who understand the value of innovation, make exchange agreements and train professionals and scientists with leading universities in innovation (MIT, Stanford, Michigan, Harvard, Caltech, Berkeley, etc.).
Partner – Fix Partners Consulting