SECTION 1: MANDATORY TECHNICAL GUIDELINES
1.
BACKGROUND INFORMATION
Start-Up Chile is a pilot initiative prepared jointly between the Ministry of Economy, Development and Tourism, the INNOVA CHILE Committee of CORFO and the Ministry of Foreign Relations. It is framed within the programmatic goals of the development of innovation and entrepreneurship in Chile, in particular, that of promoting Chile abroad to attract and repatriate world class human capital and incentivize the installation of entrepreneurship with high global potential in Chile. The offer is to show Chile as a platform country, suitable for initiating entrepreneurial activities. This will be complemented with benefits of temporary residence visas, a subsidy of Innova Chile and support and access to local talent and networks in Chile to trigger a significant flow of entrepreneurs with global potential within Chile. The successful cases of entrepreneurs who start up their company in Chile will permit the scaling of the program, which in turn will position Chile as a “hub” of innovation and entrepreneurship in Latin America. 2. OBJECTIVES 2.1 General Objective •
Attract and retain world-class human capital; that will initiate high potential growth projects aimed to expand into global markets thereby strengthening the local entrepreneurial environment and supporting the culture of innovation in Chile. By connecting Chile with local and international entrepreneurial networks Chile will become the innovation hub of Latin America
2.2 Specific Objectives i. Attract and retain up to 300 high potential growth projects during 2011 ii. Enhance the interaction of foreign networks to gain access to skills and knowledge transfer from selected entrepreneurs to local entrepreneurs and their environment. iii. Connect entrepreneurs in the national environment with centers of innovation worldwide 3. EXPECTED PROGRAM RESULTS AND IMPACTS Upon finalizing the Program, we expect the entrepreneur(s) should achieve some of the following results:
i. ii. iii. iv. v. vi. vii. viii. ix.
Have Incorporated themselves into the national environment and have executed their project in Chile for at least 24 (twenty four) weeks Have performed activities necessary to fulfill the goals set for their projects Incorporated in Chile as formal businesses, with an intention of leaving operations in Chile Hired some local talent Have attended at least 70% of the Program events Led at least 6 group workshops Attended meetings with potential investors with the intention of raising capital for their project Have participated in being mentors for local entrepreneurs Have developed and dispersed 3 articles in English in the international press about their experience in the program
4. BENEFICIARIES Any and all individuals over the age of eighteen may apply to the competition, including residents of Chile, who are founders or owners of their companies, and who wish to implement a global project using Chile as a platform. All applicants will be judged under the same criteria. 5. PROGRAM CONTENTS Applicants shall present information about the following: Participants • • • • •
Education and technical experience Employment History Dedication to their project Team Development Motivation to develop their project in Chile
Project • • • • •
Product or Service Description of the competition and their differentiation Commercial strategy Barriers to entry and to exit Progress of the company to date, and their planned progress during their stay
Market • • •
Challenge or opportunity your project addresses Objective market and its size Position in the market
Environment • • •
Location Participation in organizations related to entrepreneurship and innovation Relationship to local and international networks related to entrepreneurship and innovation so we may leverage to improve network connections in Chile
Relationship to international networks in order to position Chile as a hub of innovation in Latin America Activities to enhance interaction, networks, knowledge transfer, skills and best practices to local entrepreneurs and their environment
• •
6. PROJECT TERM The duration of the Project shall be 24 (twenty four) weeks, which may be extended only once and up to 4 (four) additional weeks. The official extension request must be sent by email to InnovaChile, and settled within 5 days of receipt. The start date of the program shall correspond to the processing of the necessary administrative acts, which in turn approve the expense of the granted seed capital. During the execution of projects, none of the participants may apply to other types of co-financing from InnovaChile. Upon completion of the program (24 weeks), participants would then be eligible to apply for other local funding sources under the obligation to communicate your previous status as a beneficiary of "Start-Up Chile" funding within the new application. 7.) COFINANCING InnovaChile provides a subsidy, ie, a transfer of non-refundable funds, up to 90% of the total project cost with a ceiling of $ 20,000,000(twenty-million Chilean pesos). Participants must provide at least the remaining 10% contribution in kind or in cash as assessed during the Project. 8.) EVALUATION CRITERIA Projects will be evaluated with grades from 1 to 10 (with 1 being the minimum score and 10 being the highest). The evaluation criteria are the following: Criteria Participants Project Value - Mercado -
Proyecto
Environment
Weight 33% 34% -
17%
-
17% 33%
PART 2 TERMS AND CONDITIONS 1.ADMINISTRATIVE RULES The Administrative Rules governing the processes must be met from the application process until the end of the term of the Project.
All communications reported in the application process are the exclusive responsibility of the Beneficiary to maintain updated. All deadlines specified in these Rules should be construed as working days, unless otherwise noted. Public holidays, Saturdays, Sundays are not counted as working days The application documents are available in an electronically downloadable format on the website: www.startupchile.org/apply 2. APPLICATION PROCESS The application process will occur each trimester, and will accept up to 700 (seven hundred) valid nominations entered for each process. The deadlines, quotas and opening and closing dates will be posted on the website www.startupchile.org. Applications will only be made available via electronic entry of projects on the site www.startupchile.org / apply. 3.ACCOUNT FINANCING a) Human Resources: Includes salaries or fees of technical and/or professional services directly associated with project activities, including the salary the enterprise can receive for their participants in accordance with the provisions of the legislation, with a maximum of up to $ 350,000 net (three hundred fifty thousand Chilean pesos) per month per Participant l b) Operating Expenses: Corresponds to the direct spending associated with the Project such as administrative support staff, office rental, expenses for materials, domestic and international flights, insurance, issuance of guarantee, product development, visits to potential customers and / or providers, activities relating to the promotion and dissemination of the product / service, visa procedures for participants and Internet services. This account may also include housing, utilities and common costs based on the following table: Participants 1
2 or more
Weekly Expenses Up to $100.000.-‐ (cien mil pesos chilenos)
Total1 Up to $ 2.400.000.-‐ (dos millones cuatrocientos mil pesos chilenos)
Up to $150.000.-‐ (ciento cincuenta mil pesos chilenos)
Up to $3.600.000.-‐ (tres millones seiscientos mil pesos chilenos)
Expenses NOT covered by the subsidy are the following: personal expenses, such as food, tips, medicine, air travel of people not related to the project, urban mobilization expenses, recreation or any other item that has no direct relation to the Project. c) Investment Expenses: Includes the purchase of durable goods (fixed assets) necessary for the implementation and achievement of the outcomes of the project.
4. BENEFICIARY All individuals who are founders or owners over the age of eighteen years old are eligible to apply a.) BENEFICIARY: the individual who shall act on behalf of himself and his team members as the responsible party before InnovaChile. The person designated as Beneficiary, will be fixed, and should participate in the Program in Chile during the entire period of project execution; he/she also be an active and passive all the rights and obligations established in the Grant Agreement. b.) EXECUTOR: Individuals of the founding team who are duly specified during the application process as participating in the Program’s activities in Chile. In no case will it be allowed that there be more than a total of 3 team members per project participating in the program. 5. PRESENTATION AND ANALYSES OF LEGAL BACKGROUND OF THE APPLICATION PROCESS Applications shall be submitted electronically on the application page of the Start-Up Chile website: www.startupchile.org/ apply. All documents and information requested in the system must be completed in English. It is the obligation of the applicant to include: • Copy of the passport identification page of each of the participants designated in the application of the project. •
Copy of the professional resume of each of the participants designated in the application of the project
•
Copy of the project business plan
•
At least one letter of recommendation from a person or institution who is familiar with the proposed project, and can support the entrepreneurial environment in Chile and/or abroad
The judging analysis will be performed within a period of 5 (five) days from receipt of the application submission. InnovaChile or their designee may solicit additional materials for this analysis, such as clarifications and additional background information or additional e-mail contact sent to the address on the application. The requested information will not be allowed to alter the goal of the project nor change the original participants who applied. These records must be sent by email or through the Start Up Chile online platform by the person qualified to do so, within 5 (five) days from receiving the request. If applications are not accompanied by all requested information or do not conform to
the antecedents established herein, the Project will not advance the later stages. In such cases, we will notify the applicant via email.
6. EVALUATION PROCESS 6.1 Relevance Applicants that designate that either the Beneficiary on the application, will not remain in Chile during the period of Project implementation, or who consider Chile only as an end market and not as a platform to access global markets, will be rejected immediately as irrelevant to the objectives of the program. 6.2 Evaluation Qualified InnovaChile personnel will conduct the evaluation process. They will judge the content of the projects mentioned in section 5 and section 8. InnovaChile applies a methodology that allows the proper assessment of all of the relevant aspects of the project, and will give a fair and equitable treatment to all projects with due regard to the confidentiality concerns of the applicant Those applicants who apply to the program through the institutions with which InnovaChile has a standing formal agreement will immediately be processed to the final judging stage. Notwithstanding, each applicant should attach, for each project presented, all the background information requested in paragraph 5 above. 7. DECISION Once the initial evaluation is completed the ranked projects will be presented to the Subcommittee on Entrepreneurship, which will make the final decision as to whether the project is officially approved or rejected. They will approve projects with the modifications it deems appropriate, provided they do not alter the overall objective of the program targets. InnovaChile will communicate the decision to the email indicated in the application within a maximum of 5 (five) days from the date of approving or rejecting the project. 8. FORMALIZATION OF THE GRANT AGREEMENT The formal grant agreement occurs between the Beneficiary and InnovaChile in the Spanish language. To formally initiate this agreement, it must be signed by the beneficiary within a maximum of 10 (ten) days from the date of commencement of the program. The language of this contract will be made available on the Start-Up Chile website. A standardized format in English of the Grant Agreement is also available in electronic format downloadable on the website www.startupchile.org. Rejection of Temporary Resident Visa will be grounds for not formalizing the grant agreement. 9. PROVISION OF GRANT AWARD
Grant resources may be transferred in one or more installments, either by way of payment or against the submission of Activity Reports and expense reports made. The beneficiary should communicate which option he prefers before signing the grant agreement. 9.1 Options for expense report submission: i. Delivery of the subsidy by way of lump sum advance payment: The beneficiary, prior to each payment, you must take, and for InnovaChile satisfaction, guarantees consistent, whether in bank certificates of deposit payable on demand, time deposit or insurance policy immediate execution, in order to ensure the total grant advances. The gloss of the instrument must state that their goal is to ensure the correct use of advance grant from InnovaChile for the Project, whose name and code must be indicated. The security for each advance shall be valid for more than 25 (twenty five) days from delivery of the Activity Report of Expenditures and Surrender part (forward) or the final document will be returned once InnovaChile approves the reports. The guarantee may be provided by third parties, citing the gloss of it, if applicable, to ensure the Beneficiary to the use of grant advance given by InnovaChile. Exceptionally, they may accept other security instruments issued by foreign banks or other institutions, to the extent that they can be presented for payment within the territory of the Republic of Chile expeditiously and properly safeguard the resources given to the Beneficiary, a circumstance that can be qualified by InnovaChile. The financial cost of the guarantees mentioned above, may be charged to the account operating expenses described in paragraph 3 of the Administrative Rules. ii. Delivery of the grant as reimbursement against approval of Activity and expense report: In this option, the InnovaChile subsidy will be delivered in the form of a refund against the submission and approval of required activity and expense reports made during a period of at least 4 (four) weeks. This reimbursement option, will not allow the repayment of more than $15,000,000 (fifteen million pesos) during the first half or 16 (sixteen) weeks of the Project. 9.2 Conditions for receipt of subsidy: i. Complete processing of the resolution of the Executive Directorate of InnovaChile who approves the subsidy agreement. ii. The delivery by the beneficiary of the guarantee mentioned above, in case the subsidy is delivered by way of advance. iii. The timely delivery by the beneficiary of each activity report and expense report, if any, and its approval by InnovaChile which may decide to pay a portion of the grant if it considers that the beneficiary does not fulfill its obligations. 9.3 Suspension of Payment The continuity of the delivery of the grant fund resources is subject to an evaluation by InnovaChile that is based on the progress of the development of the Project, the remaining funds available, as well as on the submission of the guarantee document
respective of each participant’s case. InnovaChile reserves the right to suspend delivery of the grant, if it finds that the project is not successful or the Beneficiary has failed any or all of its obligations. In the cases described above, InnovaChile reserves the right to impose these measures in order to correct the deficiencies it perceives, or to execute an early termination of the Grant Agreement. 10. INCORPORATION OF THE PROJECT IN THE PROJECT MANAGEMENT SYSTEM. The incorporation into the project management system, along with the technical planning of the project, and final budgeting under the instructions and requirements provided in InnovaChile Guidelines (available in electronic format downloadable on the website www.startupchile.org / guidelines) is the sole responsibility of the beneficiary. 11.CONTROL AND SUPERVISION OF PROJECTS InnovaChile will not have any involvement in carrying out activities connected with the objective of the project however; it will provide assistance to Beneficiaries for the preparation of the activity and The beneficiary is not under the jurisdiction of InnovaChile, however; the grantee will be subject to the monitoring and control of expenditures incurred that can be attributed to their project. The Beneficiary is solely responsible for any loss or damages that may occur to others while carrying out their project. InnovaChile will not accept responsibility for any harm that may be caused to third parties by the beneficiary or their team members. The Grantee shall comply with the guideline restrictions established in the terms and conditions that permit the verification of the activities carried out for their project, and agree to ensure the proper use of grant resources. 11.1 Project expenses The project resources provided by InnovaChile will NOT fund the following items: • • • • • •
Investment in Capital Markets (stock, time deposits in domestic or foreign mutual funds, etc) Debts and dividends Taxes recoverable by the beneficiary, taking into account the applicable legal and tax rules Investment in capital assets that are not critical for your project Acquisition of property in any capacity Any other expenses related to personal, recreational, urban mobilization, alcohol, pet-related or other not related directly to the Project
Expenditures must be surrendered to InnovaChile based on actual costs, the price actually paid, duly backed by reliable documents proving their amount. InnovaChile accepts only those expenses incurred by the beneficiary and other grant executor designated in the application.
In addition, InnovaChile will accept expenditures incurred by any company incorporated under the Limited Liability rules in Chile, where the project beneficiary is the beneficial owner, and the recipient has a stake of at least 30% of said company, and also: a) When the company is constituted in Chile, and b) It is NOT a company that has already incorporated within a term of 2 years or 24 months PRIOR to the date of the application to the program. Again, since we are striving to identify early stage companies, someone with a business MORE THAN 2 years old, will not qualify to reimburse their expenses. Under this circumstance, the beneficiary/company owner must submit the following documents a full 10 (ten) days before the first company/partnership expenditure: a) Photocopy of articles of incorporation and amendments thereto b) Certificate of Validity issued by the authorizing body, issued within 90 calendar days from the date of incorporation. InnovaChile reserves the right to verify that the amount declared as a contribution to the project is consistent with the objectives and activities reported. 11.2 Anticipated Expenses InnovaChile will only approve minimal expenses before your official subsidy agreement is signed in person and formalized. This means that between the time you receive your official letter of acceptance, and the time you arrive in Chile we will only authorize the following expenses: •
International flights for the project beneficiary, and for team members
•
Expenses related to obtaining a work visa
•
Travel and Health insurance related to participation in the program
The lack of formalization of the subsidy agreement for reasons not attributable to InnovaChile does not give rise to compensation or refund for any expenditure undertaken. The modification of these rules will be applicable to projects that have not yet formalized their subsidy agreement. 11.3 Procedure for procurement and subcontracting During project implementation, the Beneficiary must follow the following procedure for procurement and subcontracting: Those amounts exceeding $ 2,500,00 (two million five hundred thousand pesos) net must be pre-authorized by InnovaChile. For this purpose, Participant, prior to the acquisition or subcontractors, shall submit to InnovaChile 3 (three) quotes from the respective suppliers.
InnovaChile in meritorious cases, authorize a smaller number of contributions. Such authorization must be requested prior to outsourcing or acquisition by email addressed InnovaChile for approval, which shall decide within 3 (three) days. If after having made 3 (three) quotations, no prior permission is sought, InnovaChile will only recognize the contribution of the price quote constituting the lower value. In case the beneficiary has not requested prior permission, or has failed to secure 3 separate price quotations, InnovaChile will reject the expense. 11.4 Monitoring Reports The Beneficiary agrees to deliver to InnovaChile or any other public or private InnovaChile determines all necessary documentation required to control the investment of resources of the grant, promising to give all necessary facilities for the most expeditious and full compliance with this task and must provide all data, records and reports required of you, to guarantee the investment subsidy provided. The persons appointed by InnovaChile for purposes of project monitoring have the authority to make revisions, field inspections, and visits that they determine necessary in order to verify whether the Project is developed in accordance with the stipulated agreement, and to verify whether, among other aspects, the contributions of the Beneficiary correspond in character to the quality and quantity initially committed to, InnovaChile reserves the right to perform this activity without previous notice to the beneficiary, the executors, and/or subcontractors, who shall be expected to provide all necessary facilities to expeditiously and effectively follow-up. The exercise of follow-up work referred to does not mean that the InnovaChile assumes any responsibility to carry out the proposed the project; its execution remains the sole responsibility of the Beneficiary. The Beneficiary must comply with the respective grant agreement with respect to the delivery of reports, which must conform to the expense reporting terms. The beneficiary must submit a final report of activities along with a final expense report within 2 (two) weeks after the expiration of the Project. Non-delivery of this report, failure to do so would prevent InnovaChile´s ability to finalize the closure of the project and expenses related thereto. Each of the reports referred to in these Rules shall contain: i. Activity Reports are to include the progress of the project, some means of verification and their entry into the project management system. If the project has sustained a delayed implementation of activities or a lack of obtaining the results allowing for the objectives of the Project to be met the report shall contain the justifications and measures to adopt in the future to achieve them. It must also include compliance with or progress on the commitments to the program. ii. Expense Reports: will be delivered with their corresponding invoices, and other supporting documentation that prove true. These documents must bear an
authenticating stamp that proves their validity. These records must be attached in chronological order and classified by financial account in a legible copy. iii. Evidence must be provided of the competitive price quotes acquired, where appropriate as foreseen in the grant agreement. InnovaChile shall approve or provide comments to each report within a period not exceeding 10 (ten) days after receipt. At the request of modification or supplementation of the reports by InnovaChile, the Beneficiary must comply with such request within 3 (three) days. InnovaChile may request special reports at varying intervals that will be determined based on monitoring the goals of the Project. 11.5 Modifications to the Grant Agreement Modifications to projects that require a change to the terms of the Grant Agreement shall include an instrument modifying the same, which must be approved by a resolution of InnovaChile. 12. TRANSFER, USE AND DISSEMINATION OF PROGRAM RESULTS The dissemination and transfer of project results will be made in accordance with the provisions of the Grant Agreement. In all cases, the program results may be disseminated freely and without restrictions of any kind, making mention of authorship as appropriate, no information is confidential or proprietary about the projects that are received through the reports. It may also, without mentioning the name of the Participants, to disclose any information related with the Project for the purpose of publishing statistical information in general. For the purposes of protecting sensitive information from the participants, they must communicate that information InnovaChile delivered under the program, in its view, should be understood as confidential. Also, they should inform InnovaChile about obtaining a proper result within the Project. In the event that all or part of this information under the legislation of the Republic of Chile should be public, this circumstance will be reported to the recipient within 5 days from communication. The beneficiary authorizes their consent for the filming of audiovisual material relative to the project and its participants for official outreach activities. 12.1 During participation in the program, the beneficiary agrees to: i. Provide InnovaChile information about the contemplated activities of the project and provide the necessary facilities for that objective. ii. Support and participate actively in Program events and to promote the partial and final results of their project. iii. To promote the program in such a way that makes a noticeable contribution to the implementation of the project.
iv. Forward surveys, reports or other information about the intermediate or final results of your project when requested by InnovaChile. 12.2 After the completion of participation in the Program, and for a period of 5 (five) years, the Recipient agrees to:. i. Respond to polls, submit reports and provide any other information on intermediate outcomes, or impacts the end of the project, when requested by InnovaChile. It is understood that the beneficiary assumes this obligation in return for having obtained funding for its implementation. This information is relevant to the development of metrics by InnovaChile, and the general impact assessment of its instruments, so the failure by the Beneficiary to fulfill this obligation, entitles InnovaChile to refrain from receiving and processing bills submitted after by the reluctant Beneficiary. 13. INTELLECTUAL AND INDUSTRIAL PROPERTY AND USE OF RESULTS The results from the participation of the Project and all other information, such as inventions, technological innovations, procedures, plans and other documents belong to the participants under the general rules. The copyright of the information generated by the Project should belong to exclusively their owners. Consequently, they correspond to protect the records concerned any patentable inventions or proprietary rights on the results achieved during the project. 14. SUSPENSIONS OR TERMINATION OF PARTICIPATION IN THE PROGRAM 14.1 Suspension of the participation of a project: The suspension of your participation in the project must be requested in writing and include substantiating information and must be sent by email to InnovaChile. InnovaChile will respond this request and communicate a decision to the Beneficiary, in the same way, within 15 (fifteen) days from the request. The term of suspension shall begin from the time InnovaChile communicates permission. Upon authorized of a suspension, the beneficiary cannot pay expenses incurred for length of the suspension. Therefore, the suspension may be requested only once during the life of the project, and may not exceed half the period originally approved. Thus, a project with duration of 24 (twenty four) weeks may be suspended for up to 12 (twelve) weeks. InnovaChile also reserves the right under serious circumstances not attributable to the Beneficiary, to officially suspend the project. 14.2 Official Program Closure The Grant Agreement shall be deemed terminated once InnovaChile grants its approval to the last activity and expense report and this has been officially communicated to the Beneficiary. 14.3 Early Program Termination
InnovaChile reserves the right to undertake the decision to terminate the subsidy agreement early in the following cases: a. Reaching the conclusion that the project will not achieve the expected results and cannot be executed within reasonable parameters, that the Beneficiary cannot the contribute of the necessary support that is their responsibility or that the participants do not meet the minimum requirements for the program needs. b. Other reasons not attributable to the negligence of the beneficiary in carrying out their activities related to the program. c. If the Beneficiary fails to comply with its obligations relating to the Project and the Program. Failure means, among other items, the following situations: • Deny or interfere with program monitoring • Negligence in the financial and technical control of the activities of the beneficiary • Failure to notify InnovaChile in a timely manner, about the inability to find out the contributions they are responsible for. • Disagreement between the technical and legal information • Investing resources from the subsidy agreement in the capital markets. • Not participating in Program events, unless InnovaChile has previously agreed. • Revoking of the visa granted by the authority, or committal of gross violations of Chilean law Failure in financial accounting means: Duplication of expenditures, or the fabrication of instruments or contracts In cases a) and b) above, the Beneficiary must return all unspent balance of the subsidy in their possession within a period of 10 (ten) days from written notice of early termination of the Beneficiary. InnovaChile will take legal action against if the recipient fails to make the refund within the fixed amount of time. If the subsidy is paid against approval of the expense report (s), InnovaChile will only allow the transfer of funds for those expenditures that are technically and financially accredited, and in which they are incurred until the date of written notice of early termination. In the case of early termination due to culpable breach on behalf of the Beneficiary in accordance to what is stated in point c) above, InnovaChile may only recognize costs incurred up until the occurrence of the acts justifying the decision of early termination in the case where there is a delivery of the subsidy against reimbursement. If the subsidy is supplied by any other form of payment, the beneficiary must repay the entire grant received in UF and is to be converted into the national currency upon the date of being informed in writing by InnovaChile. If the financing of this project, leads to a sum less than the face value of the subsidy given, the latter must be returned (nominal value). Restitution will be made within 10 days from the notification of early termination of the beneficiary.
For the beneficiary whose agreement is terminated early because of any of the above attributable causes, he/she will also be disqualified to access any other InnovaChile grants for a period of up to five years following notification of this decision. In this case, the responsibilities of individuals and/or other program participants will be determined subject to research of each individual case. 15. QUESTIONS Questions may be conducted in English or in Spanish to the e-mail address: info@startupchile.org Each query will be answered by the same means, within a maximum period of 5 (five) days from receipt. 2 ° be published and put on the notice for this resolution available to those interested in web pages and www.startupchile.org/apply or www.corfo.cl. CRISTÓBAL UNDURRAGA VERGARA Director Ejecutivo