• Fundación Chile’s Venture Capital area is searching for new contributors to launch its second fund that seeks to strengthen the local ecosystem: “We are looking to attract entrepreneurship and venture capital into the country while at the same time retaining Chilean talent and exporting it,” says Jamie Riggs, Managing Director of ChileGlobal Ventures.
• This article was published in El Mercurio on October 1st, 2020.
CLIN II. This is the name of the new triple impact venture capital fund that will be launched in 2021 by Fundación Chile’s Venture Capital area, Chile Global Ventures, seeking to attract international and local talent to boost the venture capital industry while providing knowledge and skills transfer to Chilean entrepreneurs. They are currently in the midst of a call for companies to join this new fund, aimed at investing between US$ 1 million and US$ 1.5 million in startups in two separate business rounds.
About 15 to 18 undertakings from Chile and Latin America will participate in CLIN II. Unlike the first Fund, which currently invests in about 20 to 25 startups with sums ranging from US$ 500,000 to US$ 1 million, this new financing vehicle will invest more money in fewer undertakings. ‘‘The idea is to co-invest together,’’ says Jamie Riggs, Managing Director of ChileGlobal Ventures. In addition, this new fund will seek to connect entrepreneurs with large companies and investors to make them grow, in other words, a ‘‘smart money’’, says the executive.
‘‘Four years ago we created the first CLIN Fund. In this process we have become increasingly sophisticated, especially as a team. Something important is that to develop these funds, we relied on my latest work with the venture debt instrument for Silicon Valley Bank, which has a very strong ecosystem supporting entrepreneurs in different ways. In both CLINs we want to replicate that model, having mentors, suppliers, companies, and investors so they can be supported in many different ways,’’ says Riggs.
—What sort of startups will you look after for the new fund?
‘‘Mainly high-tech companies, based on the UN’s Sustainable Development Goals (SDA), in sectors that generate impact on businesses with digital and natural resource connections. We are looking for such startups in Latin America, which are generally B2B and sustainable, focused on improving energy resources, natural resources, and focused on renewable challenges such as agriculture. Also, that they are intelligent undertakings and, at the same time, relevant in terms of productivity. In this sense, a key element will be to see what is happening worldwide so as to be able to support it through the startups in which we will invest. This will be done under a triple impact modality: Economic, Social, and Environmental. Nowadays we cannot invest only for profit we must also invest in environmental awareness. We cannot invest without social gain, we need greater goals since greater things are happening in the world.’’
The Managing Director of ChileGlobal Ventures anticipates that the second CLIN Fund will total between US$25 million and US$30 million, and will seek to be more exclusive in terms of local and international investment, as it will seek out foreign talent to the country.
Given the cost of the social crisis and the Covid-19 pandemic, we are more concerned than ever about investing in technology ventures. We need high-level technology entrepreneurs, because that is how we will have greater talent and because the country needs more of this to brave the passing times. The next two to three years will probably be the most important ones for us and for Chile’s future, and what happens now will have a great influence on the next 20 to 30 years. Thus the value and opportunity to invest in startups with positive impact’, he argues.
—In that respect, what is the value of promoting this type of entrepreneurship in the country?
‘‘The crisis has brought along many opportunities. It has created this digital ecosystem and today many entrepreneurs are making the most of it. As a matter of fact, we are in the process of investing in an Argentinean enterprise virtually. The markets are supporting these digital companies, the system is growing and will end up being so much bigger than before the pandemic.’’
—Do you think investors are afraid of what is happening?
‘‘I see an opportunity in a different return for investors. I’m not thinking about a positive impact for people or merely yield. During times of crisis, for instance, the dot.com crisis in 2000 or the financial crisis in 2009, the ones starting during those times were companies such as Dropbox, Airbnb, Uber, etc. All of which arose during periods of crisis, as they obtained capital and others did not; therefore, in times such as these, where there is less capital, the best entrepreneurs will survive because they will obtain financing and their competition will not. There are better yields for capital funds during these periods. Those who invest in 2020, 2021, or 2022 will have better results in the future.’’