I’ve just “graduated” from Generation 17 of Start Up Chile. It’s been a fantastic experience and we’ve made amazing new friends, but speaking to the new Generation 18 recruits today made me realise I’ve got a lot of practical tips to pass on! This post will be super handy checklist of ways to save time and get the best out of the programme. The information in your first couple of weeks can be quite overwhelming, so I’ve distilled what I consider to be the most valuable and practical tips.
I’ve also done a video on my Youtube Channel if you’d like a bit more advice about Equity Free Accelerators as a whole.
So, here goes!
The Seed programme lasts 6 months, and runs twice a year – it’s designed for international existing and growing startups. There is also a “preceding” version called TSF for concept and early stage startups with at least one female founder, and Scale for companies going ‘next level’ and growing themselves in Chile.
There’s 20,000,000 CLP available (about 20,000 USD) – and you don’t have to give up a drop of equity! Instead they’re looking for you to motivate and inspire local entrepreneurs, and ideally also hire locally.
To get the money you must show expenses up to that amount and get them approved each month – it’s not just a suitcase of cash! #obviously
First you decide whether to do Up Front (get the money in chunks of 5mill CLP and then afterwards show how you spent it), or Reimbursement (spend your own money and then claim it back using receipts). The first may sound more appealing but from experience I’d highly recommend the second if you can afford it – you tend to get the money more quickly, and the process is much more straightforward with a lot less strings and paperwork.
Get your entire 6 month spending plan approved by your Account Executive (this can be adapted but if you can do it all at once then that’s one less meeting you need to go to!). This is the person who will decide what is reasonable to spend in each area and so you’ll need to justify why you need each expense.
Each month bring your list of expenses and have them checked by your Financial Executive. This person simply checks all the numbers match up and the invoices are valid etc.
Any single expense over 5mill CLP (e.g. a developer salary of 1mill x 6 months) needs special approval. You’ll need to show 3 other bids for the work and justify why you picked the one you did. Don’t be put off by this though – it’s well worth doing though as it means you can submit fewer invoices (see later), and it’s not as much work as you think. Contact some other freelancers or companies and ask them for a one page quote (similar to an invoice).
After the expenses are approved in your financial meeting they’ll take somewhere between 1-3 weeks to arrive in your Chilean bank account (which Start Up Chile help you set up). You’ll then need to get the money out somehow – either by spending it locally or transferring it back to your home country. We found Afex to be far and away the cheapest and fastest way to make the transfers abroad. Find your local Afex branch and ask about transferring to your country.
Tips and Tricks:
Get your Account Executive and Financial Executive meetings as SOON AS POSSIBLE. When you email to book them in you’ll find there’s a few weeks waiting list for an appointment, and every day counts! Don’t wait until you’ve actually done all the spending, or “settled in to your new home” – just book it! The reason for this is that each Financial Meeting can’t be closer together than 30 days so the date of your first one determines the dates of all latter ones and therefore how quickly you’ll get the money. We had 4 meetings in 4.5 months (and all 20mill approved) whereas others only had 2 meetings by this point!
Submit a few large expenses (if possible) instead of loads of tiny ones. We tended to have 8-11 expenses per financial meeting, and most of those were contractors. You can imagine how much more straightforward this was than 100 receipts from Dropbox subscriptions and client lunches!
Open a brand new bank account just for your Start Up Chile expenses. They’ll want to have a print out of your entire bank statement so if you value your privacy, and want to keep the meeting process simple, use a new account. Then when you submit you 8 big expenses, there will also only be 8 payments in your bank statement. Glorious!
You can claim 15mill of the 20mill in the first 16 weeks, and then after that the other 5mill.
To get a expense approved you’ll need:
- An official invoice/bill/receipt – including date, address of the contractor, on branded headed paper
- Proof you paid it – i.e. your bank statement with the payment highlighted (if it’s a credit card you’ll also need proof you paid off the credit card)
- Approval proof from your Account Executive
- Your Expenditure Statement form
- NB Expenses must be paid by the individual ‘team leader’ not by a registered company (if you have one). Ditto invoices must be addressed to you “Miss Croft” not your company “JournoRequests”.
Tips for the Expenditure Statement form:
Put the invoices in the same order they are on your bank statement. So labelling the bank statement is chronological.
Then put the corresponding number nice and big on the top of the invoice.
Email it to your Financial Executive the day before you meet, and also print a copy for yourself for referencing in the meeting.
The exchange rate figure should be from the day the transaction was made, which you get from a government database (or just get it approximately right as your Financial Exec will double check them all anyway).
Bank statement and example invoice….
Monthly expenditure statement example….
Examples of some things you could expense
- Contractors – video editing, coding, graphic design, marketing, translation, sales etc.
- Rent – capped per person, you’ll need a notarised rental contract (i.e. you go to a legal office and stand in line for hours to get a lawyer type to stamp it as “official”ly notarised)
- Founder salary – capped per person, and only if you open a Chilean company to pay the salary from
- Equipment – laptop, phone, etc
- Co-work – one is provided for free but if you need your own office space for some reason
- Flights, travel insurance, and visas – for team leader and registered team members
For each community project you get involved in you’ll get ‘coins’ – more or less depending on the involvement of the activity. Things like mentoring, running seminars at the universities, organising events, writing blog posts, getting press coverage for Start Up Chile, will all earn coins. In some regards the coins are pointless because they’re not compulsory, but if you want to get the most out of the experience, win Pitch Day, and get a good reference for future accelerators, we recommend you get stuck in. We really enjoyed our mentoring projects and it all helps you get to know other SUPpers too.
There’s also the option to get an extension (and a bit more money) to your trip by applying for Go Regional. This sends you out of the capital to some smaller towns/cities. To get on this you must have collected a certain number of coins in the destination you want to go to. E.g. Organised a networking event in Conception, and hosted a hack-a-thon there.
Meet as many people as you can and work from the co-work – the most valuable part of the programme is being connected with the other 100 entrepreneurs in your class! They’re from all over the world and you’ll all have a lot to learn from each other.
Ask Start Up Chile for contacts – Chile is a country where everyone knows each other so if you want one of the biggest brands in the country as a client… just ask! They seem to know pretty much everyone who’s anyone.
Phew – I think that’s everything! Would love to hear in the comments whether you found this useful, and anything I might’ve missed! Best of luck with the programme – it’s really fantastic. Or, apply here.
You can also read about other Equity Free Accelerators around the world on Loot Strap.