

Chile to give 300 startups $40,000 - nerfhammer
http://start-upchile.com/about/the-program/

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Vermeer999
We tried that in Quebec during the mid-90's. The goal was to create a Silicon
Valley in Montreal. Then other regions got upset and it was made province-
wide.

Then non-technology entrepreneurs got upset and the definition of "technology"
was enlarged to include anything that had a web site.

Then the money dried up and we still don't have more world-class technology
companies than before.

The morale of the story: Silicon Valley is what it is because there is a
critical mass of venture capital and world class universities within a small
region. That's not something that's easy to replicate in 40K increments.

~~~
kjksf
The false assumption you're making is that the ambition of the program is to
replicate the success of Silicon Valley or that anything short of that is not
worthwhile.

Chile wins if this program generates positive ROI on the investment, even if
it generates only 1% of success of Silicon Valley.

Economic stimulation, if done properly, works. I find it amazing that a
government initiative makes so much sense and is executed, as far as I can
tell, so well, so big props to Chilean government for doing that.

~~~
CodeMage
Given the number of times I've heard the Chilean government talk about
establishing a Chilean "Silicon Valley", I think we can all safely assume
that's more or less what they're trying to do.

As someone who has been living and working in Chile for more than 10 years
now, I'm not at all surprised to see them throw money at the issue yet again,
instead of working on changing the way things work. But I've already talked
about that stuff before: <http://news.ycombinator.com/item?id=2068429>

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trevelyan
I'm in Santiago now and can confirm this an amazing program. There are some
great companies down here and the application process is only getting more
competitive as more people find out about it.

March 15th is the last day to submit applications for this round, so don't put
off applying if you're at all interested. Stay up late and get your proposal
finished.

~~~
ultrasaurus
Do you know if it's 11:59pm March 15th? Those of use finding out today might
be a little pressed for time.

~~~
trevelyan
It's today (March 15), 11:59pm Pacific Standard Time.

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onwardly
The U.S. budget for 2011 is $3,690,000,000,000. Can we spare just a sliver of
that for innovation and job creation?

Imagine a national contest, YC-ish if you will. 500 businesses walk away with
$100K each. That costs just $50M.

What would you get in return? You'd get tens of thousands of people racking
their brains and being brave and innovating. Even if they weren't chosen, many
of them would have a solid plan and go for it.

If we really believe that creating new jobs is our top national priority, then
we need to find _new_ ways to create new jobs. After all, that's where 80% of
jobs come from: new companies.

I can already imagine some of my friends screaming: "You Socialist bastard!".
No.

It _could_ be done to reward merit, and it would provide critical support to
promising startups right when they need it most. This is not about handouts-
its about rewarding and encouraging innovation and supporting job growth.

Angel investors might be pissed though.

~~~
fierarul
This actually _is_ a socialist suggestion. I do not like government handouts.

What I would support is tax credit: if you feel like doing a startup, under
some rules, the government could give you a $100k tax credit.

Giving away $100k for people to put businesses into the ground doesn't seem
smart to me. Otoh, each business is supposed to make money and if you don't
become profitable, might as well shut down.

~~~
onwardly
The U.S. gives out billions of dollars every year to all kinds of businesses.
If having an open competition to win grants is socialist, then we're already a
socialist country.

In any case, attacking this as a "socialist" idea is an ad hominem attack. Not
that its the best idea ever, but calling it "socialist" doesn't detract from
the merits of it one way or the other.

~~~
fierarul
The OP said he likes something and perhaps it looks like something socialist,
I've answered saying that that is socialist and that _I_ do not like it and
that I would support something else.

I don't see it as an ad hominem, nor was it intended. Just two disagreeing
opinions.

Actually, this is just a recent annoyance of mine. In my country (Romania) the
government just released something like this: they are giving away 10.000 eur
to new companies started by young people, based on some form of contest (they
read a business plan, etc).

This annoys me for multiple reasons, but one if very personal: I am
disqualified from that contest because I _already_ have a company. So I am
literally paying taxes that are wasted so another guy gets free money from the
government based on how good he is at writing business plans (or bribing).

What they could have done instead is say: all companies with young owners get
a 10.000 eur tax deduction (maybe, for example, if they create one extra
workplace). This way, you have to actually prove that your company is
profitable, not that you are good at writing business plans.

~~~
onwardly
Didn't mean to misinterpret your comment.

I see how you're upset that "your" tax money is being given to someone else to
start a business, but its probably worth noting that only some excrutiatingly
small % of your taxes are going to this.

I think that other governments can and should learn from experiments like the
one in Romania. But from a policy perspective, it seems like a somewhat
reasonable way to spur new company creation.

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bluehat
Hacker Dojo work has caused me to run into a number of governments / entities
with money trying to do things like this by either directly handing out cash
or handing out goodies and tax breaks. One of the oddest/largest is in Vietnam
<http://www.quangtrungsoft.com.vn/>

This doesn't prove it's a good idea, but it does help to realize that there
are enough of these programs going that they can at least learn from each
other's mistakes.

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shii
I mentioned my possible intentions to apply for this to my Spanish teacher one
day, yet she cautioned me saying Chile like many South American countries is
quite racist towards blacks and that I should consider somewhere like Brazil
instead if I was still interested in the region, since it is much more
welcoming and less prejudiced than somewhere like Chile.

Curious what those actually living in or from the region perceive as to the
racial climate there in Chile and Sourh America in general.

~~~
millettjon
I've lived in Chile 8 years and haven't seen any racism first hand. I see it
all the time in Michigan even within my own family. The racism that does exist
is concentrated towards Peruvian immigrants and Mapuche.

The much larger problems are class and sex discrimination. There is definitely
a "nanny" class that the middle/upper income people view differently and vice
versa. You would be largely exempt from this as a foreigner and would have no
problems interacting with both groups. For women, the sexism is an obstacle
although not a huge one. Offhand I can think of five female entrepreneurs I
know personally in the tourism industry. They are from Chile, Cuba, Austria,
US, and Argentina.

Chileans are overall very respectful of foreigners. They are self conscious
due to Chile's small population and are open with foreigners and appreciate
what they bring to the table.

There are very few black people. I have talked to a few that are US basketball
players on contract to local teams for a year or two. They generally seem to
enjoy the experience. Brazil has more blacks but it also has more corruption,
more crime, and a higher cost of living.

Whatever you decide, I highly recommend living abroad as there are few better
learning experiences.

~~~
lazyant
This is also my perception of Chile (and my prejudice extends it to most Latin
America); rather than racism there's a lot of classism and looking at external
appearances (dressing well, kids going to private or public school etc). If
someone's black they'll be classified more according to being a 'professional
foreigner' or a 'poor immigrant'.

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ultrasaurus
It's a government program, so there are some less agile/more bureaucratic, for
instance "Upload complete passports: Make sure that Number, Nationality,
Gender, Picture, Date of Birth, Residency are legible. You must scan all
pages." instead of YC-style questions.

~~~
webwright
You also need CVs and a business plan. I don't think the best candidates for a
program like this would have either on hand.

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acabal
I've never been to Chile, and I don't think my company is technically a
startup anymore (otherwise I'd apply), but I highly encourage anyone who's
even remotely considering this to apply.

The cash isn't the important part, in my mind; it's the experience of living
in a very different culture and part of the world for a year, with more or
less a full safety net. The amount of entrepreneurial good that could be done
for the world if Americans--with their can-do spirit and work ethic--were more
aware of the people outside their borders would be staggering. And I'm not
saying that in a derogatory way, just that with a country as big as the
States, it's often hard for Silicon Valley to give some thought to the
business-solvable problems people have in New York, let alone Tierra del
Fuego.

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wiseleo
I applied and got to final stage last year.

I think they got scared by what my product was about to do (self-healing
computer networks, which would undermine their nascent IT industry). It's
sitting on the backburner for now while I am working on something a bit less
threatening to properly fund the main product.

Might try again this year. :)

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brianbreslin
This is the 2nd year of this, last year there were 40 grants right? Guess they
were content with the results.

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OstiaAntica
This program is $12 million total. Chile's per capita GDP is $12,800. Lets say
their avg. income, payroll, and VAT burden is 40% of that total.

So 2,344 Chilean workers will waste 40% of their working lives this year to
pay the taxes to fund these 300 startups.

~~~
kragen
That sounds like a good bargain. Each startup only needs to create 8 jobs for
a year (or 4 for 2 years, or 0.8 for 10 years) in order to pay it back. Right?

~~~
OstiaAntica
Sounds more like forced labor to me. If this money was returned to those
taxpayers, there would be more resources for the private Chilean economy to
create jobs.

This is command economics with a Web 2.0 veneer.

~~~
kjksf
The false assumption you're making is that an average Chilean can generate
better ROI than a bunch of selected, high-tech startups.

If that were true, Paul Graham would be giving out handred dollar bills to
random people instead of investing in startups that he personally vetted.

~~~
mynameishere
The average Chilean would spend his money as he pleased, which would go to
businesses that are satisfying a real demand, rather than something a
bureaucrat guesses might fulfill a demand.

~~~
kjksf
So you're basically arguing that taxes should be completely abolished.

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acgourley
How's the internet over there?

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millettjon
It works well for me. I've been in Puerto Varas, Chile for the last 8 years
and quite happy.

~~~
vrikhter
Just visited Puerto Varas a few months back. What a beautiful place! Good for
you :)

