Ken Seville is currently at Start-Up Chile with his company, CiviSide. He’s an ex-Montrealer (OK, he was born in Montreal and lived there for 6 months), who prior to going to Chile, lived in Ottawa. With the latest news about three Montreal startups going to the Chilean incubator, and yesterday’s post from one of the founders, Naysawn Naderi (founder of Art Sumo), I thought it would be interesting for Ken to share his experience as well. As you’ll read, most of his experience has been very good, but it’s not all perfect. There are some financial issues to receiving $40,000 of “free” money. As they say, “nothing in life is free” or “money doesn’t grow on trees”…and in Ken’s case he found that the financials aren’t as simplistic or rosy as expected. I want to thank Ken up front for sharing his story and wish him the best of luck!
My Mixed Experience at Start-Up Chile – But Still Highly Recommended
Congratulations to Ateneo Digital, Bespoke Mobility, and Art Sumo on their acceptance to Start-Up Chile. As a Canadian in the the current cohort with CiviSide.com, I can personally attest that it will be a worthwhile and enriching experience, but not without challenges. The first challenge, ironically, is money. The promise of Start-Up Chile is that you will receive $40K as an equity free grant, and that is absolutely true…if you have enough money up front to access the entire grant. The issue is that the grant is given on a reimbursed basis and they only allow startups to request reimbursement once monthly, so unless you bring roughly $10K with you, you will not be able to access your full grant (assuming that you are pre-revenue).
The Reimbursement Process
Here’s how their process works:
- Spend own money brought with you for business expenses
- Apply for reimbursement. Eligible expenses such as salaries, marketing, operations (including housing and salary), reimbursed at 90% of claim
- Receive reimbursement approximately 21 days later
- Rinse and Repeat
The good news is that it shouldn’t be too difficult to raise all or most of the seed capital that you need from friends and family (to get started), since 90% of it will be reimbursed by the program. Technically you only need to pay 10% of reimbursable expenses, so you should only need $4K in total to access your entire grant….technically. The reality is that not everything is reimbursable. You won’t be able to reimburse the agent fee for finding your apartment, you won’t be able to reimburse your deposit for your apartment, you won’t be able to claim the minimal salary you are allowed to claim ($750 CAD) in the first month. In total that added up to about $1,500 I wasn’t able to claim of the $5,000 I brought, so this was quite a setback for me. In addition, upon arrival there is about a 2 week lag between when you can sign your contract, add another week until you can get your first reimbursement appointment with an account executive, and then add up to another 21 days until you receive your first reimbursement in the bank. You need almost 2 months of money on hand before you see a peso from the program. That is the bad, now the good.
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