CHILE DAY 2018

Boosting ChileanVenture Capital Industry

Why invest in Venture Capital?

• Capture, motivate and retain talent

• On board of new advanced technologies

• Optimize costs and boost productivity

• Quick response to new disruptive technologies

• Sustainable growth

Will Chile be the eight VC hub?

• Legal certainty of our venture capital industry

• Competitive tax benefits for foreign investors

• CORFO’s venture capital funds programas

Strengths of Chilean innovation ecosystem…

• Reluctant to invest in R&D

• Reliance on CORFO’s subsidies

• Few successful cases of angel investors and

corporate venture capital funds

… and weaknesses

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

ISR

KO

RS

WI

JP

NS

WE

AU

TD

NK

GE

RF

INU

SA

BE

LO

CD

E -

Tota

lF

RA

SV

NIC

EN

LD

NO

RC

ZE

AU

SG

BR

CA

NE

ST

HU

NIT

ALU

XN

ZL

PO

RE

SP

IRL

SV

KP

OL

GR

CT

UR

LV

AM

EX

CH

I

R&D expenditure as percentage of GDP (2015)

0,25%

0,30%

0,35%

0,40%

0,45%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Chilean R&D expenditure as percentage of GDP (2007-2016)

0%

5%

10%

15%

20%

25%

30%

35%

40%

ISR

US

A

CA

N

KO

R

IRL

FIN

ZA

F

SW

E

CH

E

FR

A

ES

P

NZ

L

LV

A

ES

T

DN

K

DE

U

GB

R

BE

L

NO

R

HU

N

NL

D

JP

N

AU

T

AU

S

SV

K

PR

T

SV

N

ITA

PO

L

RU

S

CZ

E

LU

X

CH

I

GR

C

Venture capital investments as percentage of GDP (OCDE countries, 2016)

Seed/start-up/early stage Later stage venture Total

0

50

100

150

200

250

300

0

10

20

30

40

50

60

70

80

Brazil Mexico Colombia Chile Argentina Peru Others

US

D M

Deals

Venture capital investments in Latam (by country, 2016)

Number of deals USD M

0

100

200

300

400

500

600

0

5

10

15

20

25

30

35

40

2011 2012 2013 2014 2015 2016

US

D M

Fu

nd

s

Venture capital investments in Latam (2011-2016)

Number of funds USD M

Challenges

Build a bridge of trust

between companies and the

academy

Encourage investments by

companies based in Chile in

technological ventures

Enhance our innovation and

entrepreneurship ecosystem

Generate new source of

financing for entrepreneurs

that replaces CORFO’s

subsidies

• Public Policy

• SOFOFA Hub

What’s SOFOFA doing?

R&D and open innovation platform incentives

• Currently, R&D Law grants tax benefits for investment in R&D (in-house or by others)

• … but doesn’t consider equity investments in startups

• SOFOFA proposes

1. Expand eligible expenses (startups buyout and business capacities R&D

investments)

2. Expand benefit credit cap

3. Recurring R&D expenses in companies with certified capacities

1. Public Policy proposals

SOFOFA Hub

“Create the SOFOFA HUB to

connect our partners connect with

entrepreneurs and innovators”

Circular economy

Industry 4.0

Biotechnology

✓ Recycle

✓ Redesign or refabricate

✓ Redistribute

✓ Reduce or reuse

✓ Recover and repair

✓ Industry digitalization

✓ Internet of things

✓ IT education and training

✓ Automatization

✓ Labor reconvention

✓ Industrial productivity

✓ Biodiversity maintenance

✓ Bioremedation

✓ New agricultural varieties

✓ Sea resources exploitation

2. Institutional initiatives

CHILE DAY 2018

Boosting ChileanVenture Capital Industry