Wilson Sonsini Goodrich & Rosati has long had a prominent presence in Silicon Valley, helping high-tech companies from Apple to Netscape to Google get off the ground and prosper. Hoping to attract a new generation of early-stage companies, the firm recently opened a second location in San Francisco intended as an office for the firm as well as “an open, collaborative space” for entrepreneurs and start-ups. The move is further evidence that the Bay Area remains a locus of entrepreneurship and innovation. However, activity in Latin America, especially Chile, could soon give northern California a run for its money in the race to nurture the latest and greatest start-ups.
The October 13th issue of The Economist includes an exploration of Start-Up Chile, a program created by the Chilean government to incentivize entrepreneurs from across the world to start their businesses in Chile. Persons chosen by the program, in exchange for agreeing to reside in Chile for at least six months, are given a one-year visa and the equivalent of US$40,000 to help develop their business ideas. The Economist notes that, since Start-Up Chile was founded in 2010, “some 500 companies and almost 900 entrepreneurs from a total of 37 countries have taken part.”
Ricardo Geromel, in a recent contribution to Forbes, counts Apple co-founder Steve Wozniak among the enthusiasts of the program: “I would love to go there if I were young. This is the greatest program I have ever seen of this type in the entire world. I will recommend it even to my own kids.” Geromel notes the wide range of businesses that have gotten started thanks to Chilean government assistance, from an Israeli website that is “like the kayak.com for cruises” to an Argentinian “social booking site for hostels, beds, and couches.”
Start-Up Chile is one of numerous efforts, publicly and privately funded, by emerging Latin American nations to convince aspiring high-tech entrpreneurs to set up shop in their countries. The program’s founder, Chilean businessman Nicolas Shea, tells The Economist that as a student at Stanford University, he “saw smart people being kicked out of the United States because they couldn’t get visas to stay.” Many “technolatinas,” inspired by the successes they have seen in the US, are starting companies in their home countries that in previous years they might have started in Silicon Valley.
In Mexico, the amount of money raised by startups more than doubled, from $211 million to $459 million, between 2010 and 2011, according to the Latin American Venture Capital Association. Incentives to start and grow businesses are also expanding in Brazil. But while Brazil, due to its sheer size, may be seen as Latin America’s China, “Chilecon Valley” can help make Chile “the region’s Singapore,” by “welcoming foreign talent and providing businesses with a stable, well-regulated base for their operations.”
There is already some evidence that US law firms are participating in Chilean venture capital deals. Greenberg Traurig recently partnered with (Latin Lawyer; subscription required) Chilean law firm Garcia Magliona y Cia to help ComparaOnline, a Chilean price and services comparison website, receive venture capital funding from Argentina-based Kaszek Ventures.
Could this be the beginning of a long-lasting trend of major US firms profiting from the growth of high-tech sectors not only in Chile, but across Latin America?
Posted by Marianne Purzycki