São Paulo – From this Wednesday (28th) on promising technology-based companies at development stage may apply for the Start-Up Brasil program to receive investment. Both Brazilian and foreign companies may apply, according to information released this Tuesday (27th) in São Paulo’s capital by the Ministry of Science, Technology and Innovation (MCTI, in the Portuguese acronym).
“Our goal is to establish and value technology-based entrepreneurship, which quickly generate wealth”, said the secretary for IT Policies of the MCTI, Virgílio Almeida. The program supports 100 companies per year, as much as 25% may be foreigners. They do not need to be based in Brazil, but must stay at least six months in the country to be “accelerated”, as it is called the program’s quick development process.
Foreign companies have been included because it is also one of the goals of Startup Brasil to extend the support worldwide. The program’s operation manager, Vitor Andrade, says that taking part of the program may peak their interest in opening branches in the country, for example. The goal is also to attract talents from other countries to Brazil, according to him.
The project started last year and there have already been two open calls. A total of 88 companies were enlisted, ten foreigners and 78 Brazilian companies. There were 20 foreign selected companies, but only ten ended up signing the contract. Out of the chosen group, four are from Argentina, one from Chile, one from Colombia, two from Ireland, seven from the United States, one from India, one from Israel, one from Holland, one from the United Kingdom and one from Spain.
The difficulty to set up in Brazil was an inhibiting factor for the remaining companies, according to information released to the press. Companies from 37 countries applied for the previous open calls. To claim one of the positions, they are not required a CNPJ (a company registration number issued by the Brazilian government) or a foreign equivalent. But after six months in the program they have to set up in Brazil or in their home country. Brazilian companies, however, need to have a CNPJ for four years or longer. Both Brazilian and foreign companies may receive up to US$ 89,800 (or R$ 200,000) to develop their business if selected.
After receiving the grant, the companies are followed by the accelerator, a kind of greenhouse to help the startup grow, supplying information, training, seeking investment and marketing. In general the accelerator negotiates a stock percentage, called equity, of the company it helps. The average equity negotiated between startups and accelerators in the Brazilian program was 10.41%.
In Brazil
Currently Startup Brasil has 12 accelerators in Brazil, two from Rio Grande do Sul, one from Pernambuco, one from Bahia, three from São Paulo, two from Minas Gerais, one from Espírito Santo, and two from Rio de Janeiro. They also go through a qualification process to be part of the program. They need to supply a minimum investment of R$ 8,900 (or R$ 20,000) for each company they follow and to accelerate six startups, according to the programs rules.
Brazilian startups currently supported by the program come from 15 states in the six regions in Brazil. Most of them (35.6%), however, come from the state of São Paulo. From the total, 14.41% are in IT services and software aimed at retail, 9.32% at education, 8.47% at finances and another 8.47% at health. Other sectors account for smaller percentage.
In this year’s open call, besides software and IT companies, hardware companies may also apply. At the qualification process, according to director of the software and IT services of the MCTI, Rafael Moreira, the business model accounts for 40% of the grade, the solution to 30%, the team to 20% and the market, the ‘environment’ for that activity 10%. Starting this year, Brazilians living abroad for more than three years are also eligible.
The application process starts this Wednesday, May 28th, and end on July 14th.The acceleration process starts between September and October this year. The examining board is comprised of 10 to 20 people It includes academicians, which account for 30% of the board, government representatives, between 10% and 15%, and the remaining members come from the private sector. The open call will be issued on the Federal Official Gazette. The program is supported by the MCTI, alongside the Brazilian Export and Investment Promotion Agency (Apex-Brasil) and the National Council for Scientific and Technological Development (CNPq).
New business
Among the companies supported by Startup Brasil is Love Mondays and Intoo, whose owners attended to the event of the open call’s announcement in São Paulo’s capital. Love Mondays is a virtual platform in which job-seeking professional may gather information from the companies they intend to work for. "In general only the company have all the information on the applicant ", says entrepreneur Caletti. But anonymous testimonials of employees are the database on which you may discover about the company, the daily routine, the problems and advantages.
Entrepreneur Artur Farache explained about Intoo – the company is also a virtual platform, it helps small and medium-size business obtain credit. The platform is comprised of information on these companies, which allows them to find the ideal financial partner to raise funds, increasing the options available, which were restricted to one or two banks in which the companies have accounts on. "We have already mediated US$ 5.3 million (or R$ 12 million) via this platform", said Farache.
For further information:
http://www.startupbrasil.org.br/?lang=en
Love Mondays
www.lovemondays.com.br
Intoo
http://www.intoo.com.br/
*Translated by Rodrigo Mendonça