12/06/2018
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Finep launched the second notice of the Finep Startup program, which aims to leverage technology-based companies in the final stage of product development or that need to gain production scale, with proven commercial viability. The funder has increased the funding cap – from R$ 50 million to R$ 60 million – and the number of startups that can be supported – from 50 to 60 – in relation to the first call. This time, up to 30 promising companies will be chosen per investment round. The first period for submission of proposals will be open until August 3rd.
The funder will invest up to R$ 1 million in each of the selected startups, which may still receive a new contribution of up to R$ 1 million in the future, as the business plan evolves. There is another novelty in relation to the 2017 public notice: Finep will provide knowledge and financial resources via participation in the capital of companies with annual revenues of up to R$ 4.8 million – previously, support was restricted to companies with revenues of up to R$ 3, 6 million. Competing startups need to have a prototype MVP (Minimum Viable Product or, in Portuguese, Minimum Viable Product), proof of concept or, preferably, already making their first sales. In other words: proposals in the idea or research phase do not fit.
The first round of investment will allocate up to R$ 30 million to up to 30 companies, with the final result expected for November. The second round, along the same lines, will open in January 2019, with the expectation that the approved startups will be known in June of next year. In both rounds, the selection process will consist of three stages: business plan evaluation (elimination and qualifying); face-to-face evaluation panel (elimination and qualifying); and technical visit and evaluation of legal documentation (elimination).
Startups that work in the following thematic areas will be selected: Agritech, Building Information Modeling (BIM), Sustainable Cities, Defense, Creative Economy – Electronic Games, Education, Energy, Fintech, Healthtech, Mining, Oil and Chemistry. Companies that develop solutions in the following enabling technologies can also compete: Biotechnology, Blockchain, Artificial Intelligence, Internet of Things (IoT), Advanced Manufacturing, Microelectronics, Nanotechnology and Augmented Reality, Virtual Reality and Mixed Reality.
Finep Startup: first public notice received more than 800 applications
Finep's objective is to help Brazilian startups to overcome the support gap known as "death valley", a stage in which many of them are disrupted due to lack of resources. Companies at this stage have great difficulty in financing their development, mainly due to the absence of guarantees and cash generation.
Launched in June 2017, Finep Startup emerged to fill the gap between the first investment that a startup receives – around R$ 100 thousand and made, for example, by angel investors – and the contribution made through a Fund of Seed Capital – around R$ 3 million –, depending on the company's degree of maturity. In all, the program's first public notice received 869 applications from startups from all over Brazil. Finep is already in the final stages of contracting 15 companies approved in the first round, and in June started the technical visit to the 25 selected in the second round.
public-private investment
Finep, however, does not intend to make Brazilian startups dependent on public resources. Therefore, it created a pioneering mechanism to encourage entrepreneurs to seek private investment: priority will be given to companies that are contributed by angel investors. The process will work as follows: the startup that signs up for the public notice with a letter of commitment from an angel investor will earn points in the selection. The amount of points obtained will depend on the value of the private investment, whose minimum value is R$ 50 thousand. With the minimum contribution to your business, the bidder guarantees 1 point, reaching a maximum of 5 points. In all, there are 20 possible points: 15 from the assessment of the startup's value proposition and 5 obtained if it receives private investments of R$ 250 thousand or more.
The angel investor who commits to invest in the company selected by the public notice will receive part of Finep's return (which exceeds IPCA + 10), with the aim of increasing their engagement with the company's success. This percentage will be proportional to the angel's participation in the investment round.
The funder will invest up to R$ 1 million in each of the selected startups, which may still receive a new contribution of up to R$ 1 million in the future, as the business plan evolves. There is another novelty in relation to the 2017 public notice: Finep will provide knowledge and financial resources via participation in the capital of companies with annual revenues of up to R$ 4.8 million – previously, support was restricted to companies with revenues of up to R$ 3, 6 million. Competing startups need to have a prototype MVP (Minimum Viable Product or, in Portuguese, Minimum Viable Product), proof of concept or, preferably, already making their first sales. In other words: proposals in the idea or research phase do not fit.
The first round of investment will allocate up to R$ 30 million to up to 30 companies, with the final result expected for November. The second round, along the same lines, will open in January 2019, with the expectation that the approved startups will be known in June of next year. In both rounds, the selection process will consist of three stages: business plan evaluation (elimination and qualifying); face-to-face evaluation panel (elimination and qualifying); and technical visit and evaluation of legal documentation (elimination).
Startups that work in the following thematic areas will be selected: Agritech, Building Information Modeling (BIM), Sustainable Cities, Defense, Creative Economy – Electronic Games, Education, Energy, Fintech, Healthtech, Mining, Oil and Chemistry. Companies that develop solutions in the following enabling technologies can also compete: Biotechnology, Blockchain, Artificial Intelligence, Internet of Things (IoT), Advanced Manufacturing, Microelectronics, Nanotechnology and Augmented Reality, Virtual Reality and Mixed Reality.
Finep Startup: first public notice received more than 800 applications
Finep's objective is to help Brazilian startups to overcome the support gap known as "death valley", a stage in which many of them are disrupted due to lack of resources. Companies at this stage have great difficulty in financing their development, mainly due to the absence of guarantees and cash generation.
Launched in June 2017, Finep Startup emerged to fill the gap between the first investment that a startup receives – around R$ 100 thousand and made, for example, by angel investors – and the contribution made through a Fund of Seed Capital – around R$ 3 million –, depending on the company's degree of maturity. In all, the program's first public notice received 869 applications from startups from all over Brazil. Finep is already in the final stages of contracting 15 companies approved in the first round, and in June started the technical visit to the 25 selected in the second round.
public-private investment
Finep, however, does not intend to make Brazilian startups dependent on public resources. Therefore, it created a pioneering mechanism to encourage entrepreneurs to seek private investment: priority will be given to companies that are contributed by angel investors. The process will work as follows: the startup that signs up for the public notice with a letter of commitment from an angel investor will earn points in the selection. The amount of points obtained will depend on the value of the private investment, whose minimum value is R$ 50 thousand. With the minimum contribution to your business, the bidder guarantees 1 point, reaching a maximum of 5 points. In all, there are 20 possible points: 15 from the assessment of the startup's value proposition and 5 obtained if it receives private investments of R$ 250 thousand or more.
The angel investor who commits to invest in the company selected by the public notice will receive part of Finep's return (which exceeds IPCA + 10), with the aim of increasing their engagement with the company's success. This percentage will be proportional to the angel's participation in the investment round.
In addition to leveraging resources, attracting private investors is essential for the success of the enterprise, as they also add knowledge to the business. Startups do not only need financial resources, but also assistance in matters that are extremely relevant to the future of the business, such as governance and management.
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