he value is in the mentorship, skills, education and inspiration, and in many cases the value comes from being selected. It’s like a form of validation.”
It works both ways, as mentors working with start-ups are given access to the frontline innovators in their industry sectors, knowledge that also helps in their roles.

Purpose aims to help digital start-ups with funding, mentoring, access to legal and financial advice, new technologies and premises

accelerators are still essential to the growth of entrepreneurial ecosystems not only because they provide a petri dish for innovation, but because they create jobs. In an article on AllThingsD today, Jed Christiansen contends that the fundamental value of seed accelerators lies in their ability to both drive economic growth and foster an entrepreneurial culture within local communities.

Why important
Startups, small businesses and accelerators are critical pistons in the engine of job creation; there are a few who would argue with that. However, research from the Kauffman Foundation puts into perspective just how important they are. It suggests that, between 1980 and 2005, all net job growth emanated from companies fewer than five-years-old. When it comes to how to best reverse an economic downturn, about the only thing you might find politicians agreeing on is the importance of supporting small businesses.
For accelerators, it doesn’t matter whether or not all of their startups raise big rounds of venture capital, it matters how well their graduates can build a network of support for their peers and for future companies. The deeper and more robust it becomes, the more success startups find and the more jobs they collectively create.

One of the more interesting results was that the funding they received was the least important aspect of the program. What mattered more was the community they were accepted into via the accelerator. As more and more start-ups go through each program, the alumni network becomes bigger, more diverse, and stronger. Thus, each class of start-ups receives more value than the class before it, building a virtuous circle.

These are brand-new, high-value knowledge worker jobs. And even if an individual start-up fails, founders’ experiences will be very valuable to traditional corporate employers.

Failure percentage
In fact, as Peter Relan said in a recent post (riffing on Chris Dixon), accelerators have become an industry segment in their own right. He also goes so far as to surmise that — just as it is for startups — 90 percent of accelerators are likely to fail.

How many startups will you do? You need to know how many companies you bring into your accelerator. If you go small, you can work more closely with each one. But your odds of financial success are lowered. Go for volume and your odds of there being a breakout or two increase, but your time commitment to each one drops. There’s also the question of deal flow and how many you can actually bring in that are high enough quality. You don’t want to compromise to fill a quota.

Where I think there’s opportunity is for accelerators to differentiate across different variables (just like we recommend startups should do): business model, strategy, target market, etc.

Find Ben Yoskovitz follow up post
Buy Ted Gonder article

SUP
CORFO’s Start-Up Chile program seeks to consolidate Chile as a hub of innovation and entrepreneurship in Latin America. In its first stage, the program focuses on attracting high-potential entrepreneurs whose start-ups are in early stages to Chile, where they will use the country as a platform for a global launch. With these start-ups and their Chilean counterparts, the goal is to strengthen a collaborative start-up ecosystem that is intimately connected to the major global hubs of innovation.

both early stage ideas without any prototypes whatsoever and started project under two years old were accepted.
-maybe they could look into allowing further developed products to join the program

what sup is doing right
Privitera told me about his experience with Startup-Chile:
It gave me access faster and simpler to some “Silicon Valley-like” resources that would have taken longer in SV itself. Start-Up Chile (short: SUP) built from scratch a small scale SV with all the resources, networking, vision, “structure” that you could find in the “real” SV, but a key difference is also that in SUP you are not a “number” like in SV, you have a clear identity and SUP ecosystem is doing the best to help you out. On top the intra-SUP networking itself is a little bit higher quality than intra-startups in SV because the startups in SUP have been selected, in SV “everyone” can just go and try.
Again, there are no preferred sectors; the main criteria is to convince the jury that your concept is scalable.

Top-performing incubation programs often share common management practices.

Practices most represented among high-achieving programs are having a written mission

statement, selecting clients based on cultural fit, selecting clients based on potential for

success, reviewing client needs at entry, showcasing clients to the community and

potential funders, and having a robust payment plan for rents and service fees. All of

these practices are highly correlated with client success. Conversely, incubation programs

with lax or no exit policies typically have less-than-optimal performance.
Incubator advisory board composition matters.
Having an incubator graduate firm

and a technology transfer specialist on an incubator’s advisory board correlates with

many measures of success. Additionally, accounting, intellectual property (patent

assistance), and general legal expertise on the incubator board often result in better-8

performing programs. This study found that government and economic development

agency representatives also play key roles in enhanced client firm performance, as their

presence ensures that the incubator is embedded in the community, which is necessary for

its success. Local government and economic development officials also help educate

critical funding sources about the incubation program and its successes.

This finding could suggest that collecting outcome data demonstrates a positive return on investment

and ensures continued program funding, leading to a situation in which success breeds

success.

Focus on
Instead, the most important goals of topperforming incubation programs are creating jobs and fostering the entrepreneurial

climate in the community, followed by diversifying the local economy, building or

accelerating new industries and businesses, and attracting or retaining businesses to the

host region.

All measures of the growth or size of a host region’s economy are poor predictors of

incubation program outcomes. Incubator management practices are better predictors of

incubator performance than the size or growth of the region’s employment or GDP. Only

the aggregate host region employment in 2007 was a strong predictor of any incubator

outcome – change in affiliate firm FTE from 2003 to 2008.

Services to Provide
Incubator management and stakeholders should review the current array of services

provided through the incubation program and assess the effectiveness of those

services periodically. Services that are statistically significantly related to client

firm performance include: (1) providing entrepreneurial training (from business

basics to comprehensive training in managing a new enterprise); (2) offering

increased access to investment capital; (3) securing strong supportive relationships

with local area higher education institution(s); (4) providing production assistance

(from R&D and prototyping through to engineering production systems); and (5)

developing strong mentor programs (e.g., shadow boards, loaned executives, 12

periodic engagement with incubator managers, participation in program activities).

In addition, incubation programs should not overlook the obvious services needed

by start-up businesses and provide high-speed broadband Internet access, shared

administrative services and office equipment, and assistance with client

presentation and business etiquette skills.

Evaluate program
Funders and incubation practitioners should evaluate incubation programs

periodically through two different – though interdependent – units of analysis:

outcomes and processes. Client firm performance (outcome analysis), as measured

by various proxies (survival rates, jobs created, revenues, taxes paid, intellectual

property created, etc.), is the first level of program evaluation. While data collection

should occur at least annually, the analysis can be conducted every three to five

years. Analysis of incubator processes should be conducted more frequently and

cover a wide variety of systems. Services offered, advisory board composition,

service providers, budgets, entry/exit criteria, and program effectiveness all should

be reviewed periodically, although some more often than others. This evaluation

should be linked to any public funding.

International

Recently, a new form of business incubation program has emerged, which focuses on helping

foreign firms enter the U.S. market. These international business incubators provide the same

set of entrepreneurial services as a typical incubator, but they concentrate on providing a “soft

landing” for international firms that want to access U.S. markets, partner with U.S. firms, or

access other resources. Some specialized services offered by international incubators that are

above and beyond typical business incubation services include translation services, language

training, help obtaining business and driver’s licenses, cultural training, immigration and visa 17

assistance, and housing assistance. Immigration services are often extended to trailing spouses

and children, making it easier for foreign entrepreneurs to settle into their new location.

Benefits
Business incubation is an important economic development tool that – when conducted in

accordance with best practices and based on due diligence – can foster job creation, increase

wealth creation, and serve as an important contributor to the national economy.

Why failure is good
Sitkin (1992) explained that one reason why failure offers benefits is because it is often easier

to pinpoint why a failure has occurred than to explain a success, making failure analysis a

powerful mechanism for resolving uncertainty. According to Black and Scholes (1973),

scholars can begin to make systematic progress on better analytical models of entrepreneurial

value creation by carefully analyzing failures.

Foreign talent is essential - http://www.economist.com/news/business/21575750-long-exporter-talent-latin-america-now-importing-it-new-new-world

Its all about the people http://www.paulgraham.com/siliconvalley.html

Real goals
Start-Up Chile aims to have backed 1,000 fledgling firms by the end of next year, at a cost of $40m. It has already sired some successes such as CruiseWise, an online cruise-booking service, that have gone on to raise capital from other sources. However, it should really be judged by the two yardsticks Chile’s government set for it. Has it raised Chile’s profile abroad as a hub for enterprise? And has it inspired Chileans to start their own businesses?

Problems
Not everything is cool in Chile, however. Local entrepreneurs—and foreign ones who might consider staying on after their time on the Start-Up project—face tough challenges. There are not enough private venture capitalists to support young firms with money and advice. Nor do Chile’s universities spawn start-ups nearly as fast as America’s do. Many ambitious start-ups in Chilecon Valley hope to graduate some day to Silicon Valley.
Another barrier to creating a vibrant start-up culture is Chile’s harsh bankruptcy regime, which makes it hard for those who fail to start afresh. Also, the economy is dominated by a few vast business empires and an extremely conservative bureaucracy. Ironically, this is threatening to stifle a peer-to-peer lending business that Mr Shea, Start-Up Chile’s founding father, recently launched (seebox).
But with an underdeveloped venture capital industry, there’s still a shortage of money available for high-risk, high-potential start-ups.

Solution
CORFO has sought to address this by launching a variety of initiatives that encourage the formation of seed, venture capital and angel funds. Programs in these areas provide long-term loans and financing to investment funds that place their capital in innovative companies. The goal is to bridge the funding gap between start-ups’ riskiest initial phase and later stages, enabling promising entrepreneurs to access more traditional forms of financing such as private equity, bank loans or initial public offerings.

Another shortcoming is Chile’s low investment in research and development (R&D), which amounted to only 0.4 percent of GDP in 2010 according to the Ministry of Economy—far below the OECD average of 2.4 percent. CORFO is trying to plug the gap between science and industry with its International R&D Centers of Excellence program, which partners with successful R&D centers overseas.
Four such R&D centers, including Fraunhofer-Gesellschaft, Europe’s largest applied R&D organization, have already set up operations in Chile, and CORFO plans to attract up to 10 additional corporate and nonprofit R&D labs by 2014. The goal is for these centers to work with local universities and companies, implementing global best practices and stimulating local innovations.
To further sweeten the pot, Chile instituted tax incentives in September aimed at encouraging greater corporate investment in R&D. The incentives, valid for both in-house and external R&D, offer a tax credit of 35 percent of the operating expenses and investments in fixed assets; the remaining 65 percent can be claimed as tax-deductible.

Conclusion?
By improving conditions for entrepreneurship and innovation in Chile in a way that builds on the country’s strengths and promotes global collaboration, Chile hopes to improve its economic competitiveness.
The start-up ecosystem is clearly still in the early stages, but all the factors are in place for Chile to establish itself as an international hub of innovation and entrepreneurship in Latin America and the world over the next decade.

Talk about peripheral benefits and maybe measurements and maybe growth rate

What is SUP
CORFO’s Start-Up Chile program provided six-month seed grants of $40,000 each to early-phase entrepreneurs from all over the world to attract the best ideas and, it was hoped, to generate the dynamic environment and cross-pollination characteristic of innovation hotspots like Silicon Valley.

Case
-find out gov objectives
-how to integrate alumni (very important, refer to points from above)
-blockbuster hit through quality or quantity (talk about tradeoffs in time commitment and failure rate)
-how to fit with cofro
-read recommended reading!!

Potential write-up
Intro to company. What theyre doing well. Focus on slow growth meticulous growth, don’t want unmotivated people, quality (potentially take equity stake to have more commitment/involvement now that theyre a big brand name). still want the quantity because of high failure rate, but small enough to devote enough resrouces to each. Keep building on alumni this is the strength of incubator. Talk about peripheral benefits- job creation, skills to go work in corporations, entre. Society, how theyre perceived from the outside (program will only get better as they get more recognition and attract bigger names in terms of entrepreneurs and VCs)
-maybe talk a little about how you cant just cookie cutter a accelerator system, it has to fit the local environment