April 28, 1998

TABLE OF CONTENT

  Timetable
  Project Location
  Partners
  Budget Envelope
  Selection Criteria for Initial Stage
  Project Activities
  Contact

IDRC is setting up an action-oriented research program on venture capital finance and management in the Southern Cone of South America. IDRC will co-fund: research and its diffusion; training and the strengthening of education in this area; as well as the creation of pilot projects. The objective is to use IDRC funding to seed the creation of an integrated team of researchers, educators, policy managers and practitioners in Canada and the Southern Cone who will work together to effect change. Their public policy and management research output will help remove regulatory barriers to increase the amount of risk equity funding for new technology- based enterprises. Their training activities will raise the level and availability of specialized management skills necessary for creating and growing profitable ventures of this kind. In addition, the training will provide basic skills, encouragement and information for scientists and engineers to set up their own technology-based enterprises. Their pilot demonstration projects involving angel investors, business management and science and engineering faculties, will encourage investors to set up larger equity funds and encourage established firms to consider strategic alliances with startups. 

IDRC is Canada's International Development Research Centre, whose mandate is to assist developing countries through research and research-related activities. We have recently completed a feasibility and design study on venture capital and are now soliciting Statements of Interest from potential partners to help fund and deliver the project. We welcome a preliminary email or phone call from your organization describing your potential interest in this project, using the information and instructions in the following document. 
 

Timetable

Receipt of Statement of Interest finish June 15 

Partner selection finish June 20 

Detailed design finish Sept 15 

Project operations Nov 15, 1998 to Nov 15, 2000 

Project Location

A feasibility study has been done relating to Argentina, southern Brazil, Chile and Uruguay, with organizations from these countries planned to be the only participants in the project's first 2 year phase. However, we will also consider Statements of Interest from organizations in Mexico, Columbia, Venezuela and Costa Rica to see if we can find ways of working a broader participation into the research and training aspects of the core project in a way that enhances benefits to all parties. 

Partners

IDRC is seeking partners who can design and implement the project, and who can help to mobilize additional financial resources to carry out project activities. Given the novelty and complexity of the project, it is obvious that several organizations will need to be involved, with different roles. Over the next few months we will be organizing an appropriate mix of agencies into a team from the following groups: 

university teaching and research centres involved with this kind of topic in Southern Cone, as the primary recipients

Canadian university and research-related organizations capable of research, training, promotion and capacity building relating to the topics involved

Southern Cone non-university organizations involved with research, training, management or promotion which are capable of delivering specific project items

international development agencies and Southern Cone national innovation system funding agencies interested in co-funding particular compoments of the work

banks and private investment groups interested in increasing investments in new information technology and biotechnology firms

multinational firms who are seeking ways to increase strategic alliances and increase local sourcing.

Budget Envelope

The amount of IDRC's financial contribution will depend on the level of co-funding generated by the partners. IDRC´s contribution to co-funding can go to a maximum of 750K$ CAD, over a two year period, for the whole project. 

Project Development Process

1. Send Statement of Interest. Maximum 5 pages. Please describe: 

your organization's interest in this project

what you can bring to it

how you would handle the issues

what kind of organization and partners you could provide

the possibility of bringing in co-funding. 

Base your response explicitly on the project activities and background information provided here and on our Website. Document may be written in English, French, Spanish or Portuguese. 2. IDRC will discuss with appropriate groups their potential involvement and the work to be done. 

3. IDRC will put potential partners into contact with each other so they can begin to work together and refine the project design by email. 

4. IDRC will fund a project design meeting in Montevideo for the prospective partners to meet face to face and finalize the team and the project outline. 

5. Partners will produce final project design and submit to IDRC and other funders. 
 

Selection Criteria for Initial Stage

Southern Cone and Canadian participants must be able to play an active role in one or more components mentioned in the Project Activities below. Preference will be given to participants who can: 

deliver as many as possible of these components (either alone or in alliance with other groups)

deliver projects that cover multiple countries (more important for the Canadian participants)

attract significant additional funding

create a sustainable design

provide robust management.

 

Project Activities

Two documents are available on IDRC's Web site, at www.idrc.ca/lacro/vencap.html, describing the project we propose and the results of our feasibility study on venture capital in the Southern Cone; it is essential you refer to these for detailed information. In these documents, you will note the feasibility study focussed on venture capital as it related to biotechnology. This emphasis is expected to continue in the full project. Nevertheless, information technologies may also be considered as a secondary field for expression of the venture capital activity. The following 4 activities will be undertaken by the project. Within each of the areas are suggested actions which need to be considered, supplemented and refined. 

1. Research

experience of LAC region with venture capital for new technology-based firms (NTBFs) and the lessons to be drawn

importance of venture capital to NTBFs and industrial development in the region

ways of implementing venture capital consonant with local realities

how to promote angel investment pools as a socially appropriate way to recycle local capital

suitability of intellectual property regulations and capital management regulations

socio-cultural values affecting the implementation of venture capital and how to promote changes consonant with local realities and opportunities

development and deployment of related management skills (innovation, entrepreneurship, alliances, spinoffs, linkages, incubation)

the amount and quality of biotech (and possibly infotech) researchers, technologies and institutions that is available in the region as the "raw material" for company formation and investment.

 

2. Training

organize and deliver work-study periods on key topics for professors and graduate students from the Southern Cone in Canadian universities and related Canadian organizations

development of courses for graduate and undergraduate students in Southern Cone

investigaton of feasibility of setting up university chairs in key areas if they can be leveraged sufficiently

 

3. Diffusion-Promotion

spread knowledge about the elements and importance of this topic in order to encourage complementary followup action being taken by: development agencies, banks, local high tech associations, public innovation funders, public S&T policy groups and private investors

4. Demonstration

set up (university-based?) angel capital networks involving business, engineering, legal students linked to a technology transfer office or an incubator

possibly set up a virtual incubator facility which would deliver the management skills needed by NTBFs in the region

investigate and possibly promote setting up and operating a venture capital pool

 

Contact

Submit preliminary Statements of Interest to Bárbara Miles at bmiles@idrc.ca,  in IDRC Montevideo, tel. (5 982) 902-2031/34