There are around 20 business incubators in Chile, and for the last couple of years they have been getting kind of a bad reputation. Their main job is to take government grants (usually seed funds) and allocate them to different projects that they scout through competitions and direct application. Many of these incubators base their business models on taking a percentage of their startups’ sales for up to 5 years, or equity up to 7% to be cashed out in 5 years, or a combination of both. Considering this timeline, it will probably come as no surprise that most business incubators here avoid biotech projects like the plague.
Which is why the case of Austral Incuba, arguably the only business incubator to focus in biotech in all of Chile, is so special. How have they managed to survive while competing with IT-based incubators with shorter timelines, lower risks and less capital-intensive projects?
Originally written for Nature Biotechnology. Check out the full post in the Trade Secrets Blog.