Grupo Guayacán, Inc. (GGI) announced Wednesday the official launch of the new Puerto Rico IDEA Seed Fund, in collaboration with Fundación Banco Popular, the Georgia Institute of Technology, and several entrepreneurs participating as private investors.
The launch of this new investment vehicle is funded through a grant from the Economic Development Administration’s 2015 Regional Innovation Strategies Program, which seeks to advance innovation across the United States by spurring capacity building and access to capital for innovators and entrepreneurs.
The Economic Development Administration awarded GGI, with one of only eight Seed Fund Support grants totaling $250,000. In total, the Regional Innovation Strategies Program awarded $10 million in 25 grants across the U.S. GGI, the only winner in Puerto Rico, was selected from 170 applicants.
The grant allowed GGI and its partners to jumpstart a historic public-private-nonprofit partnership creating IDEA as a new investment vehicle to provide much needed capital to high potential, high growth, early stage ventures, or Innovation-Driven Enterprises (IDEs), in Puerto Rico, GGI Executive Director Laura Cantero said.
“Lack of access to early stage capital for entrepreneurs has been identified as one of the key factors limiting the exponential growth of the local entrepreneurial ecosystem, as well as the potential of local ventures to grow and scale globally from Puerto Rico,” said Cantero.
IDEA will serve this need by providing phased, milestone-based funding, of up to $225,000 per start-up, to promising projects meeting the criteria of innovation and scalability. The Fund will support IDEs stemming from the local startup ecosystem, private companies, as well as university-spinoffs arising from academic research.
Cantero also stressed the importance of the program’s private and public partners, including Fundación Banco Popular, the corporate foundation of Puerto Rico’s leading financial institution; Georgia Tech, a national leader in entrepreneurial and economic development; and several local entrepreneurs acting as private investors who bring years of industry experience and a vast network of resources to support the start-ups.
“We are proud to collaborate with this strong group of partners to deliver an innovative solution to increase access to capital for entrepreneurs and innovators,” said Cantero.
“Through this project, Guayacán seeks to continue to promote the private equity market in Puerto Rico and to develop a variety of alternatives for local entrepreneurs to access the capital they need to start and grow their businesses,” she added. “This is critical for Guayacán’s mission, the entrepreneurial ecosystem and, ultimately, for Puerto Rico.”
Banco Popular is a longtime supporter of GGI’s entrepreneurial development efforts and has been a partner on several initiatives throughout the organization’s 20-year history.
The bank intensified its efforts to accelerate the development of an entrepreneurial and innovation culture in 2012 with the establishment of the multisector alliance Echar Pa’Lante that includes entrepreneurship education initiatives with GT, and more recently with the launch of Start-Up Popular.
“We believe that a strong entrepreneurial ecosystem is key to help restore Puerto Rico’s economic growth,” said Beatriz Polhamus, executive director of Fundación Banco Popular.
“The IDEA Seed Fund is the perfect opportunity to support entrepreneurs that want to start or grow their businesses through innovation,” she said.
The new grant marks the continuation of GGI’s partnership with both the Economic Development Administration and Georgia Tech, with whom they launched the inaugural cohort of the customer discovery boot-camp, I-Corps Puerto Rico.
“Georgia Tech is fortunate to partner with Grupo Guayacán in the establishment of the IDEA Seed Fund which will support high potential startups in their quest to reach both local and global markets,” said B. David Bridges, Director of Startup Ecosystems and AVP of the Enterprise Innovation Institute’s International Initiatives at Georgia Tech.
“This vehicle addresses a critical barrier for startups in Puerto Rico; the lack of access to small, early stage capital for commercializing customer validated ideas. Georgia Tech has been working for well over three years with members of the startup ecosystem in Puerto Rico on efforts much like this and we believe IDEA is another important step toward growing a thriving innovation and entrepreneurship culture on the island and we are honored by EDA’s continued support,” Bridges said.
Applications for the Fund’s first cohort can be accessed through bit.ly/IDEAseedfund. IDEA will accept applications for its first funding round of $25,000 per start-up until Jan. 15, 2017.