The Puerto Rico Science, Technology and Research Trust was selected as one of the 44 nonprofit entities will receive funding from the U.S. Economic Development Administration’s Regional Innovation Strategies Program, which will award a total of $23 million to expand high impact entrepreneurship.
The Trust will launch the Investor Bridge Project based on Puerto Rico’s needs and opportunities related to development of technology-based businesses by increasing investor resources to startup, technology-based entrepreneurs.
“The technology-based economic sector is growing exponentially in post-Hurricane Maria Puerto Rico. This opportunity is especially timely as there exists a gap in matching investors with local startups, as well as connecting with and educating potential investors on Puerto Rican opportunities,” the EDA said on its website.
“Hence, the Investor Bridge Project will create an investor education series, expand the investor network, and launch a formal investment fund with a target size of $10 million to acquire capital to invest in startups and other companies from the Puerto Rico tech ecosystem,” the agency added.
Over two years, the Investor Bridge Project anticipates facilitating investments in 10 companies and supporting the creation of at least 50 jobs.
The funds will be destined to the Parallel18 program to create an educational initiative aimed at individuals interested in investing in high-impact companies in Puerto Rico, and subsequently launch a formal investment fund of at least $10 million to support the growth of the island’s technology and innovation ecosystem.
This project is a complement to P18 Ventures, a monitoring fund that co-invests in companies that graduate from the Parallel18 accelerator, which is part of the Trust, nonprofit executives said.
In the past three years, P18 Ventures has invested more than $1.1 million in 16 companies, which together have raised more than $13 million in additional money from local and foreign investors to expand their business to international markets from Puerto Rico.
The 2019 winners of the program — known as the i6 Challenge — will benefit from an additional $26 million in matching funds from a variety of public and private sector sources, the Trust said.
“It is a great achievement for the Trust to have been selected by the EDA for the second consecutive year to receive funds from its i6 Challenge program, which is highly competitive,” Gilberto Márquez, CFO of the Trust, said.
“But more importantly, with this program the Trust continues its objective of strengthening Puerto Rico’s innovation ecosystem through the creation of a seed capital fund,” Márquez said.
“With this fund, we continue to eliminate one of the sector’s biggest challenges, which is the availability of alternative financing for high-tech companies, so necessary to allow their development and contribution to the island’s economy,” he said.
Lucas Arzola, director of Operations for parallel18 and who is in charge of P18 Ventures, stressed that with the growth of the innovation ecosystem the need for capital has also increased so that these new companies can reach their maximum potential and can reach global markets quickly.
“We believe it’s important to provide educational resources to people who have the capacity and interest to support entrepreneurs with capital to generate favorable transactions for both parties. Investment in startups is risky, but we know that the experience can be positive and can generate productive, long-term relationships,” said Arzola.