iNNpulsa, housed under the Ministry of Commerce, Industry, and Tourism, works much like a bank, issuing government-funded grants to promising entrepreneurs in everything from health care to food production. However, the more tech-focused initiative, apps.co, focuses on partnering with universities and private companies to provide seed funding, training, and mentorship to aspiring entrepreneurs. Working almost exclusively with entrepreneurs who want to build web-based applications, apps.co will give $33 million dollars to partnering accelerators and university-based entrepreneurship programs from 2012-2014. According to Information Technologies and Communications Minister Diego Molano Vega, most of that money comes from taxes on foreign exports like oil and coal; about ten percent of that revenue is directed toward "innovation projects."
Considering that the Colombian government had to set up significant financial regulations after struggling with accusations of corruption and money laundering in the 1980s and '90s, these direct-funding efforts have gone smoothly -- mostly. "Entrepreneurial leadership in government is clearly an oxymoron," said Bob Dorf, a Columbia University Business School professor and mentor for Lean LaunchPad Colombia, one of the apps.co partner programs. "But other than when you need a contract signed or a bill paid, I haven't seen any of it [in Colombia]... I think [the government has] shown the same kind of courage and truly boundless, laudable energy that I've ever seen in a government or even for-profit organization."
Barreto, who is a native of Colombia, says that privately-run, publicly-funded programs like Socialatom Ventures can help new start-ups avoid the "painful, hard work" of navigating regulatory hurdles with dedicated government relations teams. The administration seems all for this kind of leadership from the private sector, too. "The market as far as possible, the state as far as needed" is the guiding principle for these programs, said Minister Vega, who is acting as a personal mentor for some of the most promising start-up companies in the apps.co program, along with five other ministers from the Colombian government. Catalina Ortiz Lalinde, the Managing Director of iNNpulsa, said that the government sees its programs as "kickstarters, not long-term players. ... We want to imitate the market as best as we can, [because] we believe that this is only sustainable and viable in the long run if we have more private involvement." Some hurdles remain, though: another person familiar with the programs said the government has "filtered the companies that can get into an incubator," making the process of selection and mentorship more difficult.
For entrepreneurs running startups and incubators in Colombia, access to capital will determine whether or not Colombia can be a viable home for tech startups. Juan Diego Calle, the CEO of Colombian-based start-up .co, said that the government's programs have been "very, very clearly" good for their company, explaining that "we're starting to see venture capital firms, private equity investors. ... Three years ago, that was non-existent." Although American companies like Microsoft and Google that have offices in Colombia are helping to build the investor ecosystem in the country, start-ups like .co, which has a big presence in Miami, play a larger role in building confidence among potential U.S. investors. Now, a small portion of the royalties derived from the .co domain contribute to programs like apps.co, which is "something we're pretty proud of," said Calle.