IDB Lab launches Call for Proposals for Venture Capital Funds

Deadline: 26-Feb-21

IDB Lab is launching a Call for Proposals for venture capital funds with a focus on Latin America and the Caribbean seeking equity financing. This call will also contribute to expand the frontiers of VC markets and increase early-stage financing in LAC.

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Through its fund investment activities, IDB Lab seeks to contribute to unleash the potential of innovation to generate greater development impact and social inclusion with a special focus on poor and vulnerable populations across LAC, as well as to bridge key financing gaps in countries, sectors, and business models in which there is an unsatisfied demand for investments from early-stage entrepreneurs.

IDB Lab, the innovation laboratory of the Inter-American Development Bank (IDB), is one of the most active venture capital (VC) fund investors in Latin America and the Caribbean (LAC), having invested in over 90 funds since 1996 and a current portfolio composed of over 50 funds.

IDB Lab aims to invest in VC funds that are aligned with one of the following four approaches:

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This grant-making trust inviting Charities to help Socially Disadvantaged Groups during COVID-19

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USD $250,000 to $2 million funding available for each selected partner to address Covid-19 impact in select countries

Funding provided through capital support for community development projects

Endowment Funding of € 25,000 for young people fighting for freedom

Small Grant Fund for protecting endangered animal species

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Nascent and Emerging Ecosystems. Funds that invest primarily in nascent or emerging early-stage ecosystems such as Central America, Caribbean and selected markets in South America, such as Peru, Ecuador, Paraguay, Uruguay, and Bolivia.
Regionalizing Funds. Funds with regional strategy, which in addition to targeting more developed early-stage ecosystems, include nascent or emerging ecosystems to promote regional integration and knowledge transfer from more mature to emerging VC market within LAC.
Sector Specific Funds. Funds specializing in high-impact sectors with pronounced structural capital gaps resulting from unmet demand by early-stage entrepreneurs, such as Health/Biotech, Edtech/Workertech, Agtech/Foodtech and Climatetech, among others.
Diversity Lens Investing Funds. Funds led by a diverse team in terms of ethnicity, race, and gender whose thesis are equally focused on diversity, in accordance with IDB´s Lab goal of anchoring the first LAC VC fund with such an approach.
Eligibility Criteria

Fund managers who wish to participate in the selection process must comply with the following requirements:

ALIGNMENT WITH IDB LAB´S INVESTMENT THESIS: With the goal of expanding the frontiers of VC markets to help close the persistent gaps in early-stage financing in LAC, IDB Lab seeks to invest in VC funds aligned with at least one of the following four approaches:
Nascent and Emerging Ecosystems: Funds investing primarily in nascent or emerging early stage ecosystems such as Central America, Caribbean, and selected markets in South America -such as Peru, Ecuador, Paraguay, Bolivia, and Uruguay (“nascent or emerging ecosystems”). To develop local capacity in the above-mentioned ecosystems IDB Lab can invest in emerging/first-time fund managers with strong teams, ideally with relevant operational and/or angel/early stage investing experience and strong expertise in local markets, including the use of combined hybrid debt instruments.
Regionalizing Funds: Funds with regional strategy, which in addition to targeting more developed early-stage ecosystems includes nascent or emerging ecosystems to promote regional integration and knowledge transfer from more mature to emerging VC markets within LAC. Funds led by seasoned managers with a solid VC investment track record that show clear thesis alignments and strong regional networks.
Sector Specific Funds: Funds specializing in high-impact investments and sectors with pronounced structural capital gaps resulting from unmet demand by early-stage entrepreneurs, such as Health/Biotech, Edtech/Workertech, Agtech/Foodtech and Climatetech, among others. Fund managers combining deep sectoral expertise, operational and investment track record and undisputed specific technical/scientific expertise.
Diversity Lens Investing Fund: IDB Lab seeks to promote gender-ethno-racial diversity in the LAC Venture Capital industry by anchoring the first LAC VC Fund that adopts a “Diversity Lens” investment thesis focused on investing in companies led by a gender-ethno-racially diverse group of founders. Fund manager should be comprised of a diverse group of professionals (gender-ethnicity-race) from a LAC member country, or with proven experience with startup financing and presence in countries in the region.
GEOGRAPHIC FOCUS: Mandate must be to invest at least 80% of the fund in companies in Latin America and Caribbean (LAC).
STAGE OF TARGET INVESTMENTS AND MINIMUM FUND SIZE: Early-stage investment funds (Preseed to Series B investments) with a minimum size of USD 20M.
TEAM: Qualified management team with:
Track record or experience in making and managing early-stage investments.
Experience and presence in LAC region.
Full- or significant-time dedication to the fund.
Complementary skills in management team (financial, operational, entrepreneurial, etc.).
Expertise in eligible sector-related projects and/or companies.
Demonstrated ability to source deals from LAC countries, with a relevant pipeline of potential investments.
IMPACT MAINSTREAMING AND MEASUREMENT: Fund manager following a transformational or impact-oriented mission clearly incorporated into the fund´s investment strategy.
GENDER AND DIVERSITY: Strong commitment or intentions to advance gender and diversity both at the fund manager and portfolio company level.
For more information, visit https://www.iadb.org/en/news/idb-lab-launches-call-proposals-venture-capital-funds