VCAP
Application round is on going for VCAP.
The Puerto Rico Venture Capital Access Program (VCAP) partners with seed and early-stage startups building in Puerto Rico, deploying investment capital to accelerate their growth.
The Economic Development Bank of Puerto Rico has been designated by the U.S. Treasury as the implementing entity for the $30M allocation destined to the VCAP, with support of parallel18, a program of the Puerto Rico Science, Technology and Research Trust.
Expected program deployment
(USD)
$150K - $2.5M
Investment size
(USD)
Expected number of investees
Puerto Rico is home to fundable companies and boasts a highly specialized market, with leading sectors including bio-engineering, creative industries, pharmaceuticals, and technology. VCAP serves as the vital link connecting capital opportunities with the island's innovative entrepreneurship.
Jamie Rodota
Senior Portfolio Manager
Target companies
VCAP invests up to 50% of any given round, with the remaining 50% matched by private investors. Our commitment is designed to be the catalyst — giving founders the credibility and momentum to secure the private capital alongside us.
For additional information regarding the use of proceeds; conflict of interest; socially and economically disadvantage individuals and very small business (SEDI and VSB); reporting; and certifications.
Headquartered in Puerto Rico
Scalable companies
Must have a clear vision and the ability to execute
Active fundraising
Mayority stakeholders/C-suite level must be permanant residents in Puerto Rico.
Key Features
Once qualifiable investment is made through the VCAP the company will receive additional support.
Capacity building
From the assistance of parallel18 programs and mentors.
Capacity building
From the assistance of parallel18 programs and mentors.
Network initiatives/ Networking events
Access to initiatives & events exclusive to the parallel18 alum.
Network initiatives/ Networking events
Access to initiatives & events exclusive to the parallel18 alum.
Capital initiatives
Access to all initatives that are part of the parallel18 network.
Capital initiatives
Access to all initatives that are part of the parallel18 network.
Monitoring and assistance
To ensure continuous growth.
Monitoring and assistance
To ensure continuous growth.
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Frequently Asked Questions
How do I apply?
You can visit www.parallel18.com/vcap and click the application button in Spanish or English based on your language preference. There are no differences in application form other than translation.
Please note that we are unable to share the submitted application answers, thus, make sure to request a copy at the end of the application form portal.
Are there any exclusions from investments?
The VCAP cannot invest in companies that predominantly engage in professional services provided by accountants, doctors, or lawyers; banking; lending; real estate development; insurance; oil and gas exploration; direct gambling activities, which do not include ancillary gambling businesses such as manufacturers of gaming equipment; or making loans to or investing in a fund manager or affiliates of a fund manager.
Additionally VCAP shall refrain from investing in any entity that:
- Has 500+ employees or personnel.
- Performs speculative activities that gain from price fluctuation.
- Unless its secondary to the principal operations for the enterprise and form a legitimate risk mitigation strategy against price fluctuations.
- Generating net revenue from lending activities.
- Unless it qualifies under:
- Community Development Financial Institution (CDFI) that isn’t a depository institution or bank holding company.
- Tribal enterprise lender not associated with a depository institution or bank holding company.
- Unless it qualifies under:
- Pyramid sales or schemes.
- Engaging in activities barred by federal law.
- Deriving more than 1/3 of its gross annual revenue from lawful gambling pursuits, unless in the Tribal State Small Business Credit Initiative.
- Non-profit organizations.
- Unincorporated entities or sole proprietor entities ‘doing business as’ (DBA).
- Any other entity proscribed by the program is ineligible.
Are the investments made through the VCAP considered a grant or an equity investment?
VCAP provides equity investments by exchanging capital for minority ownership in your company. We rigorously evaluate each investment for its potential financial return. This is not a grant program or non-dilutive funding source.
What types of financial instruments can VCAP invest in?
The VCAP is a direct equity co-investment mechanism, thus only equity and equity-like instruments are considered. The VCAP is unable to consider debt, debt derivatives or any similar instruments. Preferred equity, common stock, convertible notes and SAFEs qualify, among similar instruments.
Where can I find the information relating to how my company can or cannot use the investment capital from the VCAP?
SSBCI funds must be used strictly for business purposes, such as startup costs, working capital, equipment, or property improvements, and cannot be used for passive real estate investment, tax repayments without a payment plan, or reimbursing owners. You can find the full SSBCI guidelines, including restrictions around the use of proceeds here.
How does the VCAP determine if a company is based in Puerto Rico?
We take our commitment to investing in Puerto Rico-based companies very seriously. While we understand that each company’s situation is unique, we assess whether a company is based in Puerto Rico using several key criteria, including, but not limited to:
- The company is registered to do business in Puerto Rico, and is currently in good standing with the Secretary of State of the Government of Puerto Rico.
- The corporate headquarters are in Puerto Rico, and the company publicly purports to be a Puerto Rico-based company.
- The company has an active commercial lease for a Puerto Rico-based office that corresponds with the Corporate Headquarters address.
- The founders and/or co-founders are Puerto Rico residents.
- At least 50% of the equity is owned by residents of Puerto Rico.
If my company is not based in Puerto Rico, am I still eligible for funding?
No. However, we welcome companies that have recently relocated to Puerto Rico. If you’re planning to move here or are currently in the process, you may apply so we can understand your plans and timeline. Your application will only proceed past initial due diligence after your relocation is complete and meets the criteria outlined above.
Does my company qualify for consideration through the Venture Capital Access Program?
Based on the established SSBCI Guidelines by the U.S. Treasury, the VCAP shall refrain from investing in any Investee entity that falls under the following categories:
- Employing 750 or more personnel.
- Aggregating funds, in conjunction with the Program’s contribution or the proposed investment by the venture capital fund, exceeding $20,000,000 within the relevant investment round. This encompasses capital amassed from future issuances of the identical series of securities transacted in said investment round. (Note: Your company remains eligible even if it has raised more than $20,000,000 throughout its lifetime. This limit applies only to a single investment round.)
- Engaging in speculative activities that gain from fluctuations in pricing, such as wildcatting for oil or engaging in commodities futures trading. The exception lies in instances where these activities are subsidiary to the ordinary operations of the enterprise and form a legitimate risk mitigation strategy against price fluctuations inherent to regular operations or standard trade.
- Generating over half of its yearly net revenue from direct lending pursuits facilitated by its own capital, unless it qualifies as either (1) a Community Development Financial Institution (CDFI) that isn’t a depository institution or bank holding company or (2) a Tribal enterprise lender not associated with a depository institution or bank holding company.
- Being involved in pyramid sales, where a participant’s key incentive originates from the sales generated by an ever-increasing number of participants. It is important to note that a lawful multi-level marketing enterprise is distinct from an entity partaking in pyramid sales.
- Engaging in activities barred by federal law or, if allowed by federal law, the relevant legislation in the jurisdiction where the enterprise operates. This encompasses businesses involved in producing, selling, servicing, or distributing products or services connected to illegal activities, excluding instances where such usage can be proven to be entirely unrelated to the enterprise’s intended market. This category includes both direct and indirect marijuana enterprises, as elucidated in Small Business Administration (SBA) Standard Operating Procedure (SOP) 50.10.61.
- Deriving more than one-third of its gross annual revenue from lawful gambling pursuits, unless the business is a participant in the Tribal State Small Business Credit Initiative (Tribal SSBCI). In this context, a Tribal SSBCI participant is prohibited from utilizing SSBCI funds for gaming activities, yet remains unrestrained in employing SSBCI funds for non-gaming endeavors due to an organizational association with a gaming enterprise. Within Tribal SSBCI programs, the term “gaming activities” exclusively encompasses “class II gaming” and “class III gaming,” as elucidated in the Indian Gaming Regulatory Act (IGRA), 25 U.S.C. § 2703.
- Any other entity proscribed by the Program as ineligible for investment from time to time.
How does the VCAP determine if a company is based in Puerto Rico?
We take our commitment to investing in Puerto Rico-based companies very seriously. While we understand that each company’s situation is unique, we assess whether a company is based in Puerto Rico using several key criteria, including, but not limited to:
- The company is registered to do business in Puerto Rico, and is currently in good standing with the Secretary of State of the Government of Puerto Rico.
- The corporate headquarters are in Puerto Rico, and the company publicly purports to be a Puerto Rico-based company.
- The company has an active commercial lease for a Puerto Rico-based office that corresponds with the Corporate Headquarters address.
- The founders and/or co-founders are Puerto Rico residents.
- At least 50% of the equity is owned by residents of Puerto Rico.
If my company is not based in Puerto Rico, am I still eligible for funding?
No. However, we welcome companies that have recently relocated to Puerto Rico. If you’re planning to move here or are currently in the process, you may apply so we can understand your plans and timeline. Your application will only proceed past initial due diligence after your relocation is complete and meets the criteria outlined above.
What if my company has existed for a long period of time? Do we still qualify for investment?
The age of your company is not a consideration in the application process.
Will VCAP invest in my company if we have already taken on debt?
Holding debt with your company does not disqualify you from applying for investment.
What are the key investment focus areas of the VCAP?
The VCAP is sector and industry agnostic but is interested primarily in high-growth ventures that align with Puerto Rico’s current economic development strategies including Biopharmaceuticals & Life Sciences, Financial Technologies & Services, Energy, Manufacturing, Supply Chain & Logistics, DeepTech, Artificial Intelligence, and Travel & Tourism, to mention a few. If your sector is not listed here, you are still welcome to apply.
What ongoing reporting or information requirements are expected of companies that receive investment from VCAP?
We require quarterly reporting on key metrics including traction, jobs created, cash balance, and other business performance indicators. We may also request a formal Board Observer seat to maintain appropriate oversight as stewards of public funds.
How do I apply?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
What does the process after application look like?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
How often are deployments expected to happen?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Are the investments made through the VCAP considered a grant or an equity investment?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
What types of financial instruments can VCAP invest in?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
How much capital do I need for a match to be compliant with the requisites of the program?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
How much funding can my company request from the VCAP?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Where can I find the information relating to how my company can or cannot use the investment capital from the VCAP?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Can I apply for consideration without having raised investment capital?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Will VCAP lead my fundraising round?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Will VCAP wire their investment commitment before I’ve secured additional investors?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Can VCAP help me raise capital for my company?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Will VCAP help with my attorney fees?
P18 welcomes companies from around the world to help them scale from Puerto Rico to global markets. Our mission is to invest in and accelerate the world’s most ambitious founders while positioning Puerto Rico as a global launchpad for innovation and technology-driven entrepreneurship.
Questions?
Get in touch!
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