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Puerto Rico Venture Capital Access Program

The Puerto Rico Venture Capital Access Program (VCAP) aims to close the gap in access to capital for Puerto Rico-based seed and early-stage startups who seek to leverage private capital as part of their growth strategy. The program is an initiative of the Economic Development Bank of Puerto Rico in collaboration with parallel18, a program of the Puerto Rico Science, Technology and Research Trust.

Overview

The Puerto Rico Venture Capital Access Program (VCAP) aims to close the gap in access to capital for Puerto Rico-based seed and early-stage startups who seek to leverage private capital as part of their growth strategy.

The inaugural funding source for the VCAP is the State Small Business Credit Initiative (SSBCI), authorized by the American Rescue Plan Act of 2021.

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.

We know that the main factor limiting the potential for business growth in Puerto Rico is the lack of access to capital. Through the Venture Capital Access Program, we seek to fill that gap and promote access to venture capital that will impact startups on the island.

For more information on SSBCI guidelines Click Here

Target Audience and Qualifications:

The program is seeking to invest in companies that can demonstrate that they can create economic impact in Puerto Rico. They should be companies that;

Have the potential to create jobs in Puerto Rico.
Whose main offices and principal place of business is in Puerto Rico.
Companies whose majority ownership in the company is permanent residents
of Puerto Rico.
Have investment committed by an accredited investor under the definition of
the Securities and Exchange Commision (SEC).
Are high-growth or scalable innovative companies that are developing
technological solutions or providing a competitive advantage in their services.

Application & Selection Process:

Applications to the program are open continuously during the year.

The VCAP has 4 quarterly review and selection cycles. The next four review cycle dates are as follow:

Fall Cycle: September 2024
Winter Cycle: December 2024
Spring Cycle: March 2025
Summer Cycle: June 2025

Applicants should expect a next step email within two to three weeks after the review cycle begins with status update. The next steps for the applicants will be sent via email from [email protected]. If an applicant is found to meet program requirements they should expect to enter an evaluation period where additional documentations and clarifications may be required. Investment is not guaranteed at any step of the process after the review period.

Key Features

Once qualifiable investment is made through the VCAP the company will receive additional support from the Parallel18 entrepreneurship network. This includes;

Capacity building from the assistance of parallel18 programs and mentors.
Access to capital Initiatives that are part of the parallel18 network.
Access to network initiatives/networking events exclusive to the parallel18
alum.
Monitoring and assistance to ensure continuous growth.

Exclusion from investment:

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
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’
Any other entity proscribed by the program as ineligible.