- To what extent will AIDG make decisions about my business throughout the incubation period?
AIDG will not attempt to control the company’s day to day operations. This is the task of the business’ management team. However for the duration of the incubation period and one year into the repayment period, an AIDG representative will work together with the business to ensure healthy growth and success.
- When the business is established, will AIDG take any of the profits?
No, the business is not expected to give a share of its profits to AIDG. It is however expected to repay the loan portion of the award within a timely fashion and in accordance with the payment terms agreed upon by AIDG and the business.
- Where do the funds come from? If they come from donors, what stipulations/requirements do they have for the use of the funds?
The loan amount of the award comes from AIDG’s Program Related Investment Fund through a grant generously given by the Lemelson Foundation. The grant portion of the award comes from multiple donors who believe that small business development in emerging markets is the key to prosperity.
- Of the $10,000 dollars, will all of it be given at once, or will it be given out as needs arise in the business?
The $10,000 grant will be given out as the needs arise in the business. Where the entrepreneurs wish to use the funds to cover legal fees, tools, equipment or other startup costs before the company is legally incorporated, AIDG will provide these funds via wire transfer to the entrepreneur or the enterprise directly. In the case of legal costs for incorporation, AIDG is willing to cover these directly with the entrepreneurs’ lawyer or law firm. AIDG will pay according to the approved disbursement time schedule negotiated with the entrepreneur.
- What are the conditions of the award? For example, the interest rate that will be charged on the loan or the required payback period?
If selected as a winner, applicants must make a full-time commitment (ie. 35 hours or more per week) to the new business’ development for at least 2 years. Students who apply will not be eligible if their business is put on hold due to time commitment conflicts with their studies. Winners enter into AIDG’s business incubation program where they will receive technical and business planning assistance.
Applicants are required to raise at least 10% of the loan amount in additional financing to support their business. This demonstrates the team’s ability to mobilize at least some capital on their own. This 10% commitment must be fulfilled and demonstrated to AIDG through bank statements before the loan financing is disbursed.
Pending an evaluation of performance within the 6 months of signing the business incubation program contract, the winning team will be eligible for up to US$40,000 in low-interest loan financing to support their business’ growth. Loan financing is dependant upon applicant performance and is governed by the terms set out in the AIDG incubation program contract. 0% interest is applied to the loan during the incubation period; an interest rate of 0 to 5% will be applied thereafter over the 5-10 year repayment period. The exact interest rate within this range will vary based on several factors, including but not limited to the loan amount sought, repayment period, and the growth potential of the business.
Refer to the contest’s rule page at http://guateverde.com/index.php/en/rules for further information on the terms and conditions.
- If I work on weekends, can I still participate in the workshops? Can I send someone in my place?
No. If selected as a finalist, you must be able to travel to Quetzaltenango to participate in all of the required trainings and evaluation. Outside of extenuating circumstances, your failure to attend required workshops or events may result in your disqualification from competition.
- I am already receiving funds/a grant from another organization; can I still receive the award and incubation from AIDG?
Yes. The team may receive funds/grants from other organizations. It is the business’ responsibility however to make sure that requirements to other financiers are not in conflict with the conditions of AIDG’s incubation program.
- Does my business have to make a profit?
Of course. AIDG has no interest in supporting a business is will not be financially sustainable. For startups, the time period from launch to profitability will vary. AIDG is most interested in business ideas that can become profitable within 2 years of inception.
- I have my idea, my market study, etc, but what if my business doesn’t take off/fails? Do I have to pay back the loan?
Yes. While the terms of AIDG loans are more favorable than the typical commercial or bank loan, the expectation of repayment is the same. AIDG does not wish to saddle the winning team with debt that they cannot repay and have several protective measures in place to safeguard both AIDG’s and the new business’ interests. Pending a satisfactory company and management performance review within the first 6 months in AIDG’s incubation period, the winning team will receive its first disbursement of the loan. During this period the team will be required to raise their 10% award match. Future loan disbursements will be made after set milestones agreed upon by both AIDG and the business are met.
- If for some extraordinary reason, I am not able to continue, can someone replace me? What would happen to ownership of the idea – would it continue to be my idea or would it belong to AIDG?
The idea belongs to the company and not to AIDG. The debt is tied to the company not the entrepreneur. In extraordinary circumstances where the entrepreneur must exit the company, AIDG will work with the business to help the entrepreneur accomplish a management transition for the company.
- My understanding is that this will be an annual business competition, if I participate this year but do not win, can I participate again in the future?
Yes. Each competition is open to any applications that fall under the rules and scope of that competition. Future competitions may have specific technology or sector focus depending on the interests of AIDG’s funders (eg Solar, Biogas, Biodiesel, Sanitation Systems, etc.).
- Are there any limitations on the number of family members that I can have on my business team?
No. However do note that the strength of the business’ management team is one of the major criteria that the panel of judges and AIDG’s board will be using in determining the final winner. It should be very clear what role each person listed on the business team plays as well as how they are an asset to the company.
- Do I have to have an already complete business plan in order to enter the competition?
No. The different stages of the competition will result in the development of a full-fledged business plan for the semi-finalist teams.
- What do I have to include in the application?
In addition to the application, the team leader must include CV’s, references for every team member, and official background checks (from the police and court offices).
- If I only have an idea – that is not proven whatsoever – can I still participate in the competition? In other words, do I have to have some proof that my idea is feasible?
Judge evaluations will focus on technical feasibility and marketability of your product. If your idea passes an analysis for feasibility and appears to have a market, AIDG is much more likely to support your work. The better you can present your work and make a case for the design, the more likely you are to gain AIDG’s support. Novelty is a criteria for judging by AIDG so ideas that can be well articulated or that are new will stand a good chance of selection or advancing to the final round.
- Am I allowed to patent my idea?
Yes. AIDG will gladly advise the entrepreneur on taking a patent on their work. That said, there are restrictions around design work performed by AIDG for the entrepreneur with AIDG donor funds. Pro bono design work performed by AIDG for the business shall be released into the public domain. The business can contract AIDG to do design work; this work can be protected under a non disclosure agreement (NDA). The entrepreneur will have to make decisions on how best to pursue technology research with AIDG.
- What happens after the 2 year incubation period? Will AIDG be involved in business at all?
After the incubation period AIDG will be glad to act as a reference for the winning enterprise as it connects with other clients or seeks out other financiers. In the future, we may offer enterprise training sessions to staff of incubated businesses that have exited our program. Stories of note about the progress of our incubated enterprises will be released to the international media through our blog and press releases even beyond the incubation period.
Up to the point where debts to AIDG are repaid, AIDG will require reporting on financial and other metrics. This information will not only help us serve our incubated businesses better, but also enable us to act as advocates to other potential financiers.
- In the event there is a natural disaster or robbery or situation out of my hands that effects my business, who is responsible?
The business remains responsible for all debts that it takes on with AIDG. AIDG however is committed to helping its entrepreneurs succeed. Therefore in the event of such unforeseen circumstances, we will work with the business and potentially restructure loans so it may recover from these occurrences.
- Can I extend the incubation period with AIDG?
At this time, we do not offer the option for a business to extend its incubation period with AIDG. We are examining the possibility of opening our training sessions to staff members of the enterprises that have passed through our incubation period on an as needed basis.
- Can employees of organizations or institutions participating in GuateVerde compete as well?
Due to a conflict of interest, we can not accept applications from employees of any organization or institution involved in the competition.
- What type of business or business ideas may participate in GuateVerde and what may not?
Both new and established businesses may apply, but their products and services must reflect the mission of AIDG. That is, the proposed business should serve to increase access to electricity, water, or sanitation in underserved urban and rural markets using “green” or renewable technology. The business MUST function through the use or sale of green technologies in order to qualify. Any applications that do not distinctly demonstrate the use of renewable technology to increase access to energy, water or sanitation in underserved communities will be eliminated from the competition.
- Once I have completed my application, where do I send it?
Applications must be submitted by email. AIDG will NOT accept applications submitted by postal mail or in person. Any additional documents necessary for submission should be scanned and email with the application. Note: If chosen as a finalist, the application documents sent electronically, must be presented in their original form.
- If I win, can the prize money be used for expenses other than the business?
No. The prize is only meant to be used for the business as outlined in the business plan. Finances will not be disbursed for personal or familial expenses; all disbursements will be made in accordance to the business’s bill of costs and investments.
- Can organizations apply to the competition?
If the organization is planning a for-profit division or a mission-related business, then yes they may apply.
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