Chile's government sent the so-called "Fund of Funds" bill to the Chamber of Deputies on October 28, 2026. It would allow Corfo, the state development agency, to buy units in venture capital funds that finance startups, instead of only lending them money as it does today. The bill, bulletin No. 18,819-03, was filed with "suma" urgency and proposes that Corfo may invest US$25 million in its first year, according to the Ministry of Economy.
It sets two caps: Corfo may own up to 35% of each fund of funds and up to 30% of each venture capital fund it invests in directly. The bill was presented by Daniel Mas, minister of both Economy and Mining, and Corfo's executive vice president, José Ignacio Mujica. The government's diagnosis is that Chile topped LAVCA's venture capital environment ranking from 2006 to 2018, but now receives only 5.8% of that investment in Latin America.
What Corfo's Fund of Funds is
A fund of funds does not buy companies; it buys units of other funds. In this case it will pool money from several investors, with Corfo as an "anchor investor", and spread it across venture capital funds that in turn invest in startups. According to the legal summary by DOE, the bill creates two routes:
| Route | Fund of funds | Direct stake in venture capital funds |
|---|---|---|
| Corfo's ownership cap | 35% of each fund's equity | 30% of each fund's equity |
| Managed by | A general fund manager (AGF) supervised by the CMF | Private managers of funds set up in Chile (Law 20,712) |
| Investment mandate | More than 70% of assets in venture capital funds | At least 80% of assets in qualifying startups |
| Expected leverage | About US$15 from other investors per US$1 from Corfo | At least 2.3 pesos from other investors per peso from Corfo |
| Length of the authorization | 15 years | 10 years |
Sources: Ministry of Economy and DOE Actualidad Jurídica, based on the bill's message. Corfo will not pick startups: decisions on each company remain with the private fund managers, and funds must be selected through public procedures with objective criteria.
How much money Corfo would put into the Fund of Funds
The bill proposes that Corfo may commit US$25 million in the first year. Later amounts would be set in each annual Budget Law. If the government's 1-to-15 ratio held, those US$25 million could be matched by about US$375 million from other investors; that figure is our own calculation using the official ratio, not a target in the bill.
| Bill detail | Value |
|---|---|
| Bulletin | 18,819-03 (presidential message) |
| Filed | October 28, 2026, Chamber of Deputies |
| Urgency | Suma |
| Corfo's contribution in year one | US$25 million |
| Corfo's maximum exposure to a single fund | 35%, counting direct and indirect stakes |
| Deadline for the regulation | 9 months after the law is published |
| Review of results | Every 7 years (Ministry of Economy) |
Sources: Chilean Senate, bill tracking for bulletin 18,819-03, Ministry of Economy and DOE. The bill also bars Corfo from simultaneously granting loans, guarantees or subsidies to a fund in which it holds units, and gives the other investors an option to buy Corfo's stake so that public capital can be replaced by private capital over time.
Why the government is proposing the Fund of Funds
Today Corfo supports venture capital mainly through preferential loans to funds, which then invest in startups. The government argues that this model helps companies get started but not scale up. "Startups get funding to be born, but not to scale, and end up moving their headquarters abroad, taking skilled jobs, intellectual property and investment with them," Mas said, as quoted by Diario Financiero.
Under the new scheme Corfo would share risks and returns like any other investor. According to DF, the design seeks to attract institutional investors such as pension fund managers and insurers, which usually require large, diversified funds before committing. A similar debate about channeling long-term savings into Chilean companies came up in the capital markets reform.
- For funds: they could add Corfo as an equity investor, not just a lender.
- For startups: more capital in the growth stage, when funding rounds are larger.
- For the state: a share of the gains if investments do well, and of the losses if they do not.
- Local impact requirement: funds that receive Corfo money must invest in Chile at least an amount equal to the public contribution.
Next steps for the Fund of Funds bill
The bill is in its first constitutional stage in the Chamber of Deputies. According to the Senate's tracking record, it was reported to the floor on October 28 and sent to the Economy Committee and, where relevant, the Finance Committee.
| Date | Step |
|---|---|
| 10-28-2026 | Bill filed, with financial report No. 261 |
| 10-28-2026 | Reported to the floor: sent to the Economy and Finance committees |
| 10-28-2026 | The executive applies "suma" urgency (message 422-374) |
| Next step | First report of the Economy Committee |
Source: Chilean Senate, bill tracking system, checked on November 1, 2026. Under the Organic Law of Congress, "suma" urgency gives each chamber 15 days, although in practice the executive often renews it. If the law passes, Corfo must wait for the regulation, due within nine months, before making its first contribution.
What it means for Chilean startups
The Fund of Funds will not hand money directly to entrepreneurs: it will reach them through the venture capital funds that receive contributions. For an early-stage startup, Corfo and Start-Up Chile programs remain the entry point, as explained in our guide to November's Corfo and Start-Up Chile calls. The new mechanism targets the next stage, when a validated company needs rounds of several million dollars.
The specialist site Ecosistema Startup summed up the change this way: the state "stops being only a lender with guarantees and takes a seat at the capital table, under market rules and without choosing startups". The Economy Committee's debate will determine whether the 35% and 30% caps and the initial US$25 million survive.
Frequently asked questions
What is the Fund of Funds bill?
It is the bill (bulletin 18,819-03) that would authorize Corfo to invest as a minority investor in funds of funds and venture capital funds that finance startups. It was filed in the Chamber of Deputies on October 28, 2026.
How much could Corfo invest?
The bill proposes US$25 million in the first year. Corfo could own up to 35% of each fund of funds and up to 30% of each venture capital fund, with a maximum exposure of 35% to any single fund.
Will Corfo choose which startups to back?
No. Investment decisions on each company stay with the funds' private managers, and Corfo must select the funds through public procedures.
When would it start?
It depends on Congress. Once the law is published, the regulation must be issued within nine months, and only then can Corfo make contributions.
