Funding for Commercialisation

Transcription

1 Funding for Commercialisation MCCE 2014 Shah Alam Convention Centre August, 2014

2 Roles:- To identify, finance and develop potential companies in strategic technology areas; To focus on commercialisation of public sector research results; and To identify and transfer emerging and strategic technologies for adoption by industries.

3 Grant Management Soft Loan & Hybrid Fund Programmes Advisory Services Nurturing Services Incubation Management

4 MTDC ECO-SYSTEM FUNDING ENTREPRENEUR DEVELOPMENT/ Symbiosis TECH INCUBATION MTDC i-coe NURTURING UNI/RI LINKAGES LOCAL/ INTERNATIONAL COLLABORATION 4

5 COMMERCIALISATION: BRINGING RESEARCH TO MARKET An invention remains as invention unless commercialized with economic returns. MTDC

6 MTDC s TECHNOLOGY COMMERCIALISATION PATHWAY MVF SEED GOV. GRANT/ ANGEL/EARLY STAGE FUNDING SEMI-VC BSF VC Young Graduates Symbiosis Grant (CRDF & TAF) BGF Others VCs / Loans / Debt Ventures Training & Consultancy Entrepreneurship Training Nurturing & Mentoring Cubicle Value-added Services Garage Business Advisory Incubators Enterprise

7 GRANT/FUND MANAGEMENT Appointed by the Government since 1997 to manage Government (MOSTI) grants under the Technology Development Programme (TDP). The type of grants are : i. Commercialisation of R&D Fund (CRDF) ii. Technology Acquisition Fund (TAF) Since the 10th Malaysian Plan, MOF has entrusted MTDC to manage two new funds for further commercialisation support and business expansion:- i. Business Start-up Fund (BSF)- Convertible loans ii. Business Growth Fund (BGF)- hybrid fund

8 COMMERCIALISATION FUNDING

9 GRANTS Commercialisation of R&D Fund (CRDF) Technology Acquisition Fund (TAF)

10 CRDF Commercialisation of R&D Fund

11 INTRODUCTION CRDF as the name implies, provides funding for commercialisation activities of locally developed technologies/research and development (R&Ds) undertaken by eligible Malaysian-owned companies. The technologies can be those developed by the public/private sectors or they can also be the output of in-house R&D activities by the companies. Under CRDF, commercialisation refers to a new products or production process by which the results of research projects are converted to marketable products and are commercially produced.

12 OBJECTIVES To leverage on Science, Technology and Innovation (STI) for national development; To increase the commercialisation of STI products & processes developed by local U/RI/companies; To increase wealth creation & technology content of SMEs/large corporations via commercialisation of R&D done by local U/RI/companies; and To foster greater collaboration between universities/research institutions and industry.

13 CATEGORIES OF CRDF

14 i. The company is incorporated in Malaysia; ii. iii. iv. The company must be at least 51% owned by Malaysian; The proposed technology to be commercialised must be from one of the Priority Technology Clusters identified by MOSTI, excluding ICT; The R&D must have been completed successfully and commercial-ready prototype is available; v. The proposed project must be tangible in nature or can be incorporated into tangible product; vi. vii. viii. COMMON ELIGIBILITY CRITERIA Significant paid-up capital which commensurate with the total project cost (proof of the availability of the fund to finance the project); License from relevant authorities must be available for the proposed project; and Proposed project is recommended by industrial expert.

15 ADDITIONAL ELIGIBILITY CRITERIA CRDF 1 CRDF 2 CRDF 3 (a) CRDF 3 (b) Company Category Source of Technology Quantum of Funding Spin-off from IHL/GRI Public & Private University (IHL) / Government Research Institute (GRI) 90% of eligible expenses, capped at RM500k Start-up SME Non-SME IHL / GRI 70% of eligible expenses, capped at RM500k IHL / GRI / In- House 70% of eligible expenses, capped at RM4.0 mil. Public Sector R&D 50% of eligible expenses, capped at RM4.0 mil.

16 ELIGIBILE ACTIVITIES FOR CRDF 1 & CRDF 2 Equipments i. Cost of the purchase of equipments for Quality Control and production ii. Cost of maintenance of equipments Technology Cost of technology/ consultation/ training Administration and Overhead i. Cost of allowance for management and technical personnel ii. Cost of rental at technology centre iii. Cost of utilities Services i. Cost of core raw materials ii. Cost of advertisement and promotion iii. Cost of certification and standard iv. Cost of IP registration and protection v. Cost of production out-sourcing

17 Equipment ELIGIBILE ACTIVITIES FOR CRDF 3 Cost of the purchase of equipments for Quality Control and Production Technology Cost of technology/ consultation/ training Advertisement and Promotion Cost of advertisement and promotion Services i. Cost of IP registration and protection ii. Cost of product testing and standards iii. Cost of registration of certification

18 ESSENTIAL INFORMATION FOR APPLICATION Business plan i. Itemised costing ii. Manufacturing and operational plan iii. Marketing plan iv. Financial projection v. Commercialisation plan Secretarial documents Curriculum Vitae of Management and Technical team Audited Account / Management Account Supporting documents Technology Transfer Agreement with U/RI

19 TAF Technology Acquisition Fund

20 INTRODUCTION TAF is established to facilitate eligible Malaysian companies in the acquisition of foreign technologies for immediate incorporation into the company s manufacturing activity. TAF s partial grant enables companies to avoid expensive and often risky technology development stages. The acquisition of technology could be in the form of acquiring knowhow / IP exploitation / rights / blueprints via one of the following methods: i. Licensing of technology; and ii. Outright purchase of technology

21 OBJECTIVES To promote technology upgrading through the introduction & utilisation of technologies in the manufacturing & physical development of existing & new products or processes; To enhance the competitiveness level of Malaysian companies to compete globally; and To increase wealth creation & technology content of Malaysian companies via acquisition of foreign technology.

22 ELIGIBILITY CRITERIA i. Companies incorporated in Malaysia; ii. The company must be at least 51% owned by Malaysian; iii. The technology to be acquired must be a registered Intellectual Property (Patent/Copyright/Industrial Design) with proven and significant sales volume; iv. The proposed technology acquisition must be from one of the Priority Technology Clusters identified by MOSTI; v. The technology provider must not hold any equity in the applicant s company; vi. The proposed project must be tangible in nature or can be incorporated into tangible product; vii. The company must have already been involved in the production, fabrication and manufacturing of relevant products; and viii. Significant paid-up capital which commensurate with the total project cost (proof of the availability of the fund to finance the project.

23 Funding types i. Cost of Technology Acquisition; or ii. Cost of Technology Acquisition + Acquisition of M&E Cost of Technology Acquisition i.e. for Licensing or Outright Purchase of Technology Acquisition of Machine & Equipment (M&E) Engagement of foreign individual within a specific area of expertise on process or product improvement Training ELIGIBILITY ACTIVITIES

24 i. Cost of Technology Acquisition; or ii. FUNDING STRUCTURE Quantum Funding of up to of 70% or RM2.8million, whichever is lower Cost of Technology Acquisition + Acquisition of M&E *Maximum quantum to be approved for IP is capped at RM 2.4mil as 70% and M&E is capped at RM 1.6mil as 50% grant.

25 FUNDING STRUCTURE iii. Additional activity a. Engagement of foreign experts from abroad or sending local technical staff(s) for process or product improvement. Quantum of funding shall cover travelling & lodging of up to RM200,000 per application and period of stay of up to 6 (six) months. b. Eligible activities for cost of pre-production. Quantum of funding shall cover of up to RM250,000 or 70% from the total eligible cost, whichever is lower.

26 ESSENTIAL INFORMATION FOR APPLICATION Business plan i. Itemised costing ii. Manufacturing and operational plan iii. Marketing plan iv. Financial projection v. Commercialisation plan Secretarial documents Curriculum Vitae of Management and Technical team Audited Account / Management Account Supporting documents Technology Transfer Agreement (Licensing / Outright purchase) i. Amount of Licensing iv. Exclusivity ii. Market territory v. Payment schedule iii. Royalty vi. Project milestone iv. Duration

27 Application Returned Technical Committee (TC) will evaluate the proposal & if deemed fit, will recommend the proposal to the Approval Committee for final approval. Final approval by Approval Committee (AC) APPLICATION RECEIVED PRE- ASSESMENT EVALUATION TC AC The application is assessed on eligibility of the company /project. Thorough evaluation to ensure that the proposed project's objectives and other requirements are in line with the Grant's objectives. This includes presentation, discussion on the proposal and visit by Evaluation Officer. The application will be reevaluated. Approved? To issue Letter of Offer Signing of Agreement Client Charter : 45 working days To issue Letter of Rejection

28 The company is to submit a Quarterly progress report. Issue Acknowledgment of Receipt Review the report submitted and highlight the issue(s) to TC /AC if any OPEN A MONITORING FILE PROGRESS REPORT SUBMISSION Progress Report Submissio n Issue a reminder letter Final Presentation for project Closure Present the status/issue(s)of the project TC AC Notificatio n of AC s Decision to Company MONITORING WORKSHOP Presentatio n of the project status Company fails to attend 2 consecutive workshop MO to present TC s recommend ation to AC The company is to present the progress of the project twice a year Acknowledgment of attendance by MO Issues Identified in project implementatio n NOTE: The project duration for TAF and CRDF approval is for 2 years.

29 BUSINESS GROWTH FUND (BGF)

30 Objective Accelerate the development of local high technology companies by providing business funding to qualified grant recipients companies. Provides funding for the last mile of the R&D and commercialisation value chain. Ensures that qualified grant recipients are adequately capitalised during their crucial formative years to build a business track record.

31 Objective (cont.) Build enough commercial value in the company to make companies attractive for follow-on financing by VCs & other financing institutions. To demonstrate that grant recipients, who received strong market validation for their products/services are further supported to become full-fledged commercial enterprises.

32 FUND PROFILE Name Focus Investment Size Per Company Fund Structure Company profile Exits : Business Growth Fund (BGF) : High Technology Grant Recipients : Max. RM4.0 million : Hybrid of Grant & Equity Funding - Redeemable Convertible Preference Shares (RCPS) : Early stage (successful grant recipients) : 3 5 years via buyback, trade sale, IPO, etc.

33 FUND STRUCTURE Partial Grant Up to 25% of total funding (or up to RM1.0 million) No matching required Qualified activities: i. product certification, registration, design & customization ii. iii. entrepreneurship development business & market development Non-qualified activities: i. prototypes ii. iii. technical enhancements activities already funded via grants

34 Equity Participation FUND STRUCTURE Up to RM3.0 million (excluding the grant portion) Subscription instrument RCPS Convertible - Capable of conversion into a class of ordinary share. Exit Redeemable by the Promoters or repurchased by the company out of distributable reserves or the proceeds of a new issue, trade sale, IPO, etc. Internal Rate of Return (IRR) : 15% Board seat

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36 BSF is for seed funding of technologybased start ups. Definition of BSF: a start-up is an early growth company; involves in technology commercialisation activities; and ready to bring their products to markets.

37 A start-up:- New university spin-off companies; Companies started and self-funded by entrepreneurs, but without significant revenue; Companies with high novelty/innovative products and have potential market; and/or New companies set up with collaborative research and established market overseas.

38 Name Focus Funding Per Company Fund Structure Coupon Rate : 3.5% : Business Start-up Fund (BSF) : Technology Based Companies : Maximum of 90% of total project cost or RM5.0 million whichever is lower : Promissory Notes Convertible to Redeemable Convertible Cumulative Preference Shares (RCCPS) Repayment : Maximum of 8 years inclusive of 3 years grace period Repayment shall commence on the first month of the 4 th year on monthly basis over 5 years

39 RIGHT SUPPORT Name BSF CRDF BGF TAF Source of fund Ministry of Finance (MoF) Ministry of Science, Technology and Innovation (MOSTI) Ministry of Finance (MoF) Fund tenure period Budget th MP 10 th MP 10 th MP Ministry of Science, Technology and Innovation (MOSTI) Fund objectives Focus sectors Subscription instrument To support and encourage entrepreneurship and creation of new strategic businesses that are important, and potentially scalable; and the funding of supporting companies within a technology ecosystem. Technology companies. Loan with convertible option to equity. To promote the commercialisation of locally developed technologies (from public and private universities, Government s Research Institutions and companies) undertaken by Malaysian owned company. Locally-developed technology companies, except ICT. Partial, matching grant. To support successful grant recipient companies until they can generate sufficient commercial value to attract VC financing and other forms of financing. Technology companies. Hybrid a combination of grant and equity. To facilitate eligible Malaysian companies in the acquisition of foreign technologies for immediate incorporation into the company's manufacturing activity. TAF's partial grant enables companies to avoid expensive and often risky technology development stages. Technology companies. Partial, matching grant.

40 PRIORITY TECHNOLOGY CLUSTERS UNDER MOSTI INDUSTRIAL TECHNOLOGY Advanced Manufacturing Advanced Material Renewal Energy Nanotechnology Machinery and Equipment Food Processing and Production BIOTECHNOLOGY Agro Biotechnology Healthcare Industrial SEA TO SPACE Meteorology & Geophysics Oceanography Remote Sensing & GIS Communication Space Technology S&T Core Environmental Sciences

41 MTDC s Technology Centres are developed and managed under the Technology Development Clusters (TDCs) programme. Aimed at developing knowledge-based industries with the creation of high-technology companies incubated at the TDCs.

42 The TDC s objectives are:- i. Create closer links and understanding between universities and industries; and ii. Designed to encourage the formation and growth of technology-based businesses.

43 Lettable: 260,942 sqft Lettable: 61,130 sqft Lettable: 57,840 sqft Lettable: 47,500 sqft Lettable: 80,000 sqft

44 Types of Services Business Matching Networking Session Fund Raising Technology Connection Market validation Collaboration Training Soft-landing Entrepreneur development Other services

45 FOR MORE INFORMATION, PLEASE VISIT: CONTACT US: CRDF & TAF - imran@mtdc.com.my/ mohd.asyran@mtdc.com.my BGF - idjarmidzuan@mtdc.com.my BSF - mansor@mtdc.com.my

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