UNIT 9: FINANCING TECHNOLOGY VENTURE

GROUP MEMBERS:

1) JAZLEEN ADIBAH 2) KHAIRUL AZWAN 3) MOHAMAD FAHMI 4) MOHAMAD HISYAMUDIN 5) MOHD RAZIS 6) MOHD ZUHAIRI

External investors

Own resources

Government financing schemes

RESOURCES

FINANCING NEED

TO DETERMINE START UP COST One-time start-up costs Initial working capital

SHORTFALLS OF REVENUES OVER EXPENSES To pay the suppliers and fixed costs of running the business

FIXED ASSETS REPLACEMENT To reinvest in new fixed assets

GROWTH Expansion of current operations

SOURCE AND STAGES FINANCING

PRE R&D AND R&D

Pre seed financing

PRECOMMERCIA LIZATION
Seed financing

COMMERCIA LIZATION
First round financing

GROWTH AND EXPANSION

Second round and third round financing

Self, relatives and friends Angels financing Government Financing Schemes Venture capitals Bank &DFIs

MAVCAP

SME Corp GOVERNMENTS FINANCIAL ASSISTANCE

MDeC

MOSTI

MTDC

COMMITED PURELY TO TECHNOLOGY SECTOR

INVEST IN A MIX OF LOCAL AND OVERSEAS BUSINESSES

DEFINITION

UNIVERSITY CRADLE INVESTMENT PROGRAM (U-ICP)

MAVCAP
TYPES OF PROGRAMME
TYPES OF FUNDING OFFERED
SEED VENTURE FUND Start-up: RM50k to 500k Other than start-up: RM500k to RM 10million

CRADLE INVESTMENT PROGRAM (ICP)

DIRECT VENTURE FUND

MULTIMEDIA DEVELOPMENT CORPORATION(MDEC)

THE MSC MALAYSIA R&D GRANT SCHEMES
(MGS)
Target to local entrepreneurs whose idea has been developed into a business plan and require further development

TECHNOPRENEUR PRE-SEED FUND PROGRAM

-RM120million has been allocated -To support R&D initiatives within the MSC

- Provide a grant up to 50% of the approved total project cost - RM1.2million whichever is lower

Size of funding: Up to maximum of RM150k for development up to 12 months

The amount of grant approve will be determined by the merits of each case

PROJECT PROPOSALS ELIGIBLE

Creative media and content development Software development Internet-based businesses Support services Shared services outsourcing Hardware design

MALAYSIAN TECHNOLOGY DEVELOPMENT CORPORATION (MTDC)

VENTURE CAPITAL FUNDS
Non ICT sector (life sciences sector) Strategic technologies

Invests in early, growth and late-stage TBB Equity stake in any investment limited to around 30% Limited up to 5 years

High investment return Clear and defined business vision

INVESTMENT CRITERIA

MTDC

TYPES OF FINANCIAL ASSISTANCE

Credible management team

SPECIAL-PURPOSE GOVERNMENT GRANTS Technology Acquisition Fund(TAF) Commercialization of Research & Development Fund (CRDF) Technology Acquisition Fund for Women (TAF-W)

MINISTRY OF SCIENCE, TECHNOLOGY AND INNOVATION (MOSTI)

Fund offered
InnoFund
To develop new or improve existing product with elements of innovation commercialization The quantum and duration of funding Individual RM20k (12 months) Sole-proprietor RM20k (12 months) Micro enterprise RM50k (12 months) Small enterprise RM250k (18 months)

Enteprise Innovation Fund (EIF)

Technology clustered: Agriculture Information and communication technology (ICT) Biotechnology Industry Criteria for approval: Innovativeness of project proposal Appropriateness of milestones Appropriateness of methodology Commercialization prospects Financial capability

Technofund
Type A Pre commercialization Funding up to a maximum of the total project cost or RM5million whichever is lower Type B IP Acquisition (Laboratory scale) Funding up to a maximum of 100% of the total acquisition cost or RM2million whichever is lower

Content fund
To develop content mainly for entertainment, training and learning,culture and heritage and information based Technology required: Animation Games Simulation/virtual reality Portal/web based Allocation Team up to RM90k Micro enterprise up to RM500k SME up to RM6 000 000

SME CORPORATION MALAYSIA (SME CORP)

GRANT OFFERED
MATCHING GRANT FOR BUSINESS START-UPS 50% of approved project cost borne by government, remainder by applicant In manufacturing sector, assistance is given up to 80% of approved cost Maximum allocated per applications is RM 40,000 Sector coverage include process development, product and process design Eligible Expenses including preparation of business plan, related feasibility studies, development of prototype and etc.
MATCHING GRANT FOR PRODUCT AND PROCESS IMPROVEMENT Provide matching grant for improvement and upgrading of existing product, design and process upgrading 50% of approved project cost borne by government, remainder by applicant Maximum grant allocated per application is RM 500,000 Sector coverage include product/process development, software development, product and process design Eligible Expenses including technology feasibility studies, product testing, product registration, marking and labeling and etc.

DEBT VS EQUITY

DEBT FINANCE
A payback of funds + interest
A burden of repayment and interest on the entrepreneurs

EQUITY FINANCE
The sales of some of the ownership in the venture Forces the entrepreneur to relinquish some degree of control