6th MEXPA- Government Financial Assistance for Malaysian Companies MATRADE Exhibition and Convention Centre 14 April 2014

￭ Incorporated by the Government on 10 March ￭ Under the purview of Ministry of Industry Trade and International (MITI) before it was transferred to Ministry of Science, Technology and Innovation (MOSTI). ￭ The establishment was initiated by National Council for Scientific Research and Development (NCSRD). ￭ Main objective of establishment was to promote technology transfer through the following :- Commercialisation of local research results; and Introduction of strategic technologies to the country.

Funding Technology Incubation Advisory & Nurturing

MVF Young Graduates Symbiosis Grant (CRDF) Grant (CRDF) BSF BGF Others VCs / Loans / Debt Ventures VCs / Loans / Debt Ventures Cubicle Garage Enterprise Entrepreneurship Training Nurturing & Mentoring Value-added Services Business Advisory Incubators SEEDANGEL“SEMI-VC”VC Training & Consultancy Commercialisation Pathway

5 i-CoE FUNDING TECHNOLOGY INCUBATION UNI/RI LINKAGES LOCAL & INTERNATIONAL COLLABORATION NURTURING ENTREPRENEUR DEVELOPMENT MTDC The Complete Ecosystem

FUNDING

 Grants  Promissory Notes  Hybrid – Grant and Equity

Funding Grants

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

Grants Commercialisation of R&D Fund (CRDF)

CRDF 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.

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.

Types of CRDF CRDF 1 CRDF 2 CRDF 3 (a) CRDF 3 (b)

CRDF 1CRDF 2 CRDF 3 (a) CRDF 3 (b) Company Category Spin-offStart-upSMENon-SME Source of Technology Public & Private University (IHL) / Government Research Institute (GRI) IHL / GRI IHL / GRI / In-house Public Sector R&D Quantum of Funding 90% of eligible expenses, capped at RM500k 70% of eligible expenses, capped at RM500k 70% of eligible expenses, capped at RM4.0 mil. 50% of eligible expenses, capped at RM4.0 mil.

i. The company is incorporated in Malaysia; ii. The company must be at least 51% owned by Malaysian; i. The R&D must have been completed successfully and commercial- ready prototype is available; and ii. The proposed project must be tangible in nature. Common Eligibility Criteria

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 Eligible Expenses for CRDF 1 & CRDF 2

Equipment 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 Eligible Expenses for CRDF 3

Grants Technology Acquisition Fund (TAF)

TAF is 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 know-how / IP exploitation / rights / blueprints via one of the following methods:- i. Licensing of technology; and ii. Outright purchase of technology

 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. Objectives

i. Companies incorporated in Malaysia; i. The company must be at least 51% owned by Malaysian; i. The technology to be acquired must be a registered Intellectual Property with proven and significant sales volume; i. The technology provider must not hold any equity in the applicant’s company; i. The proposed project must be tangible in nature; and i. The company must have already been involved in the production, fabrication and manufacturing of relevant products. Eligibility Criteria

Funding types i. Cost of Technology Acquisition; or ii. Cost of Technology Acquisition and acquisition of machine & equipment Cost of Technology Acquisition i.e. for Licensing or Outright Purchase of Technology Acquisition of machine & equipment Engagement of foreign individual within a specific area of expertise on process or product improvement Training 22 Eligible Expenses

i. Cost of Technology Acquisition; or –Quantum funding of up to of 70% or RM2.8million, whichever is lower ii. 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. 23 Funding Structure

Funding Promissory Notes

Business Start-up Fund BSF is for funding of technology-based start-up i.e early growth company involved in technology commercialisation activities and ready to bring their products to markets. BSF provides flexible funding scheme via Convertible Notes (CN) and/or Preference Shares at a maximum of RM5m or 90% of the recognised project cost or whichever is lower. The CN repayment period from the first month of 4th year on monthly basis over 5 year period.

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

i.Start-up business; i.Individual shareholders of at least 70% of the company’s equity; i.Proposed project contains elements of development leading to commercialisation of products, processes or services; i.Persons involved in the project should have suitable qualification or experience; management, marketing and technical; i.Financially capable to fund the portion cost not funded by BSF; i.Project is undertaken in Malaysia; and i.Owner-operated on fulltime basis. Eligibility Criteria

All costs related to the operating expenses and capital expenses except for the purchase of building and land. Eligibile Expenses

Funding Hybrid Fund

Business Growth Fund  Acts as a transition and bridge to VC financing  Financial assistance in two forms:-  Grant of RM1m; and  Equity of RM3m (same structure but more flexible than conventional VC)  Grant is disbursed to finance the tail-end of technology development phase  Equity portion disbursement is only upon fulfilment of the grant milestone and upon the start of the initial phase of business development. Exit plan will be in 3 to 5 years via buy back, trade sale, IPO etc.

 Accelerate the development of local high technology companies by providing business funding to qualified grant graduates.  Provides funding for the “last mile” of the R&D&C value chain.  Ensures that qualified grant recipients are adequately capitalised during their crucial formative years to build a business track record  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 which have received strong market validation for their products/services are further supported to become full- fledged commercial enterprises. Objectives

i. Early stage i. Successful Grant Graduates i. Possesses high technology content i. Exhibits potential for growth. Eligibility Criteria

Technology Incubation

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

i. Create closer links and understanding between universities and industries; and i. Encourage the formation and growth of technology-based businesses. Objectives

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

Advisory & Nurturing

In increasing the success probability of commercialisation activities, advisory and nurturing services are provided for:-  MTDC Fund Recipients  MTDC Tenants  University/Research Institutes  Industry Objectives

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

Technology Ventures CRDF & Technology Advisory Tech