Discussion Meeting: TAPI as a possible Venture Capitalist

AGENDA TAPI’s current Mandate Venture Financing Program Concept of Venture Capitalist (VC) Comparative Discussion (VFP vis-a-vis VC)

TAPI’s Mandate Created by virtue of Executive Order 128 on January 30, 1987 Serves as implementing arm of the Department of Science and Technology (DOST) in promoting the commercialization of technologies and marketing the services of the other operating units of the Department Provides grants and/or venture financing assistance for new and emerging projects Administer the Invention Development Assistance Fund (IDAF) and the Inventors Guarantee Fund (IGF) for assisting inventors for invention-related activities and commercialization of inventions Assist technology generators, inventors, and researchers avail of the laboratories and other facilities of the Research and Development Institutes including DOST Regional Offices and other government agencies, offices and instrumentalities Accredit and recognize inventors’ associations throughout their activities.

Venture Financing Program Aims to Accelerate the commercialization of new and emerging technologies Provides funding support to start-up and expansion projects DESCRIPTION Created to facilitate the institute’s mandate of providing grants/venture financing to new/or emerging projects BACKGROUND Improve Viability of start-up projects Enhance competitiveness of start-up/expansion projects OBJECTIVES

Venture Financing Program Financial Assistance to cover cost of acquisition/fabrication of relevant production equipment Cost of Raw Materials for unserved POs (PO Financing Facility) COVERAGE Maximum of 2 Million pesos per project COST MSMEs (Start-ups of Expansions) Sole, joint or corporations Accredited Cooperatives QUALIFIED PROPONENTS

CONCEPT OF VENTURE CAPITAL Financing/ Investment high and new technology based enterprises Unsecured Risk Financing Investors join as co-partners Can provide support at any stage of business/production cycle Seed financing and development financing

FEATURES OF VENTURE CAPITAL HIGH RISK HIGH TECH Equity Participation and Capital Gains (direct purchase of shares Participation in Management Illiquid Investment (no repayment)

Comparative Discussion FEATURES VENTURE FINANCING VENTURE CAPITAL Nature of Assistance Financing Assistance for equipment acquisition - Financing Assistance for Capital Growth/ Gains Nature of Company to Support Start-ups and Expansion Projects - Start-ups Repayment With Repayment scheme (0% Interest) - No repayment (concept of equity gains based on shares) Management Involvement No involvement - Involvement in Management. One seat on the company’s board of investor and directors Involvement in Stages of Development Early Stage for Start-ups Development Stage for Expansion Projects - Early Stage till development Stage for Start-ups GAINS No Gains (Investment is repaid as released0 - Capital Gains (Gains as the company develops)

Points for Consideration TAPI is currently implementing the Venture Financing Program (VFP) following the Institute’s Mandate The VFP is only limited to assistance for technology acquisition whereas VC provides assistance to a firm for capital growth and development. The VFP’s assistance is limited to 2M, being a VC requires a large amount of investment funds to fully support a start-up company