HKSTP
TecONE Briefing Session named “Innovation and Technology Venture Fund (ITVF)”
was organized by Hong Kong Science & Technology Parks Corporation (HKSTP) under
TecONE platfrom on 3rd Oct 2017.
To stimulate private investment in local innovation and technology
(I&T) start-ups, the HKSAR Government has set aside HK$2 billion and
launched the ITVF. The Commissioner for Innovation
and Technology – Ms. Annie Choi hosted a briefing session and shared the
details of ITVF, including the eligibilities, selection criteria, application
procedures and so on.
Ms.
Annie Choi said Innovation and Technology Venture Fund (ITVF) aimed to
encourage more VCs to invest in Hong Kong startups and increase deal flow, as
well as, to fill the valley of death (gap between idea and commercialization).
The scheme overview was stated included matching ratio (1:2), Maximun
contribution per deal is HK$30M and per company was HK$50M.
She
said the eligible VCs should be I&T investment focus and its investment
coverage included Hong Kong. Moreover,
VCs minimum remaining committed capital of HK$120m (it is very little based on
VC definition). However, the remaining
fund life is at least five years. Then
she mentioned four selection criteria in the following diagram. (Where
distributions were background & experience (15%); Track record (25%);
Strategic value & support (30%) and Resource contribution to HK ecosystem
(30%).
Ms.
Annie Choi added the four principles.
- ITVF
Corporation (ITVFC) as a passive investor; VC partners will make the decisions
and do all due diligence;
- VC
will refer deals to ITVFC;
- ITVFC
will have the right of first refusal; and
- ITVFC
will decline an investment if it is in conflict with Government policies, or
has the potential to bring disrepute.
The
due diligent for potential investee companies were responsibilities of VC
partners and they also needed to identify the exit opportunities. The duration of partnership was at least 5
years and upto 12 years which was based on the Master Agreement. There were no
management fees to VC partners but ITVFC would bear taxes, stamp duties &
registration fees related to its’ shares.
The incentives for VC were that sharing of investment risk and
attractive carried interest at 35%.
Finally,
she reminded all that the application deadline would be on 15 January 2018 and
the result would be known by the end of April 2018. Then Q&A session started. During the answering, she mentioned the new
innovation business model would be also considered as Innovation & Technology
business. Moreover, the ITVF had only
ceiling and no definition of series A or B, etc.
Reference:
HKSTP
- http://www.hkstp.org
TecONE
- http://tecone.hkstp.org/t1_web/
ITVF
- https://www.itf.gov.hk/l-eng/ITVF.asp
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