Innovation Fund for TechnologyBased SMEs

1
Innovation Fund for Technology-Based SMEs

• Administration Center of Innovation Fund for
  Technology-based SMEs
• Ministry of Science and Technology, China

2
Management

• Government Decision Supervision ( MOST
  MOF )
• Executive Management (Innofund
  Administration Center )
• Recommending ( Department of ST
  Science Parks )
• Supervising at local levels

3
Where dose innofund fit in?
Funding of RD in China
Torch program Innofund
863, Key tech
863, Key tech
973, Natural science
4
Innofund Missions

• Supporting innovation
• Facilitating transformation of RD results
• Cultivating technology-based SMEs
• Channeling the investment to tech-based SMEs
• Promoting the establishment of an effective
  investment mechanism for high-tech industries

5
Key characteristics of innofund projects

• For SMEs
• Open to any area
• Well focused objectives, novel and unconventional
  which are tangible
• Commercial capitals risk-evasive

6
Modes of operation

• Bottom-up
• Loan Interest Subsidy projects
• Finical grant projects
• Small grant projects

?740M Average Budget/Y
7
Applicant Qualifications

• Involving in high-tech RD, production/services
• RD investment/sales gt 5
• Technological personnel/total employees gt 30
• Various ownership(Chinese equity 50 up)
• Less than 300 employees

8
statistics
(Million RMB)

• Application received 30,825
• Projects Approved 7,962
• Total Funding Allocated 5.19 billion RMB
• Average funding 650,000 RMB

9
statistics
10
Funding Mechanism

• Grant
• Kick-off capital to commercialize research
  achievements or
• partial subsidies for continuing innovation of
  SMEs
• Equal amount of matching capital from
  applicant
• Complementary funding from local government

• Loan Interest Subsidy
• Production expansion of innovation projects
• 50-100 interest of commercial loans ( Posterior)

11
Small Grant

• began in 2003
• To tenant companies in selected incubators
• More administration delegated to local levels
• Complementary funding required
• 40 incubators identified so far
• 807 project awarded so far
• Average funding 247,000 RMB/project.

12
Small grant
13
Achievements

• Innovation Promoted
• 17 projects holds IPR , including1950
  patents,877 software IPR ,69 National Class I new
  drugs
• Transformation Facilitated
• 15.6 from National Key RD Program and 863
  Program
• 32 from other national and local programs
• 17 from industry-university-research institute
  joint development
• 78 at trial development or pilot production
  stage
• Competitive SMEs Fostered
• 14 out of the 38 companies listed on SME Board
  had been funded by Innofund

14
Towards the Next 5 Years2006-2010
15
The story so far

• 1999 Innofund of SMEs launched
• 2003 small-grant for start up companies
• 2004 Roadmap Scheme initiated
• 2005 E-innofund
• 2005 R-innofund
• 2005 M-innofund
• 2006 STTR
• Fund of fund
• Loan Guarantee subsidy

16
Roadmap Scheme

• Roadmap Scheme initiated in 2004
• Aims to create a favorable environment for the
  development of tech-based SMEs via joint efforts
  from the sponsors including
• Innofund Administration Center
• Shenzhen Stock Exchange
• State Development Bank
• Incubator Association
• VC Association

17
System construction

• Major Improvement in 2005
• E-Innofund
• Electronic Application and Administration
• R-Innofund
• Regional/Local Innofund to be promoted
• 131 local Innofunds with a total amount of 1.69
  bn RMB
• 320 Service Agencies around the country
• M-Innofund
• Implementation of Roadmap Scheme
• Promotion of Local Investment to micro-grant
  projects

18
STTR

• Science and Technology Transfer Research ( STTR )
  project initiate in 2006
• Aim to promote the joint innovation between SMEs
  and Institutes, universities
• Aim to Promote the international research
  cooperation
• Finical grant to the Chinese companies in the
  co-development project
• Anvar in France CDTI in Spain
• Open to any country

19
preparing

• Fund of fund
• Promoting the establishment of venture capital
  for innovation in the market law
• Aim to establishment of an effective investment
  mechanism for high-tech industries
• Open to foreign fund in China
• Loan guarantee subisidy
• Sharing the risk of the guarantee companies
• Push the bank loan to the early stage of SMEs

20
On the SMEs Developing Road
Indirectly support
Fund of fund Loan guarantee subsidy
Directly support
Small Grant Project Grant project
Road Map Scheme
STTR project Loan Interest
subsidy
21

Thank You
http// www. innofund.gov.cn