Funding Opportunities for Developers

Muhammed Sayed

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TIA Act No. 26 of 2008

“…stimulating and intensifying technological innovation in

order to improve economic growth and the quality of life of al l

South Africans by supporting the development and exploitat ion

of technological innovations.”

“…the application in practice of creative new ideas, which in cludes

inventions, discoveries and processes by which new product s and

services enter the market and the creation of new businesses .”

TechnologyIdeas

TechnologyInnovation

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The Innovation Chasm…TIA’s Strategic Challenge

Source 1- http://comps.fotosearch.com/comp/FSA/FSA479 /school-books Source 2- http://images.veer.com/IMG/PIM G/MPP/1664420_P.jpg

Copyright Reserved - Doug Sanyahumbi 2011

Industry

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Basic Research Applied Research Tech Development Commercialisation

IP V

alue

Lowered Risk/More certain Return

High Risk/Uncertain Return

Partnerships(e.g. IDC, NEF)

Partnerships(e.g. NRF)

Focus of TIA financial and non-financial offerings: Across the innovation chasm, o perating with the required flexibility along the in novation value

chain through mobilising and leveraging national, r egional and international partnerships

TIA’s Positioning Along The Innovation Value Chain

Proposed TIA Support

S. Duma 5

TIA Sectors

Agro

Health

Industrial Biotech

Advanced Manufacturing

Energy

ICT

Mining

Biotechnology Sectors Industrial Sectors

ICT SECTOR STRATEGIC FOCUS AREAS

(under development)

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TIA’s Support Mechanisms

Financial Support:

Industry Matching Fund

Start-up/Equity Fund

Technology Development Fund

Youth Development Fund

Idea Development Fund

Non-financial Support:

Business Advisory & Support Services

Human Capital Development Support

Engineering Services

Research Support

Funding

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Industry Matching Fund

� The aim of the fund is to partner with economically active companies

� Open to Entrepreneurs & SMME’s with incentives (mor e generous terms)

to partner with Science Councils, Higher Education Institutions

� Funding is typically provided as matched funding fr om any source

� Financial instruments being Debt (prime), Preferenc e Shares or Royalty

(Any of these may be convertible to shares)

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Startup/Equity Fund

� The purpose of the fund is to invest in entrepreneu rs or fledgling start-up (<3

years, not yet profitable) who may partner with ot hers

� No matching funding requirement but some prior cont ribution and/or sweat

equity required

� Financial instruments could be primarily Equity (26 % - 49%) in combination

with Debt (prime) and/or Preference shares. Conver tible Royalty in rare cases.

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Idea Development Fund

� The purpose of this fund is to assist existing or potential in dividualentrepreneurs and SMEs in the development of ideas to enable furtherinvestment by TIA or others.

� The Fund shall be managed to:• fund entrepreneurs with ideas or prototypes that require as sistancewith the development of a fundable proposals/business plan s forTechnology Innovation; and• to assist entrepreneurs and SMEs in financing intellectual propertyregistration and maintenance costs.

� Some sweat equity required & Financial instruments Royalty (may beconvertible)

� The Fund will be a limited resource made available to the best SouthAfrican ideas

� TIA may elect to provide the funding in the form of a direct payment to an arm’s length service provider where appropriate

Youth Technology Innovation Fund

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YTIF Overview

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YTIF Offerings

SABS services for product certification• R100 000

Business coaching• 160 hours

Use of TIA Technology Stations/Platforms• R250 000

Intellectual Property protection • R150 000

Stipend for Inventors • R60 000 per person per annum• 2 years • 4 people

Incubation services at recognised TIA partner Organisations• 2 years

YTIF offers vouchers for following services:

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Assessment Criteria

Technology

Innovativeness

Solution to

specific

national or

provincial

problem

Socio-

economic

impact

Team

competency

and ability

Technology

Soundness

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YTIF Administration

Special Projects Unit

ytif.fund@tia.org.za

012 472 2743 or 2904

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Funding Instruments

HEIs / Science Councils/

Large Companies

Fledgling Companies

Entrepreneurs

SMEs

Development Commercialization

Idea

Dev

elop

-m

entF

und

Industry Matching Fund

Startup/EquityFund

Technology DevelopmentFund

TIA FUNDS – FINANCIAL PRODUCTS

Youth Development Fund

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TIA Investment Criteria• Strong alignment with the TIA mandate, Corporate and Sector Strategic objectives

• Stage of technology development is beyond basic research (post-proof of concept)

• Attractive commercial opportunity (market & industry)

• Sustainable competitive advantage e.g. IP protection

• Technology-based product/service/process offering must have

o strong potential for market capitalisation

o strong value proposition – solution someone is prepared to pay for

• Business proof of concept i.e. viable and robust business case

• Feasible business model i.e. all components in place to deliver on the value proposition

• Strong Team: relevant business & technical expertise, experience, industry connectedness

• Potential for high socio-economic impact – addresses national imperatives e.g. job creation

• Strong potential to enhance industry competitiveness

• Presence of an industry commercialisation partner where relevant

• Co-Investment opportunity presented to allow risk-sharing

• Short to medium time to market (~3 yrs)

S. Duma 19

Private Sector Seed funding for ICT

http://www.angelhub.co.za/ R1m to R10m

http://www.google.co.za/umbono/ $25k to $50k

http://invenfin.com/ R2m to R20m

http://www.knifecap.com/

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QUESTIONS ?

www.tia.org.za

Contact: Muhammed.Sayed@tia.org.za

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THANK YOU