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Friday,
April 18, 2003
Ceiling for seed venture fund increased to RM2mil MALAYSIAN Venture Capital Management Bhd (Mavcap), the forerunner in assisting small players in the IT field, has increased the ceiling for funding available under its Seed Ventures Fund from RM500,000 to RM2mil per start-up, its senior vice-president (direct ventures) Bernard Yaw said. Mavcap had also expanded the scope of the fund from its previous “financing up to beta stage” to encompass “up to commercialisation” of the products, Yaw told StarBiz after the signing ceremony between Mavcap and PC Sentry Sdn Bhd for the formation of Inix Sdn Bhd in Kuala Lumpur yesterday. He said the maximum of RM500,000 per start-up was initially “plenty” as ventures such as software development did not really need that much funding to begin. “But for those in the biotechnology or life sciences industry, it hardly buys two pieces of lab equipment. By increasing the quantum, we can offer financing to companies doing medical devices or biotech even at the seed stage,” Yaw said, adding that the Seed Ventures Fund could now also be used to assist companies that had also done the necessary lab or research and development work and had working prototypes pending commercialisation. Yaw noted, however, that it would be difficult for a start-up to ask for RM2mil. As Mavcap would take only a minority stake in a start-up, the company's valuation has to be at least RM4mil to warrant a funding of RM2mil. He said a venture capitalist (VC) would typically look at the management team of the potential investee, the product and how it could synergise with the VC's existing portfolio of investee companies. Yaw also said that Mavcap in collaboration with Technopreneurs Association of Malaysia (TeAM) aimed to kick of a programme to seed the spirit of entrepreneurship among local students next month. They target to conduct half-day workshops, with about 60 participants each, at 22 universities and colleges.
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