Tech-InvesTR Venture Capital Support Program was established in order to enable venture capital funds to invest in R&D intensive early-stage companies to meet the financial needs of these companies. In order to ensure sustainable functioning of the program, a Cooperation Agreement was signed between TÜBİTAK and the Ministry of Treasury and Finance. With Tech-InvesTR Program, it is aimed at;
- Supporting early stage technology based venture firms through funding them the venture capital they need,
- Creating a high value-added production environment through the commercialization of R&D and innovation products of early stage technology-based enterprises
- Contributing to the creation of venture capital ecosystem through encouraging the establishment of new funds to provide venture capital for early stage technology based firms,
- Enriching financial supports suitable for each stage of the life cycle of companies in order to ensure the stability of the ecosystem.
- Increasing the number of investors in the venture capital ecosystem,
- Creating a sustainable venture capital ecosystem in order to support early stage technology-based initiatives,
- Providing experience and resources in venture capital in Technology Transfer Offices (TTOs), Technology Development Zones (TDZs) and qualified Research Infrastructures (RIs).
A Cooperation Agreement was signed with the Ministry of Treasury and Finance in order to ensure the sustainable operation of the program. The Ministry of Treasury and Finance as well as Technology Transfer Offices (TTO), Technology Development Zones (TDZ), Research Infrastructures (RI) and other third party private investors will be partners to the venture capital funds to be established within the Tech-InvesTR Venture Capital Funding Program. These funds will be managed by the independent fund managers. 50% of the contributions of TTO/TDZ/RIs for VC funds for investments made in early stage technology based Turkey resident companies will be supported by TÜBİTAK in the form of grants. In addition, organizations will be provided with general expense support up to 10% of their contribution. In addition, if requested, a pre-payment will be made to TTOs, TDZs and RIs up to 20% of the total amount committed by them in order to meet their cash requirement.
To ensure the sustainability of the venture capital ecosystem, TÜBİTAK’s grants depend on capital and experience accumulation conditions in TTOs, TDZs and RIs. Through capital accumulation condition, after the fund’s exit from the investments, TÜBİTAK’s share will be used again in the funding of early stage technology-based initiatives by TTO, TDZ, RIs. Within the context of the experience accumulation condition: it is aimed to transfer venture capital management teams’ experience to TTOs, TDZs and RIs. Thus, commercialization perspective is expected to be improve in these institutions with experience and capital.
Within the scope of Tech-InvesTR call; the evaluation processes carried out by TÜBİTAK and the Ministry of Treasury and Finance have been completed, and the Ministry of Treasury and Finance has announced its decision regarding the 5 funds that it deems appropriate to initiate the protocol processes to make commitments. Within this scope, fund participation protocols have been signed between Ministry of Treasury and Finance and Collective Spark, Diffusion Capital Partners (DCP), 500 Startups Istanbul Fund II Venture Capital Fund and Boğaziçi Ventures Venture Capital Investment Fund and these 4 funds have been established. The Ministry of Treasury and Finance also has informed TÜBİTAK that it will sign the protocol with Arz Real Estate and Venture Capital Portfolio Management Company. Moreover, project agreements have been signed between TDZs and TTOs participating in the established Tech-InvesTR funds and TÜBİTAK. In this regard, project agreements have been signed between TÜBİTAK and "METU Technopolis Management Inc.", which is an investor in the Collective Spark fund, " METU Technopolis Management Inc." and " Ege Technopark TDA Manager Inc." which are investors in the Diffusion Capital Partners (DCP) fund, "Tedutech Technology Transfer Consultancy Education and Trade Inc. ", which is an investor in 500 Startups Istanbul Fund II Venture Capital Fund, Ankara University Technopolis Executive Inc. and Çukurova TDA Manager Inc. which are investors in Gedik Portfolio Management Inc. Boğaziçi Ventures Venture Capital Investment Fund.
Grant Amount
The maximum amount of the grant support that can be allocated to a single institution by TÜBİTAK will be 20 Million TL, provided that the commitment of the institution to participate in the Fund is not less than 4 Million TL.
Scope and Rate of Support
50% of the contributions of TTOs, TDZs, and RIs for the early stage technology-based enterprises participating in the funds as investors will be supported by TÜBİTAK as grants. In addition, organizations will be provided with general expense support up to 10% of their contribution.
In addition, if requested, a pre-payment will be made to TTOs, TDZs and RIs up to 20% of the total amount committed by them in order to meet their cash requirement. As guarantee, a letter of guarantee issued by banks and financial institutions should be brought up to 25% more than the prepayment requested.
Required Conditions in Early Stage Technology Based Initiatives
SME-scale companies located in Türkiye that meet both conditions stated below are defined as early stage technology-based enterprises.
a) As of the date when the fund first invested in the venture, companies of SME scale whose maximum 10 calendar years have passed through the establishment date
b) SME scale companies that have received R&D and innovation project support from the public institutions and organizations specified in the Tech-InvesTR call as of the date of the submission of the term report and have successfully completed this project or whose project support continues
TÜBİTAK will support 50% of TTO/TDZ/RI's contributions to VC funds in the form of grants for investments to be made in these companies residing in Türkiye and having the above characteristics.
Legal Structure of Funds
Within the scope of the program the legal structure of the Venture Capital Funds may be any of the following:
- Venture Capital Investment Funds or Venture Capital Investment Company subject to the legislation of the Capital Markets Board of Turkey
- Funds that can invest in ventures resident in Turkey established within the framework of the relevant country legislation (except for countries covered by the black list announced by the Organization for Economic Development and Cooperation (OECD)).
Features of Funds
- Funds will invest in early stage technology-based ventures in Turkey
- University research, spin-off and start-up investments as well as the commercialization of R & D activities and innovation will be financed.
- General Partner (GP) must participate at least 1% of the fund.
- More than 20% of the fund size should not be invested in a single venture company or group company.
- Technology Development Zones (TDZs), Technology Transfer Offices (TTOs) and Research Infrastructures (RIs), the Ministry of Treasury and Finance and third party investors (commercial banks, investment banks, pension funds, angel investors, private investors, private corporations, public institutions and other foreign institutions like EIF, EBRD, IFC, FMO) will participate as limited partners
- Funds will be managed and decided independently
Features of the Early Stage Technology Based Initiatives
SME-scale companies located in Türkiye that meet both conditions stated below are defined as early stage technology-based enterprises.
a) As of the date when the fund first invested in the venture, companies of SME scale whose maximum 10 calendar years have passed through the establishment date
b) SME scale companies that have received R&D and innovation project support from the public institutions and organizations specified in the Tech-InvesTR call as of the date of the submission of the term report and have successfully completed this project or whose project support continues
TÜBİTAK will support 50% of TTO/TDZ/RI's contributions to VC funds in the form of grants for investments to be made in these companies residing in Türkiye and having the above characteristics.
Conditions of Grant
The grant support to be provided by TÜBİTAK has two conditions, namely capital accumulation condition and experience accumulation condition.
- Capital Accumulation Condition: After the fund’s exit from the investments, TUBITAK grants will be accumulated in TTO, TDZ, RIs and will be used in the funding of early stage technology-based initiatives.
- Experience Accumulation Condition: It is aimed to transfer experience from Funds to TTO, TDZ, RIs. At least one representative from TTO, TDZ, RIs will be involved in at least 3 due diligence studies each year, and they will get experience on company valuation, legal transactions, commercialization etc. about fund management. These experiences are expected to be transferred to the ecosystem.
Exit Strategy Report
The amount to be obtained from the investments will be distributed in accordance with the agreement signed between all investors including TTO, TDZ, RIs and the fund manager. The amount corresponding to the TÜBİTAK grant will be kept in the special account.
TTO, TDZ, RIs will submit an Exit Strategy Report containing the future strategy on the corresponding amount of TUBITAK grant from the amount to be obtained from the Fund. Exit Strategy Report must be submitted within six months after the end of the Fund’s investment cycle.
With the approval of the exit strategy report by TUBITAK, the amount in the special account will be suitable for the use of TTO, TDZ, RIs. The project will be accepted as completed and the support process will be terminated.
Having the capital company status, participating in Venture Capital Funds, committed to participate in;
• Technology Transfer Offices (TTO): In order to contribute to university-industry cooperation within the relevant higher education institution and to transform the knowledge produced in the university into economic value; Companies operating under higher education institutions or joint ventures with university-industry cooperation among their activities or companies operating under the Regulation on Technology Transfer Office of Higher Education Institutions.
• Technology Development Zones (TDZ): According to the Law No. 4691, using high / advanced technology or new technologies for companies, a particular university or high technology institute or R&D center or institute by taking advantage of the technology or software to produce / develop a technological invention, a commercial product in or near the same university, high-tech institute or R&D center or institute area where they operate to transform into a method or service and thus contribute to the development of the region; the company with the integration of the academic, economic and social structure, or the capital company, which is responsible for the management and operation of the technopark or technocity with these characteristics.
• Qualified Research Infrastructures: Established under the Law no. 6550 and awarded by the Research Infrastructures Board as a legal entity; Advanced research laboratory where R&D activities are performed and units classified as central research laboratory.
TTO, TDZ and RIs that are planning to participate in the same Fund can apply to TÜBİTAK with the joint project application that is prepared in cooperation.
In the panel evaluations, joint applications submitted by TTO, TDZ and RI (projects) and applicants are evaluated based on the 3 main dimensions provided below:
- Technological and or/ technical competence of the Project
- Quality and appropriateness of the processes developed by TTO, TDZ and RI for the success of the project,
- TTO, TDZ and RI’s criteria for the creation of entrepreneur pool,
- TTO, TDZ and RIs’ processes for the preparation of entrepreneurs to the funds,
- Contributions of TTO, TDZ and RI to the selection and presentation of the ventures,
- Fund selection criteria of TTO, TDZ and RI,
- Collaborations of TTO, TDZ and RI with other universities, technoparks and similar organizations while preparing the entrepreneur pool
- Feasibility of the Project
- Appropriateness of TTO, TDZ and RI to be supported;
i. Organizational management, legal structure and independence of TTO, TDZ and RI,
ii. Sufficiency of experience and competence of TTO, TDZ and RI,
iii. Appropriateness of the organizational structure and personnel of TTO, TDZ and RI,
iv. Intended participation budget of TTO, TDZ and RI to the fund,
v. Appropriateness of a comprehensive business plan of TTO, TDZ and RI including which fund to be participated, return targets, skills planned to be developed, aims regarding the accumulation of resources and experience in the ecosystem, outputs and success criteria
2. Structure of the Fund;
- Focused areas of the Fund,
- Investment strategy of the Fund,
- Commitment magnitude of the Fund,
- Legal structure and independence
- Fund management cost and profit sharing,
- Impact of the Project
1. Organizational capacity development and sustainability;
- Appropriateness of project goals, outputs and success criterion including resource accumulation and experience transfer,
- Total number of ventures to be invested at the idea stage and commercialization stage,
- The development and sustainability of TTO, TDZ and RI’s entrepreneurial and technological commercialization capacity,
- Creation of a sustainable investment mechanism,
- Reporting, controlling, auditing and risk management processes.
Pre-payment will be made to TTOs, TDZs and RIs up to 20% of their total commitment amount to the Fund in order to meet their cash requirement. As guarantee, a letter of guarantee issued by banks and financial institutions should be brought up to 25% more than the prepayment requested.
The TTOs, TDZs and RIs supported within the scope of the program submit their term reports (technical and financial periodical reports) to the TÜBİTAK. Technical reports are reviewed by the observer delegation and the financial reports are certified by Sworn-in Certified Public Accountant and reviewed by financial unit.
After evaluating the term reports, the accepted expenditure amounts related to the expenses to be supported by TÜBİTAK are determined. Payments are made to TTOs, TDZs and RIs after taking into account the prepayment amounts.
For applications, a call must be opened by TÜBİTAK. Application start and due dates are specified in the call document.
Yes, an organization can receive support from TÜBİTAK by participating in more than one fund. However, TTO, TDZ and RI’s commitment to participate in a single fund cannot be less than 4 Million TL.
No, it cannot be supported. In order to support the contributions to be paid by TTO, TDZ and RIs by TÜBİTAK, initiatives to be invested by the funds shall have all of the features of the early stage technology-based venture company specified in the Code of Practice as of the date of investment. Contribution of TTO, TDZ and RIs for investments to be made for companies that do not have stated features are not supported by TÜBİTAK. However, in case that the venture company meets the conditions stated in the Code of Practice after the date of the investment, the new capital contribution shares made following the date of meeting this condition can be supported by TÜBİTAK.
The maximum amount of the grant support that can be allocated to a single institution by TÜBİTAK will be 20 Million TL, provided that the commitment of the institution to participate in the Fund is not less than 4 Million TL. Even if a TTO, TDZ and RI’s share in total fund exceeds 40 Million TL, the grant request cannot exceed 20 Million TL.
Yes, within the scope of the project, TÜBİTAK can make pre-payments to the organizations against guarantee. Pre-payments to be made within the scope of each project cannot exceed 20% of the total amount committed by TTO, TDZ and RI to the fund.
In pre-payment transactions, 25% more than the requested pre-payment is taken as guarantee. All expenses related to the guarantee belong to the organization requesting pre-payment. Only letters of guarantee provided by banks and financial institutions can be provided as guarantee.
Yes, in case that more than one TTO, TDZ and RI participate in a fund, organizations can apply for joint projects. The joint project application is submitted in the form of a single project application. Activities and budgets of TTO, TDZ and RI within the project should be prepared separately for each organization. All partners must meet the application requirements stated in the Code of Practice.
Elif KOŞOK
Head of Venture Capital Funding Group
Phone: 0-312-298 94 79
E-mail: elif.kosok@tubitak.gov.tr
Sinan ÖZER
Phone: 0-312-298 94 80
E-mail: ozer.sinan@tubitak.gov.tr
Yasin ERGÜL
Phone: 0-312-298 96 82
E-mail: yasin.ergul@tubitak.gov.tr
Dr. Cansu DURUKAN
Phone: 0-312-298 95 80
E-mail: cansu.durukan@tubitak.gov.tr
Pınar NUR
Phone: 0-312-298 95 86
E-mail: pinar.nur@tubitak.gov.tr