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
Early stage technology-based venture companies on the SME scale to be invested under the program must have the following two features.
a) SME scale companies which have received support from the public institutions and organizations for R&D and innovation projects in the last 5 calendar years as of the date the fund first invested and that have successfully completed or continued this project,
b) As of the date when the fund first invested in the venture, companies of SME scale whose maximum 7 calendar years have passed through the establishment date.
50% of the contributions of TTO/TDZ/RIs for VC funds for investments made in these Turkey resident companies will be supported by TÜBİTAK in the form of grants.
Conditions of Grant
The grant support to be provided by TÜBİTAK has two conditions, namely capital accumulation condition and experience accumulation condition.
1. 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.
2. 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.