Taiwan’s government took steps last month to transition local high-tech talent into new start-ups, an industry which has been plagued by insufficient funding.
On February 8, a government fund for start-ups increased an investment cap in individual start-ups from 5 million Taiwan dollars (US$171,000) to 10 million Taiwan dollars.
The funding approval process was also simplified. Young firms seeking investment need approval now from half of the review board, down from two-thirds previously according to a Business Next report on Feb.8, 2018.
As a further incentive to startups, the government has cut a repurchase price from 3 times to 1.5 times. The cost for buying out the government’s stake in a startup has effectively been halved.
Funding will be available not only for Taiwanese startups but also for foreign entrepreneurs who establish startups in Taiwan yet who cannot set up branch offices, said Su Lai-shou, deputy executive secretary of National Development Fund.
Creating a new industry
Taiwan is fostering startups, capitalizing on a legacy of high-tech talent, as a new industry. The government set up its fund as part of that effort.
The goal is to create 30,000 start-ups through direct investment according to an August 11,2017 article by Digitimes. It’s a bold move made by the National Development Council who in 2014 allocated 1 billion Taiwan dollars over five years to an “Angel Investor Program” that offers startups funding and mentoring.
As of the end of 2017, a total of 324 new startup teams were approved for such support, according to a according to a Business Next report on February 8. With initial funding nearly depleted, another 1 billion Taiwan dollars were added in March 2017.
But startup founders also found that red tape and regulations prevented them from accessing these funds. Now the council is developing a better, healthier venture capital environment with But startup founders also found that red tape and regulations prevented them from accessing these funds.
Now the council is developing a better, healthier venture capital environment with more concessions and incentives. This direction would create new firms as well as help existing investments.
Will it work?
The new moves will help but may not go far enough to make Taiwan a haven for start-ups, some observers say.
Taiwan’s more flexible attitude regarding government investment will lead to more investment and attract more start-up teams, Yvonne Chen, a partner the venture capital firm WI Harper said in a Business Next report on Feb.8, 2018.
Chen says the increase in funding is less important than changes to the review process.
Others believe more long-term support including education and training may be the key to creating more start-ups in Taiwan.
Weiwei Chiang, chairwoman of Taiwan Techmakers Association, says that more than a capital infusion in needed. Speaking in a Business Next report, she says improving the overall entrepreneurial environment and more educational programs for the next generation of start-ups will be just as important.
〔Original :Meet Startup @TW〕