Questions You May Have
Cradle Investment Programme 300 (CIP300)
Cradle Investment Programme 300 (CIP300) is a new conditional grant product by Cradle which was launch in May 2017 following from our announcement in December 2016 to revamp our long standing CIP Products, CIP Catalyst and CIP500 to better suit Malaysia’s thriving start-up eco-system.
The CIP300 is a pre-seed programme that provides a conditional grant and value added assistance up to RM300 000 for entrepreneurs to kick-start innovative technology based start-ups to develop and commercialise their products or services.
The purpose of this programme is to assist early stage entrepreneurs to both develop and commercialise their products. CIP300 helps address the funding gap that exists for early stage businesses at the ideation stage and prototyping stages as well as early commercialisation of products.
No. As announced last December 2016, both of these products will no longer available with immediate effect starting end of year 2016. CIP Catalyst and CIP500 has been around for years and it is time for Cradle to revamp its conditional grant product to better suit Malaysia’s thriving start-up eco-system by introducing CIP300.
CIP300 is the combination of CIP Catalyst and CIP500 that offers financial assistance of up to RM300 000. Under CIP300, early stage entrepreneurs can both develop and commercialise their products.
A key feature of the CIP300 is a range of value added assistance that each CIP300 recipient will benefit from. These services are designed to help nurture, develop and prepare them for the challenges of building a tech start-up from the ground up. These value added support includes:
- An enhanced Coaching & Mentoring Programme throughout the funding period
- Opportunity to be matched with potential investors
- Match making with Cradle’s partners
- Internal training programme to support creation, innovation and commercialisation
- Participation in business and networking events under Cradle
- Media and public relation support
This product is eligible for application by individual or locally incorporated companies operating less than three (3) years. Eligibility criteria are as follows:
- Primary applicant is a Malaysian aged 18 years and above
- Primary applicant is a permanent resident in Malaysia
- A team comprises of ONLY Two (2) Members
- A Sdn Bhd incorporated less than three (3) years (if applicable)
- At least 51% of the company’s equity is held by Malaysian
- For company, accumulated revenue is not more than RM3 million
From pitching stage to approval stage will take around Two (2) to Three (3) months. As for Approval stage to completion stage, it will take approximately up to Eighteen (18) months.
No. All applicant can only be in for their pitching session and NOT other company’s session as all pitching session will be done as ‘Closed Session’.
Start-ups will get reimbursed.
Funds will be disbursed through one-time advance to kick-start the fund, and the following/rest will be on reimbursement basis.
Yes. The propriety of the IP MUST belongs to the recipient or company.
Yes, only if you are applying as a group of individuals.
Not necessarily, but it will strengthen your application.
Not necessarily, but it will strengthen your application.
Yes, if the applicant is able to show the uniqueness of their app and how is it better than its current competitors.
The competition of getting funded under Cradle Investment Programme has increasingly becoming competitive over the years. Innovation are evolving on a daily basis and we are looking for the best amongst the greatest. Highlighting important points as follows may help you in your application:
- Clear explanation of the pain/problem/issue that you would like to address/solve
- Clear explanation about the technology innovation of your product/service
- Clear explanation on how your creation in technology through innovation can address/solve the issue that you would like to resolve
- Clear and updated analysis in commercialisation aspect of your product/service which includes competitor analysis
- The diversity in your team. It is not a must but having a diversity in team’s expertise such as tech, finance, etc. will show the strength in your team
You need to complete and submit the online pitch application form at www.cradle.com.my and pitch slides which conforms to our guidelines stated in the online form.
No. Your concept/idea will be treated as private and confidential.
Yes, you can still apply for CIP300.
The fund must be used solely for the purpose of the development and commercialisation of the product/service, and the recipient is required to meet all deliverables within the stipulated timeline.
Technology-based industries which include ICT, Non ICT and others.
Yes, startups need to pay back plus administration fees.
The CIP300 is a conditional grant offered by Cradle. The grant funding is an incentive from the Government to help assist local entrepreneurs in starting up their technology based innovation journey.
Recipient under the CIP300 are obligated to pay back the grant money based on the terms and conditions apply upon signing the agreement with Cradle.
Please go to www.cradle.com.my and click the ‘Apply’ button for CIP300.
You will be directed to the page below. For first time user, please sign up to create your account before applying for the programme.
If you still have questions regarding CIP300, please contact the team directly at firstname.lastname@example.org
Direct Equity Investment 800 (DEQ800)
DEQ800 is a new investment product by Cradle following its investment portfolio expansion effective February 2017. DEQ800 is the abbreviation for Direct Equity 800, a form of equity investment of up to RM800 000 for local tech start-ups.
DEQ800 comes as the next phase of product offering after Cradle’s co-investment programme that was first introduced in 2014. The launch marks Cradle’s new direction in supporting tech start-ups, particularly those at early stage.
Start-ups that can apply for DEQ800 must be Malaysian incorporated company operating less than five (5) years; Ownership of at least 51% by Malaysian; Revenue of not more than RM5 million; and Own or at least hold all IP rights, titles and interest to the prototype, products and/or services.
Focused investment sectors under this initiative include areas within the National Key Economic Areas (NKEA) such as Financial Services, Tourism; Business Service; Electrical & Electronics; Wholesale and Retail; Education; Healthcare; Communication Content and Infrastructure; Oil; Gas and Energy; and Agriculture.
In return of investment, Cradle will take certain percentage of the company’s equity.
Deliverables for all investee companies under Cradle will be determine during meeting and based on agreement from both sides before proceeding to the next stage of investment.
No. Cradle is not obligated to do any marketing for the investee company.
Yes. However, this will still be subject for negotiations between Cradle and investee company.
Cradle will be offering a range of value added support that each of investee company will benefit from. These services are designed to help nurture, develop, and prepare them for the challenges of building a great tech start-up. These value added support includes:
- An enhanced Coaching & Mentoring Programme
- Opportunity to be matched with potential investors
- Match making with Cradle’s partners
- Internal training programme to support Creation, Innovation & Commercialisation
- Participation in Business & Networking events under Cradle
- Media and Public support among many others
DEQ800 is a new investment product which was launched in February 2017, is an investment portfolio expansion under Cradle. DEQ800 is direct investment whereby Cradle can invest on our own, with or without any partner and Cradle will lead the deal from sourcing to due diligence.
Co-Investment, an initiative under Cradle which was first introduced in 2014. Under co-investment, Cradle will invest with its co-investment partners. Unlike DEQ800, Cradle’s partners will lead the deal from sourcing to due diligence.
The Co-Investment partnership under Cradle is done in preparation for the gradual reduction of government grants towards supporting early stage start-ups. Co-investing exercise provides Malaysian Technopreneurs stronger support they need to take their ventures to global markets without having to leave Malaysia in search for investors. The initiative gives them the opportunity to use Malaysia as their home-based to work on their ideas.
DEQ800 or Direct Equity 800 was launched on 27 February 2017 and is managed by the investment team from Cradle. This investment is a pre-seed and seed stage with ticket size maximum at RM800 000 for local tech start-ups.
Cradle Seed Ventures (CSV) is Cradle’s venture capital arm that was launched on 4 June 2015 which targets to invest the equivalent of between RM1 Million and RM3 Million into promising and scalable Malaysian technology start-ups at the Pre-Series A, Series A and Growth stages for a minority equity stake.
Investee company needs to submit monthly management account to Cradle.
Cradle reserved the right to appoint a director. Cradle will nominate an Executive Committee for the board from Cradle’s Senior Management Team. However, Cradle will not get involved in day to day operations.
Cradle is looking to have investment tenure of between 5 to 7 years and will find suitable exit after reaching the targeted timeline. However, this will depend on case to case basis.
No. This is subject to the number of votes received during board meeting as we believe that every board member have the rights in voting.
Cradle is looking around 5 to 7 years.
If you still have questions regarding DEQ800, please contact the team directly at email@example.com
Angel Tax Incentive (ATIO)
Angel Tax Incentive is a new initiative approved by the Government to encourage more early stage investments by the private sector. This incentive hopes to reduce the risks usually associated with early stage investments by giving back in the form of tax exemption to the investors.
Angel Tax Incentive is administered by the Angel Tax Incentive Office (ATIO) a unit under Cradle Fund Sdn Bhd (Cradle) under the auspices of the Ministry of Finance (MoF).
The Angel Tax Incentive is designed to encourage more angel investments from the private sector into early stage companies in technology space. As such, ATIO’s role is to ensure that start-ups seeking investments from accredited angel investors are eligible and that investments made into these companies are genuine.
The investee companies will first have to apply with ATIO to receive qualification for investment under Angel Tax Incentive where they can then obtain a letter to present it to the accredited angel investors. ATIO will then submit all investment related documentations to MoF for approval & endorsement after the investment takes place.
The Malaysian Business Angel Network (MBAN) will accredit angel investors in Malaysia.
Malaysian Business Angel Network or better known as MBAN is a body that functions like a trade organisation, driving regional and international linkages between angel investors. MBAN is responsible for the accreditation of individual angel investors and angel investor clubs, creating awareness and training for investors, and monitoring angel investment statistics in Malaysia.
Cradle on the other hand, serves as the interim secretariat for MBAN. The network is managed by a pro-tem committee comprising of various government agencies and angel groups including Angelsden, Virtuous Investment Circle (ViC), Pikom Angels Chapter and AIPO Business Angels Club.
ATIO works closely with MBAN. MBAN, representing the private sector, will accredit the angel investors, whilst ATIO, representing the public sector, will provide qualification to the start-ups and validate the investments into these companies.
Angel Tax Incentive’s investment focus is in diverse areas of high growth technology industries with innovation including the following:
- Advanced electronics and information technology;
- Equipment/instrumentation, automation and flexible manufacturing systems;
- Electro-optics, non-linear optics and optoelectronics;
- Advanced materials;
- Value-add services; and
- Emerging technologies
ABOUT INVESTEE COMPANY
Investee Company refers to technology based start-up who is looking for investment/funding from the private sector.
- Minimum 51% Malaysian owned;
- Must be a Sdn Bhd company and incorporated in Malaysia;
- Company’s core business must be in qualifying activities as approved by the MoF;
- Cumulative revenue less than RM5 million and has been in operation for 3 years or less (based on the latest financial year result upon application); and
- The company must not be wind-up and/or in liquidation.
The qualifying period to apply as an investee company starts from 1 January, 2013 until further notice.
The validity period is two (2) years only.
The ideal situation would be that the investee company must already be in talks/discussion with the potential investors before applying to Cradle. The tax incentive would be an enticing motivation for the angel investors to make an investment into the investee company.
ABOUT ANGEL INVESTOR
- Must be a tax resident in Malaysia;
- Either considered a High Net Worth Individual or High Income Earner
- High Net Worth Individual – Total wealth or net personal assets of RM3 million and above or its equivalent in foreign currencies; OR
- High Income Earner – The gross annual income of not less than RM180,000.00 in the preceding twelve (12) months; or jointly with his or her spouse, with gross annual income of RM250,000.00 in the preceding twelve (12) months.
To apply as an angel investor, you will need to fill in the accreditation form provided by MBAN (for the time being, Cradle will act as the interim secretariat for MBAN until further notice).
Yes, you can invest in more than one company per year but the maximum investment approvals per annum is five (5) only. The minimum amount per investment is RM5,000.00 and up to a maximum of RM500,000 investment per annum in total.
The investors must hold shares in the invested company for a period of two years prior to claiming the exemption. If the shares are disposed before the two years, the investment will be considered void for the tax incentive purposes.
The investment is qualified for tax relief on the third (3rd) year of his/her shareholding. For example, if an investment is made in the year 2013, the investor will be able to claim for tax exemption when he or she files for their tax returns in the year 2015.
The amount qualified for deduction is equivalent to the value of the investment made to the investee company. The aggregate income should comprise from all sources including business income for the basis period of year assessment.
No. All investments must be made in cash.
Angel investor’s accreditation period is valid for two (2) years. However, it can be renewed if required.
In order for the investors to qualify for the tax relief, he/she must obtained accreditation from MBAN before making any sort of investments to the investee companies. If the investors did not obtain the accreditation from MBAN, the investors will not enjoy the tax exemption for any investment that he/she has made.
The investment eligibility criteria consist of the following:
- Investment must be made into a qualified investee companies/start-ups;
- Must not be an immediate family member i.e. spouses, children, parent and grandparent;
- Shall be for the sole purpose of financing the activities as approved by MoF;
- Must hold the investment for a period of two (2) years prior to claiming the exemption;
- Is not disposed of within two (2) years from the date the investment is made;
- The angel investor must not hold more than thirty (30) percent of the total equity of the investee company;
- Minimum amount of RM5,000.00 per investment and up to a maximum of RM5000,000.00 investment per annum in total;
- Shall be a maximum of five (5) investment approvals per annum;
- Investments made are to be paid in cash and in full and not in-kind;
- New shares issued and reflected in the Shareholders’ Agreement;
- The shares issued to the angel investors must be in the form of ordinary shares only. If preference shares are issued, it cannot be converted into a loan or call option, but can only be converted into ordinary shares.
The angel tax incentive is open for qualifying investments made from 1 January, 2013 to 31 December, 2017. The qualified investment must be made by qualified investors into a qualified investee companies. The investment made must be approved and endorsed by the Ministry of Finance.
The risks are to be borne by both the investors and the investee company. However, the tax relief is still applicable for the investors on the 3rd year of his/her shareholding.
The maximum share percentage in every investment is thirty (30) percent of the total equity of the investee company.
The minimum investment amount is RM5,000.00 each up to a maximum of RM500,000.00 per annum in total.
Yes, the investee company must have business activities in Malaysia for at least two (2) years after the investment is made.
The Coach & Grow Programme (CGP)
The CGP is a public-private partnership between Cradle Fund and Proficeo where Cradle are the Programme Owners and administrators and Proficeo are the architects and designers who conduct programme implementation.
It is a market driven programme intended to bring together key players in the entrepreneurial ecosystem to nurture existing entrepreneurs to grow their businesses to greater heights via coaching. It is designed to provide entrepreneurs with the tools and ‘show-how’ to implement strategies and plans during commercialisation and growth stages.
For Season 1, 2 and 3 (2011-2015) only technology-based entrepreneurs were eligible to apply. From 2016 onwards, we intend to open up participation to other selected industry sectors provided the companies are registered in Malaysia, where 51% of the company is Malaysian owned and the primary base of operations is in Malaysia. Additionally, the primary applicant must be Malaysian, aged 18 years and above and residing in Malaysia for the duration of the programme.
No. Applicants will be selected for the most appropriate sub-programme following review of their application forms and an interview process. There are 3 different sub- programmes in the CGP and the content for each sub-programme is customised for needs of the companies in the appropriate stage. They are the Go2Market™ Programme, the Go4Growth™ Programme and GoGlobal™ Programme.
The cost of participating in the CGP is RM25,000 (Twenty Five Thousand Ringgit Malaysia) per company. However, as at 2015 the programme is still fully subsidised by the Ministry of Finance. Terms and conditions apply.
The duration of the Programme is 12 months. However, we understand that you are busy running your business and therefore the minimum commitment required from you is 2 days a month. We will provide you a schedule of coaching dates in advance, so that you can plan ahead.
CGP accepts applications from high growth companies from the following industry sectors:
- Fashion and Creative Sectors
- Internet Based Business
- Green/Clean Technology
- Advanced Electronics
- Engineering Technology
- Mobile Apps
- Internet of Things (IOT)
- Big Data
- Consumer Tech
- eCommerce and Online Sales
- Only coaching programme in Malaysia designed for Scaleups.
- Content of coaching is customised based on your stage of growth.
- Individualised face-to-face coaching with 2 dedicated coaches for 12 Months.
- High performers will be invited to participate in the “Investment Readiness Programme”.
- Formation of Close-Knit Peer and Alumni groups of, currently, 360+ companies.
- Business Clinics, Market Access and Agency Dialogues to support entrepreneurs.
- Experience Sharing events to learn from seasoned entrepreneurs.
- Currently, fully subsidised by Ministry of Finance. No equity taken.
The coaches are experienced Entrepreneurs, Industry Experts, Senior Management from multinationals and GLCs and Investors.
All applications must be submitted in English. If you are unable to complete your application in English, we advise you to get somebody to assist you.