The National Development Council (NDC) said yesterday that it plans to cooperate with local and foreign venture capital firms to establish five US$100 million funds to finance local startup companies.
The project is included in the council’s “HeadStart Taiwan” project, which aims to create a favorable environment for local startups and is likely to be approved by the Cabinet this week, NDC Minister Kuan Chung-ming (管中閔) said on the sidelines of this year’s Taiwan Startup and Venture Capital Policy Forum yesterday.
“We set up five teams for these funds, with each of them to look for its own partners specializing in different industries,” Kuan said.
The National Development Fund (NDF) is to invest 30 to 40 percent of the capital in each fund, Kuan said, adding that the fund plans to allow its venture capital partners to receive more than 60 to 70 percent of the profits that the funds post in the future, Kuan said.
Kuan said the council has talked with many venture capital firms, including 500 Startups, a seed fund and startup accelerator based in Silicon Valley, about joining the project.
Meanwhile, the council also aims to ease regulations for domestic startups to change the par values of their shares, Kuan said.
“Taiwanese companies currently do not need to set the par values of their shares at NT$10 as before, but they are still not allowed to change the values once the figures are determined,” Kuan said.
Kuan said the council still needs to talk to the Ministry of Economic Affairs and Financial Supervisory Commission to change the related rules.
Forum attendee Paul Wang (王伯元), chairman of SerComm Corp (中磊), which makes wireless as well as wired network products, said angel funds that invested in Facebook Inc enjoyed a return on investment of 5,000 times when the company went public, because they invested at a very early stage when Facebook set its par value at a low level.
“The high return on investment is the reason the US has so many angel funds to help startups,” Wang said, adding that a fixed par value of stocks reduced possible return for similar funds in Taiwan.
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