Procedures for establishing an innovative startup investment fund

Establishing an innovative startup investment fund is an important factor in promoting development and providing funding for innovative projects. This is an investment mechanism for innovative small and medium-sized startups. Investors need to meet the conditions of financial and management capacity. This article will introduce how to establish an effective and sustainable innovative startup investment fund.

What is a creative startup fund?

Creative start-up investment fund is an intermediary financial institution that mobilizes capital from private investors to invest in creative start-ups. The main goal is to promote entrepreneurship and innovation activities in Vietnam.

Innovative startup investment fund has the following characteristics:

• The Creative Startup Fund has no legal status and is established by up to 30 investors on the basis of the Fund’s Charter.
• Creative startup investment funds are not allowed to contribute capital to other creative startup investment funds.
• Capital contributed assets can be in Vietnam Dong, gold, land use rights value and other assets can be valued in Vietnam Dong. Investors are not allowed to use loan capital to contribute capital to establish an innovative startup investment fund.
• All capital contributions and assets of investors in the fund must be accounted for independently of the fund management company.
• Investors contributing capital to establish a fund agree on their authority to decide on the investment portfolio and this content must be stipulated in the Fund Charter and the contract with the fund management company (if any).

Innovative startup investment funds play an important role in the startup ecosystem. The fund provides capital and support for startups to develop, while creating attractive investment opportunities for investors. The development of these funds contributes to promoting innovation and economic growth.

Based on the content of Article 5 of Decree 38/2018/ND-CP.

Organizational structure for creative startup investment fund management

Based on the content of Article 7 of Decree 38/2018/ND-CP, the Innovative Startup Investment Fund is organized and managed according to one of the following models:

• Congress of investors and companies implementing innovative startup investment fund management;
• General Meeting of Investors, Fund Representative Board or Fund Director, company managing innovative startup investment fund;
• Investors’ Congress, Fund Representative Board and Fund Director, company managing innovative startup investment fund

In there:

• The General Meeting of Investors includes all investors contributing capital to the fund and is the highest decision-making body of the fund.
• The Fund Representative Board and Fund Director are elected by the General Meeting of Investors to represent investors
• The company that manages creative startup investment funds is a company established according to the law on enterprises, with the industry and profession of creative startup investment fund management.

Fully meeting the above conditions is the basis for the competent state agency to consider granting a Fund Establishment Registration Certificate. The Fund is only allowed to operate after receiving this certificate.

Process and procedures for establishing an innovative startup investment fund

The process of establishing an innovative startup investment fund includes many steps. Following these steps correctly ensures the fund is legally established and can begin operations. Pursuant to the provisions of Article 11 of Decree 38/2018/ND-CP, procedures for establishing an innovative startup investment fund follow the following steps:

Documents need to be prepared

To establish an innovative startup investment fund, the application file to establish an innovative startup investment fund includes the following documents:

• Notice of the establishment of an innovative startup investment fund according to the form in the Appendix issued with Decree 38/2018/ND-CP;
• Fund Charter;
• Contract to hire a fund management company (if any);
• Bank confirmation of the size of contributed capital;
• Certified copy of identity card, passport, identification card for individual investors;
• Establishment decision, business registration certificate or other equivalent documents for institutional investors;
• Minutes of meetings and decisions of the General Meeting of Shareholders or the Board of Directors;
• Decision of the Board of Members or of the owner for investors who are capital contributing organizations on contributing capital to the fund, on appointing a representative of the authorized capital contribution along with the personal profile of the person.

DOWNLOAD NOW HERE: FORM NOTICE OF ESTABLISHMENT OF INNOVATIVE STARTUP INVESTMENT FUND

Process of establishing an innovative startup investment fund

Procedures for establishing an innovative startup investment fund comply with the provisions of Article 11 of Decree 38/2018/ND-CP with the following steps:

Step 1: Submit application

Within 05 working days from the date the creative start-up investment fund is established, the company managing the fund must submit the dossier to establish the creative start-up investment fund to the business registration agency where the company is located. set up its headquarters before the fund operates.

Step 2: The business registration agency processes the documents

• The business registration agency is responsible for reviewing the validity of the notice and accompanying documents within 15 working days from the date of receipt of the notice.
• In case the notice and accompanying documents are valid, the business registration agency shall send a document to the fund management company regarding the establishment of a valid fund.
• In case the notice and accompanying documents are not valid, the business registration agency shall send a document to the fund management company and must clearly state the reason and requests for amendments and supplements (if any). ).

Step 3: Announce information about establishing an innovative startup investment fund

• Within 05 working days from the date of notification of valid fund establishment, the fund management company shall publish information about the establishment of an innovative startup investment fund on its website or portal. The company’s electronic implementation of fund management.
• The company sends a copy of the fund establishment notice to the Ministry of Planning and Investment for publication on the National Information Portal to support small and medium enterprises. The fund can only operate after its information is published on the National Information Portal to support small and medium enterprises.

During implementation, the following points should be noted:

• Strictly comply with relevant legal regulations;
• Prepare complete and accurate documents to avoid returns;
• Careful selection of partners (fund management company, custodian bank);
• Develop a feasible and attractive investment strategy for investors

How to manage and operate an innovative startup investment fund?

Managing and operating an innovative startup investment fund requires compliance with legal regulations and application of effective governance principles. Fund operations need to ensure transparency, protect investor interests and optimize investment efficiency. Key aspects of fund management and operations include:

Portfolio management:

• Develop investment strategies consistent with fund goals;
• Appraisal and selection of potential investment projects;
• Allocate investment capital appropriately, diversify portfolio;
• Supervise and support investment businesses;
• Periodically evaluate investment effectiveness and adjust strategies

Risk management:

• Build a comprehensive risk management system;
• Identify, evaluate and control types of risks;
• Establish investment limits and approval processes;
• Implement risk prevention measures

Reporting and information disclosure:

• Prepare financial reports and periodic activity reports;
• Disclose information according to legal regulations;
• Provide timely information to investors

Compliance with the law:

• Ensuring operations comply with the Fund Charter and legal regulations;
• Follow investment processes and procedures correctly;
• Managing conflicts of interest;
• Update and apply new regulations

To manage and operate the fund effectively, attention should be paid to:

• Build a strict investment decision-making process;
• Establish a modern information and data management system;
• Regularly evaluate and improve operating processes;
• Maintain good relationships with stakeholders

Consulting services on establishing and managing innovative startup investment funds at Long Phan

Long Phan provides professional consulting services on establishing and managing innovative startup investment funds in Vietnam. Long Phan’s consulting services include:

• Consulting on fund establishment, including feasibility analysis of the fund establishment project; Drafting Fund Charter and legal documents;
• Instructions for preparing establishment registration documents;
• Support in implementing procedures with state agencies
• Consulting on organizational structure and fund management
• Support building a risk management system
• Support in resolving related issues after successful fund establishment

Establishing an innovative startup investment fund requires strict compliance with legal regulations and complex processes. Long Phan provides comprehensive consulting services, supporting customers in all stages of fund establishment and management. Customers can immediately contact us via Hotline 0906.735.386 for in-depth support.