COMMERCIALIZATION OF NEW TECHNOLOGY-BASED PRODUCT

DEFINITION:
1) New technology-based product is the output developed from innovative activities that
take place in a successful R & D (research and development)
2) Commercialization of Research and Development refers to efforts taken to introduce new
technology-based product to the market with the aim of gaining commercial return.
OPTION TO COMMERCIALIZE RESEARCH & DEVELOPMENT
1)
2)
3)
4)
5)

Outright sale of the R&D output before securing IP (intellectual properties)

Get into licensing agreement with established private organization after securing IP
Get into Assignation agreement with buyer
Spin-off by starting a new venture from within the established research organization.
Spin-out by starting a new venture independent of the research organization where the
new technology-based product was developed.

RISK OF NEW VENTURE

1) Technological uncertainty
2) Strategic uncertainty
3) Uncertainty in first time buyers
BARRIER TO ENTRY
1)
2)
3)
4)
5)

The cost of adopting technology in the industry

Access to distribution channel
Access to raw material
Cost inefficiency due to lack of experience
The cost of capital required to launch the new venture

FINANCING TECHNOLOGY VENTURE

INTRODUCTION:

Generally, capital can be obtained from at least three categories of resources, either
solely, or a combination of the three:
Entrepreneurs own resources
Resources from external investors
Government financing schemes (loans, grants & government venture capital funds)

THE NEED FOR FINANCE

1)
2)
3)
4)

To determine start-up cost

Shortfalls of revenues over expenses
Fixed assets replacement
Growth

STAGES OF FINANCING
1)
2)
3)
4)

Research & Development: Pre-seed financing

Pre-Commercialization: Seed financing
Commercialization: First round financing
Growth & Expansion: Second & Third round financing

SOURCES OF FINANCING
o Governments Financial Assistance
o Venture Capital (VC) Financing
o Banking and Development Financial Institutions (DFIs)
GOVERNMENT FINANCING SCHEMES FOR TECHNOLOGY VENTURE IN
MALAYSIA
1) Malaysian Venture Capital Management Berhad (MAVCAP)
o Communications and networking
o Electronics
o Semiconductor
o Internet
o Information technology
o Bio-tech and life sciences
o Medical and health services and device/equipment
o Other new areas of high growth.

2) Malaysian Venture Capital Management Berhad (MAVCAP)

o Seed Venture Fund: Idea/Pre-Start-Up Stage
o Direct Venture Fund: Start-Up, Early Growth, Expansion, Rapid and Mature
Growth
o Cradle Investment Program [CIP]
o University Cradle Investment Program [U-CIP]
3) Multimedia Development Corporation (MDeC)
o The MSC Malaysia R&D Grant Scheme (MGS)
o Technopreneur Pre-Seed Fund Program
4) Malaysian Technology Development Corporation (MTDC)
o Venture Capital Funds
o Special-Purpose Government Grants
5) Ministry of Science, Technology and Innovation (MOSTI)
o InnoFund
o Technofund
o Content Fund
6) SME Corporation Malaysia (SME Corp)
o Matching Grant for Business Start-ups
o Matching Grant For Product And Process Improvement