Approval of the pilot project to establish a Hanoi City Venture Investment Fund

Delegates passed the resolution at the meeting. *Photo: Viet Thanh*

Presenting a report at the meeting, Director of the Department of Science and Technology Tran Anh Tuan said that in the context of an economy increasingly dependent on knowledge and innovation, countries and localities with sustainable development orientations all focus on building an ecosystem to support startups, especially innovative startups.

Hanoi is one of the largest economic, political and educational centers in the country, home to many research institutes, universities, start-up support organizations and especially a dynamic team of young intellectuals and entrepreneurs.

However, one of the biggest barriers for innovative startups is the difficulty in accessing capital, especially early-stage venture capital. Meanwhile, private investors are often hesitant due to high risks, lack of information, and lack of investment management support tools.

On that basis, the establishment of a State-owned Venture Capital Fund in Hanoi is necessary to provide strategic capital and non-financial support (training, consulting, international connections), helping innovative startups develop products, improve competitiveness, and contribute to double-digit economic growth. In addition, it promotes the formation and development of an innovative startup ecosystem, connecting components: Universities, research institutes, investors, innovative startups and international partners, especially in Hoa Lac High-Tech Park, in line with the socio-economic development needs of Hanoi.

Accordingly, the pilot establishment of Hanoi City Venture Capital Fund with the name: Hanoi City Venture Capital Fund (Hanoi Venture Capital Fund - HVCF).

Legal status of Hanoi City Venture Investment Fund (abbreviated as City Venture Investment Fund) is a fund established by Hanoi City People's Committee and operates under the public-private partnership model based on a business investment cooperation contract (BCC), without legal entity status.

The Fund is provided with charter capital from the local budget, receives sponsorship, and mobilizes other legal capital sources according to the provisions of law with the aim of investing capital in high-tech enterprises, science and technology enterprises, and innovative startups in key areas of science and technology of the Capital to support, promote innovation and commercialization of scientific and technological products.

The Fund operates according to market principles, accepts the possibility of risk, ensures publicity, transparency, efficiency, and prevents loss and waste of capital.

The City People's Committee plans to pilot the establishment of the Fund for 10 years from the date the competent authority approves the establishment decision; after the first 5 years, a preliminary assessment of the project implementation results will be conducted, and after 10 years, a final assessment of the pilot establishment of the Fund will be submitted to the City People's Council to decide whether to continue or terminate the Fund's operations.

Organizational structure - The investor congress includes the Hanoi People's Committee and a maximum of 6 private investors contributing capital established on a Capital Contribution Contract.

The Fund Management Board is elected by the Investors' Congress, including the Chairman of the Board, Vice Chairmen of the Board and members of the Board (representatives of the State's capital contribution, representatives of the investor group and experts with experience in the fields). The maximum number of members is 9 people.

The Fund Management Company is hired by the City Venture Capital Fund to carry out capital management and investment activities according to the fund management contract signed with the Fund Management Board.

Fund formation capital - The capital of the City Venture Capital Fund is formed from capital contributed by the Hanoi City budget and a maximum of 6 investors as agreed in the Fund Charter and Capital Contribution Contract. The capital contributed by the State budget to the capital of the City Venture Capital Fund is decided by the City People's Council.

Investors are domestic and foreign organizations or individuals that meet the conditions prescribed by law and the Fund Charter.

The minimum capital contribution level and the capital contribution mechanism of each investor are specifically stipulated in the Fund Charter. The Fund may receive grants, aid and other legal sources of capital according to the decision of the Investors' Congress and in accordance with the provisions of law.

The City Venture Capital Fund's charter capital is allocated from the city budget, capital contributions from investors, and is allowed to receive sponsorship and mobilize other legal capital sources according to the provisions of law. The capital contribution from the city budget shall not exceed 600 billion and shall not exceed 49% of the Fund's charter capital. The remaining capital contribution from investors must meet the conditions in the Charter and is implemented through a Capital Contribution Contract.

Source: https://hanoimoi.vn/phe-duyet-de-an-thi-diem-thanh-lap-quy-dau-tu-mao-hiem-tp-ha-noi-717685.html