[Cradle] Frequently Asked Questions

1. Who is Cradle Fund Sdn Bhd?

Cradle Fund Sdn Bhd (Cradle), an agency under the Ministry of Finance, Malaysia (MoF) is the organisation that manages the Cradle Investment Programme (CIP). A total sum of RM100 million was initially allocated to us for this programme by MoF since it began in 2003. An additional RM50 million was recently added to the allocation under the 10th Malaysia Plan.

2. How does Cradle support entrepreneurs?

Through the CIP, Cradle offers the funding to entrepreneurs/researchers/innovators to either develop their ideas into prototypes/proof-of-concepts or to attain commercialisation. In addition to providing funding, we also offer developmental services and commercialisation support which includes mentorship, competency building trainings, funding pipeline access via the Ideas Bank unit, as well as commercialisation benefits from our Strategic Partnerships with the various industries, government and funding partners.

3. Is the funding offered by Cradle a grant or a loan?

The funding offered by Cradle is a conditional grant.

4. What is a conditional grant?

Under Cradle’s terms, a conditional grant denotes that a recipient will have to repay the amount of the grant received from us if:


  • The recipient fails to complete the implementation of deliverables (i.e. Business Plan or Prototype) that he/she has committed to; or
  • The recipient wishes to withdraw from the CIP during the implementation process.
  • The recipient receives other forms of funding or financing or a sales contract worth a minimum of RM500,000 within 12 to 24 months upon completing the development of their prototype or proof-of-concept, subject to terms and conditions (within the Ideas Bank stage). In this instance, the grant will be converted into a loan.
In such cases, the recipient will be obliged to return to us the amount of the current tranche, and the amount of one previous tranche that has been disbursed to him/her, plus an administration fee at the rate of 4% per annum. While these conditions exist, it rarely happens as most entrepreneurs with genuine innovative technology-oriented ideas want their ideas to be commercialised and thus fulfill their contractual obligations in order to avoid having to repay the grant.

5. How are the pre-seed and seed grants offered by Cradle different from other grants?

Our pre-seed and seed grants are different from other grants as our investment focus is in diverse areas of ICT, non-ICT and high-growth technology industries, which includes:

ICT
  • Mobile / wireless tech
  • Creative multimedia and content development
  • Shared services and outsourcing
  • Hardware design
  • Software development
  • Internet-based businesses

Non-ICT
  • Biotechnology
  • Advanced materials
  • Advanced manufacturing-related tech
  • Renewable energy / waste management / recycling tech
  • High-technology consumer and business products

Others
  • Semi-conductors
  • Life sciences
  • Clean technology

Apart from that, we also provide our recipients with commercialisation support such as mentoring throughout the duration of the entire project, market access and funding pipeline access via its Ideas Bank unit and Strategic Partnerships, as well as financial training and capacity building trainings throughout their funding period.

6. How does Cradle make money?

We do not. Cradle is a not-for-profit government-linked agency with the responsibility of disbursing allocated funds for the benefit of the nation’s technology entrepreneurs, and to meet the key performance indicators as set by the stakeholders of the programme (which are the Ministry of Finance and Cradle’s Board of Directors). Our organisation operates on the allocated percentage management fee of these allocated funds. As a developmental and commercialisation fund, our top priority is to create a critical mass of sustainable technology entrepreneurs with good potential for growth.

However, under the Cradle Investment Programme, we will convert the grant into a loan if an idea receives other forms of funding or financing or a sales contract worth a minimum of RM500,000 within the Ideas Bank stage (which is generally a period of 12 to 24 months, subject to terms and conditions). This amount will be fed back into the CIP fund to help other deserving entrepreneurs. As your idea commercialises, you will grow into a company, creating jobs, creating Intellectual Property, making profits and paying taxes. This is how the government eventually recovers what is given out to you.

7. Who are Cradle’s Strategic Partners?

Cradle’s strategic partners can be divided into six (6) different groups according to their various roles. They include:
  • Funding Partners: Financial investors such as venture capitalists, angel investors or commercial investors. Examples are MAVCAP and SME Bank.
  • Commercialisation Partners: Organisations which are able to provide a commercial perspective to the entrepreneurs, such as Westport and Siemens.
  • Industry Partners: Industry-specific organisations that can help promote the CIP and provide input on industry needs and expectations, such as TeAM and MACRI.
  • Government Partners: Government agencies or ministries whose change in decisions, protocols or government plans may impact the progress and growth of the CIP. Examples are the Ministry of Finance and the Ministry of Science, Technology and Innovation.
  • Outreach Partners: Organisations or individuals situated outside the Klang Valley which will help promote the CIP in the respective state where it is based and provide input on the states’ technology industry needs and expectations. Examples: 3 stages – national, state and industry.
  • Technology Partners: Companies that can provide value add to our programme offering promotional products, tools, platforms or services that can lessen the cost of development for the entrepreneur and also conduct testing or certification of the said product. They can also offer programmes for training and development in specific technology areas to enhance the skill sets of our entrepreneurs.

Extracted from Cradle Fund Sdn Bhd
http://www.cradle.com.my/faq/

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