Kordin Business Incubation Centre

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Kordin Business Incubation Centre
November, 2003
Ing. Ray Muscat
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The Incubation Model

• Incubators act as an economic catalyst,
  forming an part of a nations support
  infrastructure, being instrumental in
  identifying, encouraging and supporting people to
  start their own businesses with the development
  of innovative and high value-added products. In
  essence, incubators play a nurturing and
  interactive role in assisting new and emerging
  businesses to survive and grow.

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Advisory Committee

• The Advisory Committee was set up by the IPSE
  Board of Directors during December 2000
• Mr Joe Zammit Tabona (Chairperson) Chairman of
  Malta Enterprise
• Ing. Ray Muscat KBIC Operations Manager
• IPSE Representatives (2)
• University Representative
• Bank of Valletta Representative
• HSBC Bank Representative
• MCAST Representative
• Once Malta Enterprise is operational the
  Advisory Committee would be re-configured

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Governance Framework
Enterprise Support Innovation Division (Malta
Enterprise)
Private Enterprise (local foreign)
Institutional Partners
Advisory Board
Incubator Companies
Incubator Manager
Other Institutional Partners, Industrial
Community, Service Partners
Incubator staff, seconded specialised staff
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Focus of KBIC Project

• The focus is a mixed technology oriented type of
  incubator. The targeted industrial groups are
• information and communication technologies
• engineering design and development of equipment
  systems and other design related type of projects
• renewable energy resources
• biotechnology
• other innovative projects that are considered to
  be pioneer projects in Malta

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Client Eligibility

• The proposed venture falls within one of the
  target industrial groups.
• The enterprise must be a start-up or a near
  start-up, which shows that it requires the
  services of the incubator.
• The enterprise must be operating in the Maltese
  Islands.
• The client reasonably demonstrates that private
  funding is at least sufficient to carry it
  through the first year of operation.

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Admission Process

• Step 1 - Information Exchange
• Step 2 - Application Form Interview
• - to test whether the proposal is technically
  achievable and commercially realisable
• - applicants may be accepted on a temporary
  basis (pre-incubation stage of 9 months) to
  enable them to refine their business idea prior
  to Step 3
• Step 3 - Final Review Decision
• - once approved the applicant will be invited
  to sign a 3 year tenancy agreement

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Admission Operating Framework
IPSE Promotion
Direct Scouting
Institutional Partners
Detection, Selection Information Exchange of
Entrepreneurs (Admission criteria)
Registration as a pre-incubation client
Rejects
Application
Final Plan (Business Plan)
Rejects
Training
On admission tenants will undergo a practical
business training course
Agreement
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Incubation Operating Framework
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Incubation Period

• The tenancy period is generally set for three
  years, at the end of which the incubator may
  assist the client to
• relocate the business
• provide assistance for an extended period of two
  years according to performance criteria
• provide linkages to other forms of finance

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Client Performance Monitoring

• Frequent interaction of the client with the
  management staff on an informal basis
• The achievement of the goals that were identified
  in the business plan, both in terms of
  accomplishments, financial and market results
• Review of quarterly financial reports or earlier
• The periodic updating of the business plan

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Exit Criteria

• The client may be asked (is ready) to leave
  the incubator when
• it is a candidate for graduation
• its actions or activities would conflict
  drastically with the project
• it reaches the pre-agreed exit time limit
• the commitment shown by its management would be
  totally inappropriate
• its controlling interest has changed since its
  admission in the incubator

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Business Development Route
Mentoring Services
Incubation Services
Provision of expert services
Client
Concepts
Provision of basic specialised business
services, a conducive environment, funding and
networking
Identifying and attracting potential entrepreneurs
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Financing
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• Venture Capital
• Seed Funds
• BANs
• Royalties
• Loans
• Grant money

Inter-Nationalisation
5
Licensing
(I.P.O.)
4
Partnering
Information Exchange - Idea generation and capture
Management
1
3
2
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Evaluation
Protection

• IPR
• RD
• Technology Comm.
• Design

Business Plan
Business Environment
Specialised Assistance
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Portfolio of Services

• Standard Support Services
• Business counselling and support (up to 10 hours
  per month), induction course (14 sessions),
  direct business planning and implementation
  support (Lm2,000 implementation grant),
  networking, reception and secretarial services,
  facility space and infra-structure, common
  areas, conference room, office equipment and
  meeting rooms, security, mail handling, office
  work, telephone and network data connectivity,
  furniture, air-conditioning, etc.
• Specialised Consultancy Support
• 5 hours per month per client of specialised
  services
• Financial advice, taxation, legal issues,
  intellectual property registration, negotiation,
  licensing, etc.
• Career Enterprise Scheme (for first-time
  entrepreneurs)
• Seed Capital (Concept to Business Plan)
• New Enterprise Loan Guarantee Scheme

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Career Enterprise Scheme

• To encourage first-time entrepreneurs
• - Business Plan Grant reimbursement of up to 50
  of the cost of preparing a business plan, with a
  maximum amount payable being Lm150
• Service Charge Subsidy Grant 35 subsidy on the
  service charge
• Enhanced Loan Guarantee Scheme
• - Child-care support Grant reimbursement of up
  to 50 of the annual commercial cost of
  child-care support services, for every year of
  the incubation period, up to Lm500 per year per
  child, but up to two children

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Facility

• 57 units, ranging from 25sq.m to 150sq.m, thus
  providing a flexible space arrangement
• Each unit is equipped with a basic
  infrastructure of electricity, water, telephony,
  data connectivity, furniture and air-conditioning

• Management block is equipped with a conference
  and meeting rooms, reception, fully fitted
  kitchen and leisure room
• Premises is monitored by CCTV system controlled
  access, fire systems, public address system and
  forced ventilation

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Service Charges for 2003
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Seed Capital (TVF)

• Bridge financing to assist start-ups from concept
  to business plan for specific initiatives
• Financing in the form of Cumulative Redeemable
  Preference Shares at 3 dividend during the first
  three years. Redemption will initially be at par
  and may increase over time to encourage earlier
  redemption.
• Investment up to Lm15,000, with a 50/50 matching
  and repayable over a maximum period of ten years
• To support part-wages, development tools,
  specialised fairs, RD, intellectual property
  registration, market research, direct marketing,
  technology transfer, etc.

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New Enterprise Loan Guarantee Scheme (NELGS)

• Assisted loans will be granted to fund up to 80
  of the clients requirements
• Assisted loans may be repayable over a maximum
  period of 10 years inclusive of a two years
  moratorium on capital repayments
• The maximum LGS will be up to Lm40,000
• The loan account guaranteed will benefit from a
  preferential rate of interest

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Thank you