MyCreative Venture Capital

MyCreative Venture Capital

New RM200 million fund launched to provide fundings to companies in the creative industry.

MyCreative is a government investment arm to spur Malaysia’s creative industry via strategic and innovative funding in a form of equity or debt investments.

Aspired by Prime Minister Y.A.B Dato’ Seri Najib Razak during the announcement of the RM200 million fund out of 2012 budget to be dedicated for this purpose, MyCreative was incorporated on 20 April 2012 under the Malaysian Companies Act, 1965 by the Minister of Finance Incorporated (‘MOF(Inc)’).

MyCreative will invest via equities or loans from allocated funds in potential viable Malaysian creative businesses and is expected to achieve the following effects:

– Boost the attractiveness of Malaysia’s creative industry measurable by job creation.
– Increase gross income from Malaysia’s creative industry to significantly contribute to the country’s GDP.
– Elevate the status of Malaysia’s creative industry via public awareness and social impact.

Who Is Eligible, How Do You Apply For Funding And What Are The Requirements?

Malaysian-owned businesses (Companies incorporated in Malaysia and majority owned by Malaysians) in the creative industry as guided by the Dasar Industri Kreatif Negara by Ministry of Information, Communication and Culture, which includes, amongst others:

– Visual Arts (e.g. Galleries, art restoration work)
– Performing Arts (e.g. Theatre, acting/dance academy)
– Music (e.g. Recording studios, music production, music academy)
– Literature (e.g. Book publishers)
– Content Creation (e.g. Film production, animation)
– Fashion and Design (e.g. couture, fashion academy)
– Traditional and Cultural Arts (e.g. Songket making, martial arts, cultural centres)

If the nature of business does not fit in any of the above categories, MyCreative reserves the right to reject applications or to deliberate further should the nature of the business falls within the value chain of any of the above categories.

Businesses can be from viable start-ups to growing companies who pitch ideas that are deemed viable from economic point of view and/or elevating the status of local creative industry. Basic background checks of applicants may be conducted (eg. Criminal and Credit history) that will be factored in the assessment of the application.

Applicants may apply by submitting a form together with business proposal via MyCreative’s web portal . i.e. Pitchbox Tab. The business proposal should consist of concept paper detailing the idea itself, service offerings, target market and other value proposition; as well as financial projections detailing 5 years cash flows, profit & loss and balance sheet highlighting when the business is expected to turn profitable and when funds procured can be repaid.

Generally, the parameters for guidance are as follows:

Funding Format: Loans or Equities (Preferences Shares or Ordinary Shares) or combination such as Convertible Loans. No grants are available.

Cost of Funds: Interest charges for funds will depend on risk assessment on the applicants. Hence, the quantified interest charges will only be determined once the due diligence on the business plan is completed by management team of MyCreative. Interest charges will therefore differ from one case to another. For Equities, a case by case assessment will be done on the exit strategy of the investment factoring capital gains or future dividend streams at least matching the return expectation of what a loan would give.

Profitability Gestation Period: Depends on case by case basis taking into account nature of business. Generally, 1 to 2 years expectation of business consolidation before the business starts showing profitability and ability to start paying back the funds.

Funding Limit: At this juncture, please submit your funds requirement that best reflect your business model requirement for a 5 years frontier that shows when funds are needed, how and when it is used; and when it will be repaid back. Management of MyCreative shall deliberate on the requirement in accordance with the governance in place taking into account the merit of the case.

Ownership Limit: Should MyCreative invest in equities of the applicants, there shall be maximum ownership interest depending on the case by case business and capital structures of the applicants. Such limits will only be discussed once the due diligence on the business plans by the applicants is completed. The ownership interest may differ from one case to another.

MyCreative may include terms and conditions in the funding arrangement that allow MyCreative to have representation on the Board of Directors of the applicant company.

Risk assessment of business proposals shall take into account, but not limited to: Credit history, Collateral availability, Conditions of the business (eg Start up or established), Cash flow strength and Capital structure pre-funding from MyCreative.

www.mycreative.com.my

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