Venture capital fund for innovative startups

VTV.vn - The Capital City Law (amended) and the Digital Technology Industry Law have created a legal framework for the formation of venture capital funds at both national and local levels.

A national venture capital fund for innovative startups will be established.

Establishing a National Venture Capital Fund

Currently, the country has over 4,000 innovative startups and more than 200 supporting intermediary organizations. To further promote and support this innovative startup ecosystem, the amended Capital City Law and the Digital Technology Industry Law have created a legal framework for the formation of venture capital funds at both national and local levels.

State-owned venture capital funds allow for the mobilization of diverse resources, not only from the state budget but also from domestic and foreign organizations and individuals; they are allowed to invest over long-term periods of 10-15 years; focus on strategic technology sectors; and even invest abroad to access new technologies and knowledge, thereby bringing resources back to serve Vietnam. At the local level, the Hanoi Venture Capital Fund has been established with a maximum size of VND 1,200 billion, of which the state budget contributes no more than 49%. Vietnam is also studying the possibility of establishing a specialized stock exchange for innovative startups and venture capital funds, thereby creating a transparent and efficient divestment channel for the startup community.

Currently, there are more than 4,000 innovative startups nationwide.

Hanoi is pioneering the testing of groundbreaking mechanisms.

From a local perspective, Vice Chairman of the Hanoi People's Committee Truong Viet Dung believes that innovation is only truly effective when it is realized in local practice. In the process of perfecting the institutional framework for innovation, Hanoi has been entrusted with the pioneering mission of experimenting with and leading new mechanisms.

Based on the amended Capital City Law, Hanoi has issued six important resolutions covering all stages from research and testing to commercialization. The city has also established the Hanoi Technology Exchange and the Hanoi Innovation Center, operating under a public-private partnership model.

The biggest highlight is the establishment of the Hanoi Venture Capital Fund with a maximum size of VND 1,200 billion, in which the State budget contributes no more than 49%. According to Vice Chairman Truong Viet Dung, State capital plays the role of "seed capital," sharing initial risks to attract social resources.

David Lewis, Chairman and CEO of Energy Capital Vietnam, believes that Singapore's public-private partnership model in venture capital is a valuable lesson, in which the government provides "seed capital" and builds a synchronized ecosystem.

Samuel Ang, a senior expert at the ADB, introduced the concept of "prairie gazelles"—fast-growing businesses capable of solving systemic societal problems.

Taking Hanoi as an example, ADB experts believe that issues such as environmental pollution, traffic congestion, and access to credit are all major challenges. Businesses that offer effective solutions to these problems are potential candidates for the "grass gazelle" group.

According to him, state investment funds need to play a role in providing initial leverage for this group of businesses.

From the perspective of private equity funds, Mr. Le Thanh Nam, Investment Director of Touchstone Partner, emphasized that the value of venture capital funds lies not only in capital, but also in their ability to assess, manage risks, and support businesses in expanding into international markets.

According to experts, venture capital funds, along with specialized stock exchanges, will be important "pieces" to complete Vietnam's innovative startup ecosystem.

With the proactive participation of the State, the leading role of the private sector, and the support of local authorities, Vietnam is gradually building the institutional foundation to transform innovation into a core driving force for rapid and sustainable growth in the coming period.

Source: https://vtv.vn/quy-dau-tu-mao-hiem-cho-khoi-nghiep-sang-tao-100251215080105116.htm