ATI-2013 - Frequently asked questions and answers
ATI-2013 - Frequently asked questions and answers
18 July 2013
Modified: 14 December 2017
Reading time: 27 minute(s)
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Is it possible to apply for the I. sub-program of the Building the Technological Start-up Ecosystem (Start-up_13) call for proposals of the Research and Technology Innovation Fund only after being awarded the title of „Accredited Technological Incubator” (ATI)?
The technological incubator applying for the I. sub-program of the Start-up_13 call for proposals has to be awarded the title of „Accredited Technological Incubator” (ATI) in advance. The proposals for the I. sub-program may be submitted from 1 July 2013 until 31 October 2013 the latest. Technically, it is quite conceivable to submit the proposals for the I. sub-program of the Start-up_13 call for proposals before the title of „Accredited Technological Incubator” (ATI) have been considered.
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Is October 1, 2013 the earliest date for submitting the proposal for the I. sub-program of the Start-up_13 call for proposals?
The proposal for the I. sub-program may be submitted already from July 1, 2013 until October 31, 2013 the latest.
The Building the Technological Start-up Ecosystem (Start-up_13) call for proposals of the Research and Technology Innovation Fund is available on the website of the National Development Agency: http://www.nfu.hu/doc/4146
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Is the „Accredited Technological Incubator” call for proposals open for existing and newly established firms as well?
Existing and newly established firms may apply as well for the „Accredited Technological Incubator” title.
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If the applicant does not have 2 closed full financial years (2*365 days), could it still apply for the Accredited Technological Incubator title and for the Start-up_2013 sub-program with a negative equity capital in its last closed financial year?
In case the applicant does not have 2 closed full financial years (2*365 days) or neither of the two consecutive years have a balance sheet with a negative equity capital, there is no legal impediment to the submission. If the capital position is settled, the interim balance sheet is required to be submitted as part of the application package in addition to the annual report, from which can be seen that the problem of negative equity capital has been solved.
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Can the corporation applying for the Accredited Technological Incubator title associate with other companies in order to provide the services and fulfill other requirements (is it possible to apply as a consortium)?
The application for the Accredited Technological Incubator title is not open for consortiums.
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Based on the call for proposals it is not clear what the Board of Directors and the management of the incubator refer to. What is the difference between the two bodies?
In developing the conceptual framework it was important that the incubator has/sets up a dedicated board within the organization, which is in possession of all the relevant professional competencies has clear set of authorities and responsibilities for the management and thereby for the design of the overall strategy. In case of public limited companies the Board of Directors as a body is responsible for management, that ensure an appropriate framework to enforce and verify the above mentioned aspect. The relevant conditions of the „Accredited Technological Incubator” (ATI-2013) call for proposals has been developed as well in accordance with this criteria.
According to the concept of the call the management is the responsible body for the continuous operation.
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Is it possible to use resources from the JEREMIE program to ensure the necessary deductible in case of the accredited technological incubators applying for the I. subprogram, or does the equity only refer to pre-existing private funds and on the free market available resources (such as loans, etc.)?
Can the incubator use resources from this program to ensure the deductible for investing in the incubated companies? (III. subprogram)
Is it realistic to use resources from the JEREMIE program as support for the market-entry of the successfuly incubated companies? (IV. subprogram)
If it is possible to use the resources from the JEREMIE program in case of the above mentioned programs, so are there special conditions, limits (aid intensity), rules for it?
Given that venture capital is not determined on the basis of eligible expenses, the general grant-cumulation rules (the same eligible expenses altogether are not allowed to exceed the maximum aid intensity) are not applicable.
Rather, the rule in the 6. paragraph of the venture capital guideline is applicable.
According to this guideline, if the capital provided to the company, which was targeted by venture capital related measures, are used to cover eligible initial investment or other allowable expenses based on other block exemption regulations, guidelines, frameworks or other rules on state aid, then the relevant aid ceiling or the maximum allowable amount of aid is reduced generally by 50 %, and in case of enterprises on assisted areas by 20 % during the first three years of the first venture capital investment and up to the amount received. The mentioned reduction does not apply to aid intensities, which are specified under the Community Framework for State Aid for Research and Development or its succesor framework or the block exemption regulation in this area.
Therefore the venture capital from the JEREMIE program can be cumulated both with R+D funding and with de minimis aid.
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Does the applicant need to fulfill the requirements defined in the B.3. paragraph of the accreditation call at the time of the submission, or is it sufficient later during the project/ business plan? (eg. is it required to have a Board of Directors at the time of the submission, or is it sufficient to set it up later during the project; or is a still majority state / local government-owned company allowed to apply for accreditation)
The applicant needs to fulfill some of the requirements stated in B.3. paragraph already at the time of the submission (eg. selection methodology, business plan), in case of others it needs to be verified by documentation that the requirements will be met (eg. incubation services). At the time of the submission the applicant needs to have a pre-compiled Board of Directors in order to introduce the sufficient competences and the professional background.
According to the investment conditions of the B.3. paragraph – which states that the private equity needs to be in majority in the technology incubator in order to be granted state aid as a company – a majority state/local government-owned company is not allowed to apply for the accreditation.
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According to the first answer of the Frequently Asked Questions the application for the I. subprogram of the Start-up_13 can be submitted already before the end of the accreditation process. What will happen with the application for the Start-up_13 proposal, if the accreditation is not approved? (Will the application be considered, may it be conditionally supported or will it be rejected without substantive evaluation)
As it is determined in the selection criterias of the F.1. paragraph of the Start-up_13 call for proposals the submitted applications for the I. subprogram will be substantively evaluated based on the prerequisites. If the application does not fulfill any of the prerequisites, the application will be rejected with score 0. Therefore, if the applicant is not certified as an accredited technology incubator, its application will be rejected as the 1.5. evaluation criterias are not fulfilled. Therefore the application before the end of the ATI evaluation process is only a theoretical possibility.
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Will it cause any benefit, extra points if clusters enter the contest?
There are no extra points for cluster applicants determined in the Start-up_13 call. Please bear in mind that business associations with a registered seat in Hungary and double-entry accounting, or branch sites of a business association with a registered seat in the territory of the European Economic Area, a branch site in Hungary and double-entry accounting, may submit a proposal to the Call for Proposals, provided they have the below KSH (Hungarian Statistical Office) classification (based on KSH Communication 8/2010 (Aug. 25) on the Elements and Nomenclatures of the Statistical Code): joint share company (KSH 114); European joint stock company (KSH 115).
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The relationship between the ATI and the Start-up_13 call for proposals:
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may a common decision be expected from the NIH and the NDA in the ATI evaluation process?
One of the seven members in the Selection Committe will represent the fund manager of the Research and Technology Innovation Fund, the National Development Agency (NDA), therefore a representative from the NDA will also be involved in the decision-making about the Accreditation Certificate.
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may a common decision be expected in relation to the applications for the Start-up_13 and the ATI-2013 call?
There is no common decision in relation to the applications for the Start-up_13 and the ATI-2013 calls. The content of the two calls are different, as the ATI-2013 is aimed at winning the Accredited Technological Incubator title, and the Start-up_13 is an entire program encompassing 4 subprograms. According to the calls the ATI title will be evaluated separately. In the 4 different subprograms of the Start-up_13 call the conditions and criterias are different. However, there is a connection between the ATI and the Start-up_13 call, since winning the Accredited Technological Incubator title provide an opportunity for the applicant to apply for the I. subprogram of the Start-up_13 call announced to the debit of the Research and Technology Innovation Fund.
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considering the evaluation process at the ATI-2013 call what does the phrase „ shall be awarded to Applicants that meet the requirements at the topmost level? Is it possible that:
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the applicant wins the ATI title, but it does not ask for aid? (the following text is written on the 4. page of the ATI-2013 contest in gray: „Applicants are hereby informed that being awarded the title of Accredited Technological Incubator will entitle them to enter Sub-program I in the call for tenders "Technological start-up ecosystem development" (code: Start-up_13), announced to the debit of the Research and Technological Innovation Fund.” In other words, the term also includes the possibility that the applicant does not ask for aid.)
The applicant being awarded the Accredited Technological Incubator title can not be imposed to enter the Start-up_13 call for proposals, but the applicant being awarded the title is presumed to have interest in entering the Start-up_13 call, since the applicant invested energy in winning the title in order to be entitled to enter the I. subprogram of the Start-up_13 call.
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an applicant being awarded the ATI title will not be supported with its submitted application on the Start-up_13 call? Or obviously only the ones already gained/gaining support on the Start-up_13 call can be awarded the ATI title as a result of a common decision?
As it is determined in the selection criterias of the F.1. paragraph of the Start-up_13 call for proposals the submitted applications for the I. subprogram will be substantively evaluated based on the prerequisites. If the application does not fulfill any of the 5 prerequisites, the application will be rejected with score 0. Decisions on winning the ATI title and gaining support from the I. subprogram of the Start-up_13 call are not made simultaneously.
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the applicant wins the ATI title, but it does not ask for aid? (the following text is written on the 4. page of the ATI-2013 contest in gray: „Applicants are hereby informed that being awarded the title of Accredited Technological Incubator will entitle them to enter Sub-program I in the call for tenders "Technological start-up ecosystem development" (code: Start-up_13), announced to the debit of the Research and Technological Innovation Fund.” In other words, the term also includes the possibility that the applicant does not ask for aid.)
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may a common decision be expected from the NIH and the NDA in the ATI evaluation process?
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Business associations are entitled to enter the Start-up_13 call, while only public limited companies are entitled to enter the ATI-2103 call. Therefore, is it possible that the Start-up_13 call does not contain the prerequisites correctly?
The requirements of the Start-up_13 and the ATI call are not contradicted, they contain the exact terms. However only the applicants being awarded the ATI title are entitled to be supported from the I. subprogram of the Start-up_13 call (while fulfilling the other required conditions).
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Are deadline extensions for submission/evaluation expected in the contest due to the harmonized decision?
In developing the deadlines it was important to make decisions about the applicants as soon as possible, in order to let projects start soon in case of gained support. Therefore deadline extensions for submission/evaluation are not expected. The applicant will already have the majority of the necessary documents for entering the Start-up_13 contest ready for the ATI contest.
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Clarification is needed about the HR requirements of the ATI call: according to the ATI contest:„Conditions concerning experts: The number of experts employed full-time in the staff of the incubator or involved in the work of the incubator … „
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who is appropriate as a full-time employed expert, and for which competence or position is an involved employee acceptable? According to the contest: “The management of the incubator includes a full-time manager responsible for business development, and an office manager.” Therefore is it sufficient to have the above mentioned two people full-time employed, and can the other employees be involved?
It is sufficient if the management of the incubator includes a full-time manager responsible for business development, and an office manager. In this case the manager responsible for business development is responsible for the overall operative management of the incubator. (This is not necessarily the best solution.)The experts described in the paragraph “Conditions concerning experts” may be full-time employed or involved, there are no restrictions in this respect.
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is it necessary to have the experts full-time employed at the time of the application or is it sufficient to have them employed after winning the award?
It is sufficient to sign a Memorandum of Understanding by both parties with the clause that if any of the commitments which was scored regarding the conditions of the ATI contest are not satisfied, then the ATI title may be withdrawn (at the time of signing the contract with the National Development Agency the requirements already need to be satisfied).
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what form of employment does “involved” expert refer to?
The form of employment was not specified in the call, the experts may be involved for example via agency contracts.
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how is it appropriate to prove the involvement of experts?
It is appropriate via binding pre-agreement, contract or Memorandum of Understanding signed by both parties.
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who is appropriate as a full-time employed expert, and for which competence or position is an involved employee acceptable? According to the contest: “The management of the incubator includes a full-time manager responsible for business development, and an office manager.” Therefore is it sufficient to have the above mentioned two people full-time employed, and can the other employees be involved?
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List of annexes attached by applicant: “Signed CVs supporting the professional competences identified in the Board of Directors and the management (duplicate, in Hungarian and English) and reference letters (duplicate, in Hungarian and English)”. Is it necessary to attach reference letters in case of every competence described, or is it sufficient to refer only to some relevant ones?
The relevant experience of the members of the Board of Directors and the management is important regarding the call, therefore only the references supporting the professional competence required in this respect are necessary to be attached.
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The evaluation criterias include the aspect “size of sectoral focus” (II. Business Plan, 5. paragraph) – what is evaluated/scored in this context: focusing or just the opposite?
An incubator focused on one sector or sub-sector can give more help and experience for its incubated entities than an incubator, which is focused on 2 or more sectors. An incubator providing specialized incubation is preferred. Exceptionally and when it is proved, the wider experience may be realistic as well, especially in case of certain synergies.
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Initial problem: The screening of innovative projects – which is the center issue but not the only one in case of incubators – requires serious professional infrastructure and know-how. Because of the small size of the country – and the small number of truly innovative projects – sharing the market between more players may not be beneficial. Few years ago companies with great know-how were operating in our country on a commercial basis, but with no success. Therefore the question is why will be better and more effective the current initiative?
According to our experience and information there are a lot of ideas and start-ups in Hungary, so the market is ready for 3-4 technological incubator. Based on the initial inquiries, there would be more interest for incubators, especially considering the expected specialization of them.
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Does the winner incubator of the ATI title get more support for the screening activity?
The supported activities of the incubators are defined completely in the C.1. paragraph of the Start-up_13 call for proposals. The program does not support other additional activities.
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What do you think about the viability of the model?
The viability of the model is proved by the fact that the participants have interest in the success of the projects because they invest financial and other resources in the projects and expect return on it. Besides, the model is successfully operating in several other countries.
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Is it possible that the already successfully incubated projects will be favored regarding other funding sources in the future?
The 4 subprograms of the Start-up_13 call for proposals cover the entire process from the beginning till the market-entry. So after the program a successful project enters the market as a successful product enabling the return of investments. Therefore it does not require additional aid.
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Will there be special requirements regarding the activities of the incubator on industry or reference or competence basis? (for example can a team having competencies in IT receive a project on a medical field? Does the accreditation title have restrictions in this regard? Is the aim of the initiative to create incubators by industries or is it favored if an incubator has competencies on as many fields as possible?
An incubator focused on one sector or sub-sector can give more help and experience for its incubated entities than an incubator, which is focused on 2 or more sectors. An incubator providing specialized incubation is preferred. If the incubator consists of a team which have competencies for example in IT, than it can provide less professional, relational, market analyzing, etc. help for incubated entities on the medical field (field unrelated to IT). However the accreditation is general and is for long term, so the competencies, the market, etc. might change.
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What is considered as the initial capital of the incubator? (“I declare that the incubator owners and investors guarantee the capital for the technological incubator.”) Is it necessary to prove the availability of the private funds for the planned investments besides the operational expenses at the time of the application?
The size of the available initial capital of the applicant need to be proved by the approved annual report, or in case of its absence by the memorandum or articles of association and the company register, certificate of a bank or custodian. Addition to the information listed in the documents it is not required to submit proof of the size of the initial capital. However, in order to prove the content of the business plan it is recommended to submit all the other available documents and sources, which the applicant refer to in the financial and professional part of the business plan when presenting it for the Selection Committee.
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What kind of declaration is required on the side of the future members of the Board of Directors/management of the incubator? Is the signed CV enough? Is it required to have the members of the management already employed at the time of the application?
Signed CVs support the professional competences identified in the Board of Directors and the management (duplicate, in Hungarian and English) and reference letters (duplicate, in Hungarian and English). Please bear in mind that the relevant experience of the members of the Board of Directors and the management is important regarding the call, therefore only the references supporting the professional competence required in this respect are necessary to be attached.It is not required to have the members of the management already employed at the time of the application. It is sufficient to sign a Memorandum of Understanding by both parties with the clause that if any of the commitments which was scored regarding the conditions of the ATI contest are not satisfied, then the ATI title may be withdrawn and the contract regarding the I. subprogram of the Start-up_13 call for proposals cannot be signed.In most cases all the requirements need to be satisfied at the time the contract is signed. Earlier it would not even be realistic.
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The technical and technological incubation can only be effective if the establishment of its physical and infrastructural background is supported by state-funded call for proposals. The core of the question is if the NIH is planning to develop a single incubator system, which would support both the creation of mere ideas and of operating tools/equipments, material samples and a variety of other prototypes with the help of its database background (SZTNH, HiPavilon, METESZ, TIT, etc.), library-type service, and test workplace background (3D printers, CNC machine tools, electronic labs, chemical labs, etc.).
The aim of the I. subprogram of the Start-up_13 call for proposals is to support the establishment and the beginning of the operation of the technological incubators, who is to create professional, infrastructural, physical and other conditions required for the incubation. The program thus aims that the incubator itself assess the necessary conditions for the incubation of successful projects, and avoid developing a system in which most of the supplied, developed conditions and capacities are unused or not sufficiently utilized.The investments of the incubator make them interested in the projects and their success, and therefore in the effective use of the capacity ensured partly by aid.
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How many incubated entities are required to be accepted from the aid?
The contest does not contain restrictions on this issue. The incubator needs to accept as many incubated entities as appropriate amount of funds and high quality effective project management it can provide for them. As it is specified in the call for proposals, the physical (location) and human (employed and external experts) infrastructure, whether existing or certified with a binding pre-agreement, is able to facilitate the placement of at least 6 start-up companies in a single location. The incubator is advised to calculate with at least 6-8 incubated entities in order to reduce the risk of future return of investments. When assessing the business plan, calculating with a realistic number is the main issue. (Not as many as possible, but enough and high quality ones.)
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The evaluation criterias include the size of the available initial capital (III. Investor-related conditions, 14. paragraph). Is it required to submit a certificate on other available cash upon the company register, which serves as evidence of the available initial capital?
The size of the available initial capital of the applicant need to be proved by the approved annual report, or in case of absence by the memorandum or articles of association and the company register, certificate of a bank or custodian. Addition to the information listed in the documents it is not required to submit proof of the size of the initial capital. However, in order to prove the content of the business plan it is recommended to submit all the other available documents and sources, which the applicant refer to in the financial and professional part of the business plan when presenting it for the Selection Committee.
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The Data Sheet of the Start-up_13 call for proposals is still not available. Given the tight deadline between the evaluation of the ATI title and the deadline for the application for the Start-up_13 call for proposals, the question arises to what extent are the two proposals to be drawn up similar or same, to what extent do they overlap?
The question about the Start-up_13 call is delivered to the NDA/ Fund Manager, and the answer will be available among the Friequently Asked Questions.
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Is it possible to apply for the IV. subprogram of the contest without applying for the III. subprogram?
It is not forbidden, but the applicants require the offer of the incubator for it.
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In order to be able to apply for the II. subprogram is the declaration of an incubator support necessary?
Yes, it is necessary.
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Is it possible to „build upon way around”, so that startups create an incubator for themselves and then they apply for accreditation?
Theoretically it is possible if the project fulfills all the requirements. Please specify this condition in the business plan.
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If an incubated company applies for the III. or the IV. subprogram, is the granted aid charged to the de minimis aid of the incubator?
No, only the support from the I. and the II. subprogram is counted as de minimis aid. The aid from the III. and the IV. subprogram supports the young innovative enterprises.
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Is it possible for the incubator to invest venture capital as part of the required minimum 20% investment in the I. subprogram?
The State Aid Monitoring Office allows funding from the Jeremie Funds, but the incubator is required to ensure it, the intermediary role of the incubator is not enough.
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Is it possible to involve foreign experts in the application process? Is it possible that they are doing the oral presentation?
Yes, if they are in a relevant relationship with the incubator, that is, their role as owners, members of the Board of Directors or of the management is determined in the proposal.
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Is it possible to provide innovation management on an indirect way, by an external contractor as part of the services of the incubator?
Yes. It is not a reason for refusal, but the internal services are favored compared to the contracted ones considering the evaluation of the content.
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Is it possible to apply for being awarded the title of „Accredited Technological Incubator” (Code: ATI-2013) as a public limited company, which is waiting for the decision of the commercial court, the form of which is changing, or which is newly established?
There are no grounds for refusal in case of companies applying for the “accredited Technological Incubator” title, which are waiting for the decision of the commercial court, the forms of which are changing, or which are newly established. There is no given deadline for the establishment or the change of the form of the company (although it is obviously important to happen as soon as possible). Although it is good to know that in worst case, if the application for registration is rejected, the ATI title cannot be awarded by the company. Moreover, applicants must also be aware that companies, which are operating in the form required for being awarded the title already at the time of the application, may have advantages as the members of the Selection Committee may take this issue into consideration when deciding.
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Is it necessary to have the total amount of initial capital (40 million Ft) ready in the company?
The applicant organization just needs to have ready the legally required amount of initial capital for the foundation at the time of the submission of the application. The size of the initial capital may lead to extra scores according to the guide.
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Annexes attached by applicant: “Signed CVs supporting the professional competences identified in the Board of Directors and the management (duplicate, in Hungarian and English) and reference letters (duplicate, in Hungarian and English)”. What needs to be done in case of dissoluted companies?
The reference letters need to be issued by the management on the workplace. In case of dissolution or if the form of the company changed, the reference letter needs to be issued by the former management of the company before the changes or the dissolution took place. If there is no way to get reference letter from the former management in the given organization, the operating successor company can issue the reference letter as well based on the relevant experience, although which needs to be authenticated and verifiable. You can also write down your own experience, if there is no way to ask for reference letter from the management (because of dissolution, etc.), but you need to keep in mind that it needs to be probative and it will be taken into account during assessment.
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Can the applicant incubator organization be owned by one person?
Yes.
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In the I. and II. subprogram of the paragraph C2 of the Start-up_13 call for proposals the “Personnel expenses related to the project” in relation to the eligible costs refers to the paragraph 2.2.1.3. of the Research and Technology Innovation Fund call for proposals and guide.
In the Research and Technology Innovation Fund call for proposals and guide there is no such paragraph, but there is paragraph 2.2.1. in it, which is relevant in content. In this case, measures related to the eligible costs need to be taken in compliance with the information included in paragraph 2.2.1. when planning accelerators financially.
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In what kind of units are the 6 office capacity measured, and how many is required from them?
The office required enables the emplacement and operation of at least 6 start-up companies and also of the management of the incubator. The existence of meeting rooms and public rooms enabling synergies between the incubated companies are firmly preferred.
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What is the right equipped incubator like?
The minimum criteria is the equipment and infrastructure what is expected from a modern office. If you would like to locate startups with special needs as well (yard, laboratory, clean room, etc.), you need to provide solution for them.
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Are there any directives or limitations in content or in form regarding the regulations?
There are not any, but the text of the call and the answers for the questions serve as guide. The point is to be detailed enough and easy to use in format. Please keep in mind the technical constraints regarding the annexes: unfortunately the maximum size of the files is 2 MB.
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How many “self-funded projects” need to be undertaken in order to be appealing? Is the more the better?
The most important aspect is that the capacity given in the business plan of the incubator is commensurate with the numbers of projects. More than 10-12 projects in one incubator is not advised though. It can be calculated from the financial background given in the call for proposals that funding of about 5-6 projects per incubator can be reasonable in the first year. Very few and a lot of projects/ incubated companies may also be problematic.
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How will these commitments be monitored?
Based on the annual reports of the incubator.
Updated: 14 December 2017