What is meant by technological innovation?
Technological innovation is the development and successful placement into widespread use of new and improved products, services and processes from all fields of science and technology.
What is a start-up, and what a spin-off company?
The term start-up company is generally associated with a newly founded company. A spin-off is a company that was founded inside a parent company and subsequently it has separated into an independent company.
What is meant by micro and small companies?
Micro and small companies are defined in accordance with the EU definition for SMEs: European commission – 2003/361/EC, definition of the EU for SMEs companies:
Eligibility – who can apply?
Can an entrepreneur apply for the Mini Grants Program?
The Applicant for the Mini Grants Program must be a legal business entity in accordance with the Serbian Company Law of 2011 (“Official Gazette” no 36/2011 and 99/2011), which stipulates four (4) types of companies: general partnership, limited partnership, limited liability company and joint stock company. Thus, if a company is founded as one of the above mentioned four types, it is eligible to apply for the Mini Grants Program. Therefore, individuals who are registered as entrepreneurs do not fulfill eligibility requirements.
Can a person be an owner of more than one company that has applied for funds from the Mini Grants Program?
Yes, they can. The only relevant issue is for the company that has applied for the Mini Grants Program is to fulfill all the conditions as stipulated in the Eligibility section 1.5 of the Mini Grants Manual.
What are the ownership limitations of the company that is applying to the Mini Grants Program?
The Company has to have a majority private Serbian ownership. The Company cannot be in majority ownership of a parent or holding company that has: (1) raised/received EUR 500,000 or more in total financing (equity, debt, grant or combination thereof) from public or private sources, or (2) has revenue, or is part of the group that had revenue over EUR 2,500,000 in any of the prior years.
Is it possible for the ownership of the Company that is applying for the Mini Grants Program to be mixed – both private and state owned (e.g. co-owner is a University or a City) and in such a case who has to have majority ownership?
It is sufficient for the Company to be in majority private Serbian ownership. This means that a minimum of 51% of the Company’s equity has to be in private Serbian ownership for it to be eligible for the Mini Grants Program. If the above condition is met, the owner of the minority part can be a University, a City and such.
Are the founders, either as individuals or legal business entities allowed to participate in the project in an advisory role for R&D, partner/subcontractor (office space and operational support), or does this qualify as a conflict of interest?
Founders are allowed to participate on projects as subcontractors, R&D advisors/consultants operational support, etc. as long as there is no conflict of interest based on the following documents:
- Confidentiality Policy and Prevention of Conflict of Interest Policy of the Innovation Fund
- World Bank’s “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated January 2011 (Anti-Corruption Guidelines)
- World Bank’s “Guidelines: Selection and Employment of Consultants under IBRD Loans and IDA Credits & Grants by World Bank Borrowers”, dated January 2011 (Consultant Guidelines)
- World Bank’s “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits & Grants by World Bank Borrowers”, dated January 2011 (Procurement Guidelines)
and there is unquestionable arm’s length in that transaction (for legal entities). Arm’s length means that the two entities must be financially and operationally independent from each other and that all the proposed transactions between them are fair transactions (made with respect to commercial practice and market conditions).
Note: This answer does not imply any liability towards the Innovation Fund in any of the phases of program realization, nor during the undertaking of any action by the Innovation Fund within the Innovation Serbia Project.
Is it possible for a foreign company’s branch to apply for the Mini Grant Program?
No, a foreign company’s branch cannot apply, since the branch is not a legal entity and in the organizational and functional terms, a branch depends on the company to which it belongs. The same ineligibility exists for subsidiaries and affiliated companies of foreign companies, and representative offices of foreign companies, or any other form which is not independent, majority owned Serbian company.
Does the financing limit of EUR 500,000 raised by a company, which makes it ineligible for the Mini Grant Program, relate solely to financial funds?
The Applicant is not eligible for the Mini Grants Program if the company raised EUR 500,000 or more from different public or private financing sources (equity, debt or grant). Yes, it pertains only to the financial funds.
What is the criterion that has to be met concerning the time frame for founding/incorporating a company?
The Applicant’s Company needs to be incorporated for no longer than two (2) years at the time of applying to the Mini Grants Program.
Can a company that is in majority ownership of another company (founded in Serbia), that is controlled by a foreign entity or person apply for the Mini Grants program?
Company with such structure is not eligible to apply for the Mini Grants program.
What is the application process by a company for the Mini Grants Program?
In order to apply for the Mini Grants Program, a company has to register on the website of the Innovation Fund, and to fill out the Company registration request application form which includes basic data about the company (among others: tax ID, legal type, company headquarters and contact person info). The application documents must be submitted before the application submission deadline. It is the Applicant’s responsibility to ensure the timely submission of the information/documents.
Is it necessary to submit with the application, a certificate from the tax authorities which confirms that all taxes, contributions and other charges have been paid in the current year, in accordance with the national rules, if the company has just been founded?
Yes, that is one of the documents that are required in the application, regardless of when the Company was founded.
Is it possible to apply more than one project or innovative technology by the same Company?
The Company that is applying for the Mini Grants Program can apply only one project proposal. If the Company is awarded funds for the proposed project, the awarded funds must be used exclusively for the applied project, without the possibility of using the funds for other purposes or other projects.
Within the Application, there is necessary documentation concerning “Certificate from the competent authority that there are no legal proceedings against the Applicant” as well as “Certificates from the Commercial and Magistrates court that the Applicant has not been banned, permanently and temporarily, from running its business operations”. What are the appropriate institutions from which to obtain the abovementioned certificates?
The following Certificates are required as part of the Mini Grants Program Application process (the Fund reserves the right to request additional certificates, if necessary):
1) Certificate issued by Serbian Business Registers Agency (SBRA) that there are no liquidation or bankruptcy cases against the Applicant;
2) Certificate from the Commercial court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operatio3) Certificate from the Magistrates court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations;
3) Certificate from the Magistrates court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations;
Is it possible to provide documentation in hard copy after the project submission deadline has expired?
Documentation in hard copy can arrive at the Fund’s address after the deadline, but the mail parcel has to be clearly postmarked before the submission deadline.
Can the following hard copy certificates in be sent out subsequently, i.e. can they be delivered after other Application documentation has been sent to the Fund?
No documents can be subsequently provided after the final application deadline including the following certificates:
- Business Registration Form issued by Serbian Business Registers Agency (SBRA), not older than six (6) months at the time of submission of the Application
- Certificate issued by Serbian Business Registers Agency (SBRA) that there are no liquidation or bankruptcy cases against the Applicant
- Certificate from the Commercial court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations
- Certificate from the Magistrates court indicating that the Applicant has not been banned, permanently and temporarily, from running its business operations
- Certificate issued by the competent tax authority to have all due taxes, contributions and other levies paid for current year in conformity with national regulations
Is the number of slides and file size (in MB) limited for the PowerPoint document “Company and Project Presentation”?
The document “Company and Project Presentation” is to be downloaded from the Fund’s official website and its maximum size and number of slides is predefined. It is not possible to provide a different format of the presentation besides the one found on the Fund’s official website.
What can be considered an eligible expense under the “Offices and business support” category? Can utilities be listed in this category?
Some of the items that fall under eligible expenses in the category “Offices and business support” are office/workshop space renting, internet and telephone bills, electricity and heating (utilities in general), office supplies and stationery, accountant/legal fees, etc.
Can an already uploaded document on the Portal be changed until the end of the submission deadline, i.e. can new/improved versions of an already uploaded document be subsequently provided?
A document that has already been uploaded can be freely changed before the submission deadline. When the Applicant has uploaded the final version of all the required documents for the Application, they have to hit the “Submit” button in order for the Application to be sent and be valid.
Financing and co-financing
Do the funds received from the Mini Grants Program have to be repaid (are the funds free)?
The funds received from the Mini Grants Program are non-repayable; funds do not have to be repaid.
At which point does the company have to secure the 15% minimum of funds and for which activities can the funds be used?
At least 15% of the funds have to be secured by the Applicant, by means of own resources in cash contribution, existing or potential private equity or venture capital sources, private sector debt financing and other private sector cash contributions (other sources may be taken into consideration). The Applicant’s co-financing must be absolutely independent from the Fund. Since the disbursement for the project is made quarterly, it is not necessary to be in possession of the co-financing funds at the time of the application. However, it is required to provide evidence that the funds will be secured for the purpose of the project upon its start. Eligible and ineligible expenses for which total funds can be used are defined in section 1.7 and 1.8 of the Mini Grants Program manual.
At what time will the Company be notified that it has received financing?
Taking into consideration that the final decision pertaining to financing under the Mini Grants program is made by the independent Investment Committee based on: a complete and eligible application, peer-reviewer results and on-site visits results the process itself takes time. After the Application submission deadline it takes approximately 10 weeks for the Company which is selected for financing to be notified.
Does the Company which does not get approved for financing have the right to apply again?
Yes, the Company that is denied financing has the right to apply again.
Does the Company which has been approved for financing have to open a dedicated account in a bank, or can it continue using its existing account?
It is necessary for the Mini Grants Awardees to open a special, dedicated account during the application phase, or in the moment of signing the Financing Agreement.
What type of co-financing is the most adequate based on the criteria of the Mini Grants Program?
At least 15% of the funds have to be secured by the Applicant, by means of own resources in cash contribution, existing or potential private equity or venture capital sources, private sector debt financing and other private sector cash contributions (other sources may be taken into consideration). Co-financing proof is a required part of the documentation which is submitted as part of the application. Relevant documentation must be submitted which proves co-financing, including investment contract, debt agreement, company cash contribution and similar proofs of funds existing which the applicant needs to secure. It is up to the Applicant to decide on what type of own funds he/she will use.
When and how will the funds be disbursed to the Awardee?
The funds for the Project will be paid to the Awardee’s dedicated bank account on quarterly basis, specifically at the beginning of every quarter for the current quarter. Before the Fund disburses payment (which covers up to 85% of the quarterly Approved Project Budget), the Awardee is obligated to submit to the Fund: the bank’s dedicated account statement showing the Awardee’s co-financing payment (minimum of 15% of the quarterly Approved Project Budget) for the particular quarter, as well as quarterly Progress Report and quarterly Financial Report, along with other required Project-related documentation. Upon review and approval of the reports by the Fund and positive outcome of the monitoring visit (when applicable) the project financing for the next quarter will be disbursed.
Does the 15% co-financing refer to the amount which is obtained when EUR 8,000 for mandatory training is deducted from the total Project Budget?
The total Project Budget includes the EUR 8,000 appropriated for the mandatory training. The Applicant is obligated to participate in the co-financing with at least 15% of the total Project Budget for the Mini Grants Program.
To what extent is it important to follow the suggested budget structure?
In the Mini Grants manual there is a section that recommends an organization of expenses, but it is up to the Applicant to decide how they will organize the expenses of the Project, in accordance with the Project needs and its implementation.
How should the Applicant who is securing co-financing from own resources in cash contribution provide proof of such co-financing?
It is up to the Applicant to decide with which documentation they will prove co-financing from own resources in cash contribution (e.g. Bank account statement, bank certificate, Statement that own resources in cash contribution will be used for co-financing signed by an authorized person of the Applicant).
What happens in case of ineligible expenses?
In case of ineligible expenses (based on the criteria listed in the Mini Grants Manual, but not limited to those instances), the Innovation Fund has the right to deduct the amount treated as “ineligible expenses” from its next quarterly disbursement, but also to demand the Awardee to pay back all or any part of the amount of the financing disbursed in the quarter, in the event that the Awardee fails to perform any of its obligations under the Financing Agreement.
Also, is it possible to transfer unspent funds from one quarter to the next?
Unspent funds from one quarter can be transferred and spent in the next one, but drastic under-spending compared to the Approved Project Budget may raise the issue of the Project’s progress, adequacy of the budget and development activities.
How is the training organized for the Awardees and what fields will the training include?
The mandatory training of Awardees is previously approved by the Fund, based on input from Awardees and the Fund’s consultants. Training expenses of EUR 8,000 are paid from the Approved Project Budget and are intended to be used for the training the Company’s key personnel on issues facing entrepreneurs in early stage technology development and commercialization. Awardees will be asked to propose the specific training topics which are suitable for their businesses. Training cost, such as travel, tuition, fees, subsidence and other training-related costs will be paid from the Approved Project Budget.
Are there any specific requirements in regards to the number of employees and their qualification?
At least one of the Applicant’s employees (full-time) should have BSc, MSc or PhD degree in science or engineering. At least one of the Applicant’s employees (part-time or full-time) should have BA, MA or PhD degree in economy, business or management or similar.
Is it necessary to hire the Project employees in advance or is it enough to make some type of conditional agreement which specifies that the mentioned employees will be hired upon financing approval?
Key proposed personnel are not necessary to be hired in advance or during the Application submission process. At the time of the Application submission it is required to provide short biographies of the key personnel that will be working on the Project. Prior to the signing of the Financing Agreement, the Awardee is required to submit employment contracts.
At what time do the employee contracts need to be finalized with the Project employees?
Employee contracts need to be submitted before the Financing Agreement signing.
Intellectual Property (IP)
Is the patent registration required, or more precisely does the technology have to have patent potential or is it sufficient that there is a possibility of commercialization?
The Applicant is required to show proof of IP and know-how rights, including but not limited to licensing agreements, in-kind contribution agreements, options or commitments, if any, and other agreements confirming that the Applicant owns or has rights to the technology being developed and the finished product or service. Patent registration at the time of Application submission is not a requirement, however a criteria of Project evaluation is potential for creating new intellectual property. The “Review Guidelines” document describes the evaluation process in greater detail
Is it necessary to transfer copyright ownership on software specifications or is it enough to receive right of use?
The Applicant is required to show proof of IP and know-how rights, including but not limited to licensing agreements, in-kind contribution agreements, options or commitments, if any, and other agreements confirming that the Applicant owns or has rights to the technology being developed and the finished product or service. Thus, it is not required for the copyrights to be in the Applicant’s ownership, but an agreement (e.g. licensing agreement) on the right to the technology / product or service is required. All new intellectual property and know-how, which may be created during the Project implementation, must belong to the Applicant. It is the Applicant’s obligation to secure intellectual property rights and know-how for contracts with third-parties.
What is the acceptable proof of Intellectual Property (IP) which needs to be submitted as part of the Application, in case the Company develops its own software product?
Taking into consideration the specific nature of the software product, it is up to the Applicant to decide what documentation they will optimally prove IP rights, (e.g. Statement of IP rights belonging to the Applicant signed by the authorized representative of Applicant).
Who evaluates the Company’s Project Proposal and makes the financing decision?
Technical aspects of the Project Proposals are initially reviewed by the independent international peer-reviewers. Based on the results of the peer–review, the complete Application, and results of the on-site visits (of the pre-selected Applications) the independent Investment Committee makes the final decision for financing under the Mini Grants Program.
What is exactly meant by a peer-review?
The pre-evaluation of the Application for the Mini Grants Program includes a technical peer-review by the independent international reviewers based on each evaluation criteria category. The “Review Guidelines” document describes the evaluation process in greater detail
What are the steps in the evaluation process of the Project Proposals?
1) After the Application is submitted, the Innovation Fund’s Program Managers will do a desk review of the eligibility and completeness of the submitted Application, including initial screening of the submitted documents.
2) The pre-evaluation of the Applications includes a technical peer-review by independent international reviewers.
3) Based on the results of peer–review and the complete Application, the independent Investment Committee pre-selects Applications for further consideration for financing.
4) The pre-selected Applicants will be visited by the Innovation Fund’s Program Managers to meet with the Applicant companies’ management and executives.
5) Upon completion and taking into consideration results from all of the above mentioned steps, the independent Investment Committee makes the final decision pertaining to financing under the Mini Grants Program.
At what part of the evaluation process is the company informed that it did not receive financing?
Applicants may be rejected for financing based on several grounds, in different phases of the evaluation process:
1) Eligibility review – Applicants which are not eligible to apply for the Mini Grants Program, as well as incomplete Applications will not be considered for further evaluation. Ineligible Applicants will be contacted after the conclusion of this phase.
2) Pre-evaluation of Applications – Applications are initially peer-reviewed by the independent international reviewers, followed by a review and pre-selection of Applicants by the independent Investment Committee. Pre-selected Applicants are notified of the decision at this time.
3) Financing decision – After the completion of the evaluation process, the final decision for financing is made by the Investment Committee. The Applicants which do not receive financing are notified at this time
Will the Applicant which does not receive financing under the Mini Grants Program, receive some advice or recommendation from the Innovation Fund on how to improve their project in the future?
Yes, both the Peer-Reviewers and the independent Investment Committee will provide comments on the submitted Project Proposals. These comments and recommendations are aimed at helping the Applicant improve their Project Proposal. Following the independent Investment Committee’s final decision for financing under the Mini Grants Program, all eligible Applicants that were not selected for financing will receive the above mentioned comments.
How will the Innovation Fund protect Applicants from any misuses of the company’s project ideas by the personnel included in the evaluation?
All peer-reviewers, independent experts, members of the independent Investment Committee and the employees of the Innovation Fund have signed and accepted all the terms of the Confidentiality Policy and Prevention of Conflict of Interest Policy.
What is the basis of the Environmental Screening Questionnaire review and when are the review results announced to the Applicants?
All Applicants are required to submit a completed Environmental Screening Questionnaire (ESQ) as part of the Application for the Mini Grants Program. An independent environmental expert engaged by the Innovation Fund is responsible for the assessment and evaluation of the ESQ. Environmental assessment procedure is described in detail in the Environmental Management Framework (EMF).
Evaluated activities of the Project Proposal are classified in accordance with the following three screening categories:
1) Category I – Project related activities which are not expected to have an effect on the environment. Activities that fall into this category are not subject to further environmental impact assessment.
2) Category II – Project related activities which do have an impact on the environment. Environmental Management Plan (EMP) will be needed to be done.
3) Category III – Not suitable for financing.
Only pre-selected Applicants will be notified about the results of the ESQ if their Project related activities are deemed to fall under Category II and an EMP will be needed.
In the Environmental Management Framework (EMF), under the section of EXCLUSIONS, that states which kind of projects will not be financed, the last bullet states: “Any construction and rehabilitation activities, including very small, refurbishment or renovation activities or any scope of civil works”. Are potential Applications from the field of construction – new materials which, among other, includes construction of a prototype, contrary to the EMF regulations?
Construction of a prototype in order to test new construction material(s) or innovation in the construction sector is acceptable as long as it is experimental, and is not a construction as defined in the EMF, provided that this prototype is located on the Applicant’s property (no change of land use or additional land purchase). Standard Environmental Management Framework (EMF) screening procedures and supervision will be implemented.