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ITRI, Taiwan Business Bank, and Credit Guarantee Fund Create Bridge Between Capital and Technology Markets

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ITRI, Taiwan Business Bank, and Credit Guarantee Fund Create Bridge Between Capital and Technology Markets

Inauguration of Taiwan's First Intangible Asset-financing Mechanism

Taiwan Business Bank Chairman Bor-Yi Huang (left), Vice Minister of MOEA Chuan-Neng Lin (center), ITRI President Edwin Liu (right) at the "Turning Innovative IP into Capital" seminar hosted by ITRI.
Taiwan Business Bank Chairman Bor-Yi Huang (left), Vice Minister of MOEA Chuan-Neng Lin (center), ITRI President Edwin Liu (right) at the "Turning Innovative IP into Capital" seminar hosted by ITRI.

The "Turning Innovative IP into Capital" seminar was held on August 27th. The event, organized by ITRI, Taiwan Business Bank, and the Small & Medium Enterprise Credit Guarantee Fund of Taiwan, focused on creating a bridge between the capital and technology markets, and utilizing intangible asset assessment as the basis via which to extend preferential financing. Under this mechanism, financial institutions will look at technology patents, capital financing, and credit guarantees as factors to offer financing to entrepreneurs, helping them achieve their dreams. ATOM Health Corp., Trust Bio-sonics, and Yi-Hong Electronic are Taiwan's first three firms to obtain patent-based financing. The three firms have received a total of NT$25 million in preferential financing, upending the traditional model in which startups must rely on credit-based loans. In the future, as long as an audit shows a company to be financially sound and a patent evaluation points to potential for development and market value, the enterprise will be able to obtain financing.

 

Dr. Chuan-Neng Lin, Vice Minister of the Ministry of Economic Affairs, who pushed for the legislation paving the way for the valuation of intangible assets and financing mechanism, attended the seminar. Dr. Lin welcomed the strong support provided by the Taiwan Business Bank and the SME Credit Guarantee Fund, along with ITRI's expertise in intellectual property, enabling the parties to create a bridge between the technology and banking markets, and thereby implementing a policy that underpins innovation and creates a virtuous cycle in industrial innovation. With this new model, domestic SMEs will have a new financing channel. This will create fantastic new high-value enterprises, and enable intangible assets such as creativity and invention, to become an important driving force in promoting Taiwan's economic development, he said.

 

    SME Credit Guarantee Fund Chairman Y.K. Lee remarked that this is the first example of patent financing in Taiwan. The Credit Guarantee Fund, he said, plays the role of providing credit guarantees to firms that are unable to provide sufficient corporate guarantees. Banks, trustworthy valuation organizations, and the Credit Guarantee Fund cooperate to address the past problem of insufficient credibility in the evaluation of intangible assets and weak collateral. Consequently, this constitutes an important milestone in patent-based financing, he stated.

 

    

ITRI President Edwin Liu, who worked at high-tech firms in the Silicon Valley for many years, noticed the vibrant development of startups there, with the reason largely due to the injection to financing and the importance placed on the valuation of intangible assets. Dr. Liu commented that for an entrepreneur starting from scratch, capital sources in the early stage are extremely important. A major problem facing startups is that they are unable to acquire loans. ITRI, Taiwan Business Bank, and the Credit Guarantee Fund collaborated to address this issue, he said. "As I often say, the short-term market could be thought of as a beauty pageant, while the long-term market is all about weightlifting. Today, we've helped these three startups reach the beauty pageant stage. Going forward, they are moving into the international market and begin lifting weights," Dr. Liu said, adding that ITRI is bullish on the patented technologies of these startups and is confident that they will succeed in the future.