1. What is the difference between CIP 500 and CIP Catalyst?
CIP 500 differs from CIP Catalyst in four key areas, namely:
- Funding stage: CIP 500 is a seed fund which primarily funds commercialisation, whilst CIP Catalyst is a pre-seed fund that funds the development of prototypes or proof of concept
- Funding amount: CIP 500 offers up to RM500,000 per deal, whilst CIP Catalyst offers up to maximum of RM150,000 per idea
- Target recipients: CIP 500 funds budding companies, whilst CIP Catalyst funds teams of innovative individuals
- Commercialisation support: Both funds offer commercialisation support to recipients such as monitoring, mentoring, market access, product refinement and capacity training. The difference is that CIP 500 offers advanced level support whilst CIP Catalyst offers basic and/or intermediate level support. This difference in levels of support is because the development and commercialisation needs of CIP 500 and CIP Catalyst recipients vary both in its depth and focus.
2. What is the maximum amount of funding that Cradle approves for CIP 500?
The maximum amount of funding approved for CIP 500 grant is up to RM500,000 per application.
3. Why is the fund size capped at RM500,000 per deal?
The amount of the grant fund has been capped at RM500,000 per deal to ensure that CIP 500 does not replace, but merely supplements venture capitals (VCs), the market or the entrepreneur's own personal funding where there is a gap or where the companies are not yet ready to be VC- or market funded.
4. Do we have to pay back the amount received?
Yes. As CIP 500 is a conditional grant, the company will be required to pay back the amount disbursed in the event there is a breach of the CIP 500 Advancement Agreement or it achieves success. In the instance of:
- a Breach of the CIP 500 Advancement Agreement, the company will be required to pay back the amount disbursed inclusive of 4% administrative charges per annum
- Success , the company will be required to pay back 50% of the funding amount inclusive of 4% administrative charges per annum if the company achieves either of the below success trigger points prior to the expiry of the Funding Period (i.e. the maximum period of 36 months from the date the CIP 500 agreement is signed until the expiry of the Monitoring Period):
- The company makes revenue, or secures further investment from third parties of not less than RM2,500,000 only AND makes a profit after tax of at least RM300,000 only, OR
- The Company sells its Business, including its Intellectual Property Rights, for a consideration of not less than RM2,500,000 only
5. Are we required to share any percentage of our IP ownership, equity, or business profit with Cradle?
No. Cradle only provides seed or commercialisation funding and value added services to its recipients. We do NOT secure any percentage of the IP ownership, equity or business profit from our recipients. Hence, everything remains as the recipients' property.
6. Do we have to appoint a Cradle representative as part of the company's Board of Directors?
No, it is not a requirement.
7. Does Cradle help us to set up our company?
No. Applicants are required to set up their own company. Please be reminded that all applications for CIP 500 should be made by a pre-existing incorporated start-up company, and not by individuals who wish to set up a company.
8. What value added services does CIP 500 offer?
CIP 500 recipients will receive the following additional services from Cradle throughout their funding period:
- Development services:
- Business scaling
- Business performance
- Product refinement
- Skills & Entrepreneurial training
- Value added services:
- Market access / Business development
- Funding pipeline access
- Competency building
- Strategic partnerships
9. If we do not apply for CIP 500, can we still enjoy other services provided under the Cradle Investments Programme?
No. Only CIP grant recipients are eligible to enjoy the programme's value added services.
1. Why are only companies allowed to apply for CIP 500?
CIP 500 is a commercialisation fund for budding companies. Hence, it is a requirement.
2. Does our company need to have Bumiputra equity stake to qualify for the CIP 500?
No, it is not a requirement.
3. Can we go to commercial banks to apply for CIP 500?
No. You can only apply online through the Cradle website at www.cradle.com.my.
4. Can we send our CIP 500 application via email or post?
No. All applications have to be submitted online via Cradle's website at www.cradle.com.my. Applications sent in via any other method will not be accepted.
5. What should we keep in mind when filling in our online application for CIP 500?
Applicants are encouraged to provide a clear articulation of their business plan in alignment with Cradle's requirements. Also, please keep your sentences short, simple and relevant. If you are copying and pasting information from an existing business plan or document, please ensure that the inserted text is relevant to the question and addresses the pertinent points.
6. How many times can we submit our application?
A company may submit as many applications as it wishes. However, Cradle will only provide a maximum of two approvals per company. This is because CIP 500 is aimed at funding the company and not the product development of the said company.
7. Can we submit our application in Bahasa Malaysia?
All applications must be submitted in English. If you are unable to write proper English, you are advised to get somebody to assist you as the information provided may be wrongly interpreted and this could affect the approval of your application.
8. Can we apply for CIP 500 while pursuing CIP Catalyst?
Yes. However, if the application for CIP 500 is related to an ongoing project under CIP Catalyst, then you will need to wait for the completion of your prototype and proof of concept before your company can apply for the CIP 500 grant.
9. If we are currently not a CIP Catalyst recipient, can we still apply for CIP 500?
Yes, provided that your company meets all the required criteria.
10. We are currently completing the application for CIP 500. We would like to know if we can attach documents or excel sheets to append to our application as we feel it presents our business proposition a lot more effectively.
Yes, you can.
11. What supporting documentation is required?
You will need to provide the following documents:
- Resumes of key managers
- Pictures and/or graphic architecture, blueprints of products and/or services
- Professional references
- Market studies (if any)
- Pertinent published information (if any)
- Patents (if any)
- Beta customers list (if any)
- Potential pipeline deals (if any)
12. If we have received or are currently receiving funding from other investors or government-related grants, can we still apply for CIP 500?
Yes. However, you will need to inform Cradle of the said investment during the CIP 500 application stage. This is to enable Cradle to regard it as a co-investment project and to avoid double-claiming and overlapping funding.
13. We have already applied for seed funding from reputable venture capital firms, can we still apply for CIP 500 at the same time?
Yes, you can.
1. How long does it take for a CIP 500 application to obtain approval?
The application process and approval of each CIP 500 will take about 90 days, provided that all documentation and information is in order.
2. How will the application be evaluated?
Each application will be evaluated based on the following set of criteria:
- Potential for future funding and revenue growth
- Strength and sustainability of the business model
- Core competency and strength of management team
- Product or Services and technology roadmap
3. Who will have the authority to approve an application?
In Cradle, the Approval Committee has the authority to approve or reject a CIP 500 application. The Approval Committee comprises experts from various domains who have the skills, knowledge and experience in the entrepreneurial landscape.
4. How many interviews are applicants required to attend?
As many interviews as required by Cradle. The interviews are an essential part of the overall evaluation process for it enables Cradle to:
- understand the business further,
- get to know the core management team better, and
- to better assess the market potential of the business
5. I submitted my application two months ago but I have not heard anything from Cradle. What is my CIP 500 application status? Do you send any notification?
Yes, there will be email notifications sent during major stages of the evaluation and approval process. All applications, successful or not, will by default hear from us as part of our Request for Clarification process by our analysts. You are reminded to reply immediately to the Request for Clarification sent by the analysts as this would determine whether your application proceeds to the next stage in the evaluation and approval process. If you delay in replying to the analysts' Request for Clarification, then the evaluation process of your application will also be delayed.
6. How will I know if my application was successful or rejected?
You will receive an email informing you if your application has been successful or rejected.
7. If my application has been rejected, will Cradle inform me of the reasons why it has been rejected?
No. It is our internal policy not to provide any reasons for rejecting an application. However, you may be able to learn the reasons for your application being rejected based on the questions asked by the analysts which would hint and point out the weak points of your business plans, marketing strategies, etc. Nevertheless, as entrepreneurs, the rejection of your application should not discourage you, but rather push you to troubleshoot and improve upon your business plans, marketing strategies, etc.
8. If our application is unsuccessful the first time, can we apply again?
If your application is unsuccessful in any stage, you will have the option to reapply. However, you are NOT allowed to apply for the exact same product and/or service twice.
9. If I apply for CIP 500, how many agreements do I have to sign with Cradle?
You are only required to sign one (1) agreement with Cradle.
Disbursement and Deliverables
1. How are the funds disbursed?
The funds will be disbursed based on the following conditions:
- Direct Payment - Payment to be made directly for delivery of goods and/or services render by the 3rd party. Salary is also paid directly to a company (recipient). All the request for direct payment shall be supported with valid supporting documents and submit to Cradle.
- Forward Funding - It is an exercise from fund allocation to cover the CAPEX and/or OPEX to be provided at the beginning of funding period. The approved recipient will eligible to receive forward funding of two (2) months. Disbursement will only be made to the recipient upon satisfying review on the needs for acquiring CAPEX and/or OPEX for that particular milestone period. However, the disbursement mode may vary depending on the performance of recipient in meeting obligations to achieve the desired deliverables and milestone. The recipient shall submit a written request for such disbursement and subsequently provide the relevant supporting documents to Cradle once the payment is affected.
- Reimbursement - The material level for reimbursable expenses is capped at 1% of total proposed funding. Any claimable amount above 1% will be paid as "direct payment" to 3rd party and/or recipient. However, the recipient may opt to adopt full reimbursement mode if the recipient has sufficient cash balance or require urgent acquisition or purchase of assets/expenses. All the reimbursement claims must be supported with valid and relevant supporting documents.
2. Do CIP 500 grant recipients have to use our own money in advance while waiting to be reimbursed?
Yes. As Cradle only provides 85% of the total project cost (up to RM500,000 per deal), recipients are also required to bear the remaining 15% of the total project cost. This is to ensure all CIP 500 recipients remain committed to their projects.
3. Would we get additional funding if the original amount disbursed to us does not fully cover our implementation costs?
No. CIP 500 only funds 85% of the total project cost, which is up to a maximum of RM500,000 per deal. Recipients are expected to source for the remaining 15% of the cost from venture capitals (VCs), the market or their own personal funds.
4. Can we be reimbursed on the same item from two different funding sources?
No, you cannot as Cradle does not allow double claiming.
5. What happens if the company ceases operations, or is liquidated or winds up halfway?
If the company decides to cease operations, or is liquidated or wound up at any point during the funding period and fails to provide a valid justification for doing so, it will still be liable to pay back the amount disbursed together with 4% administrative fee per annum. In such instances, Cradle will apply to the Insolvency Office to be regarded as a Creditor to the company and shall have all rights under the laws to claim the grant disbursed.
6. Who will be liable if there is a breach of agreement?
If there is a breach of agreement during the funding period, the company and the directors of the company will be jointly and severally liable.
7. Who sets the deliverables?
Deliverables will be jointly set between Cradle and recipients before the signing of the CIP 500 Advancement Agreement, based on the needs of the business.
8. We cannot deliver the items requested by this milestone. What can we do?
All deliverables mutually agreed upon must be met. However, in the event a company fails to deliver, then the company and its board of directors will be held responsible, and the company will be required to repay the amount disbursed inclusive of 4% administrative fee per annum.
9. Can we extend the timeline for our project which we have been approved for?
Grant recipients are not encouraged to extend the timeline for their projects which they have been approved for. However, if you think that the company is unable to deliver the items within the 12-month period, you may contact your Investment Manager and negotiate with Cradle for revised terms and conditions to ensure that your company will be able to deliver the items requested. The extension of project timelines is only taken under consideration on a case-to-case basis and the power of discretion lies with Cradle.
10. Can we change the milestone deliverables during the implementation stage?
You are not encouraged to change the milestone deliverables during the implementation stage. However, if you think that the company is unable to deliver the items requested by a particular milestone as initially agreed upon, you can contact your Investment Manager and negotiate with Cradle for revised terms and conditions to ensure that you will be able to deliver the items requested. The change of deliverables in a milestone is only taken under consideration on a case-to-case basis and the power of discretion lies with Cradle.