In Person With Founder of Techno-preneurs Association of Malaysia (TeAM)

In July 2001, a team of budding entrepreneurs in Malaysian banded together under the banner of the Techno-preneurs teamAssociation of Malaysia (TeAM) led by an inspired young man named Nazrin Hassan. Their aim — To find a solution for many promising young entrepreneurs that have brilliant ideas but cannot see them through into commercialization due to a lack of funding. The alternative then was venture capital seed funding which offered cash but tied these entrepreneurs down, with many conditions that were not favorable to their business plans.

What the TeAM members knew then was, without real support and financial assistance; many promising techno-preneurs would not be able to develop their ideas sufficiently to reach commercialization. Without the generation of new technology ideas, Malaysia’s drive towards the New Economy and high-technology space was bound to stagnate due to the lack of access to funding in the marketplace, despite a strong push for the development of local talent to spearhead the growth of the Multimedia Super Corridor (MSC) project by then Prime Minister, Tun Dr. Mahathir Mohamad.

After two years of intensive lobbying, the Development Funding idea was presented to Tun Dr Mahathir at the Budget Dialogue 2004 in May 2003. As a result of this, the Ministry of Finance allocated RM100 million for a programme, now famously known as Cradle Investment Program (CIP), to implement pre-seed funding to techno-preneurs under the national stimulus package in May 2003. Tun Dr Mahathir Mohamad officially launched CIP on 18th July 2003, where Malaysia Venture Capital Management Berhad (MAVCAP) managed it. Cradle Fund Sdn Bhd (Cradle) took over the management of CIP beginning 17 July 2007.

Guiding Malaysia’s Future Entrepreneurs

For a program that had started less than 7 years ago, Cradle has achieved tremendous success. To date, the company has funded 372 ideas under the CIP programme. A total of RM30million has been disbursed to fund these ideas.

Fortunately, for Nazrin Hassan and his entire team, the fruits of their labor have certainly been quite sweet. In his current position as CEO of Cradle, he admits that these budding entrepreneurs would need to be responsible to get their ideas into the next stage of

Nazrin Hassan

Nazrin Hassan

development and eventual commercialization with the leg up from the CIP. -“At the end of the day, there should be some commercialization behind it. We found that if we provided the eco-system and the mentoring, it would help them raise their next round of funding, secure their first round of contracts or allow them to sell or license their IP’s”, adds Nazrin.

The method has since worked. The commercialization rate for CIP is at 48%, which is the highest in the country. Although the CIP started with funds of just RM50, 000 per tranche per idea, it can now go up to as much as three times that figure for innovative technology ideas with good commercialization potential, submitted by aspiring groups of techno-preneurs.

Today Cradle has ventures with several parties to exemplify talents in various areas. One such arrangement is the Celcom League of Extraordinary Developers Challenge (LEDC) – an arrangement made originally between Celcom, Cradle and Microsoft, which aims to put forward talents within the mobile content development industry in Malaysia.

“With this league, there is this mechanism called the conveyor belt where Celcom guides prospective applicants at Cradle on what are the hot areas that they can develop their applications, Cradle funds those applications and at the end of the day Celcom helps them commercialize their applications on its platforms”, Nazrin explains.

Besides this, Cradle has ventures with other companies such as Nokia and Creative Advances Technology Sdn Bhd (CAT), among others.

The venture with Nokia is provides support to techno-preneurs and developers in the mobile services and applications space in Malaysia through an open developer ecosystem where Cradle provides the funds. Nokia on its part provides development and go-to-market support to help developers complete and deploy their mobile content and applications through its Ovi Store, through the Forum Nokia organization.

The CAT venture is a collaboration based on CAT’s Standard Online Tourism Architecture (SOTA), a consolidated tourism e-business platform that unites government agencies, various sectors of the travel industry, and consumers. Cradle’s participation here is via screening through the applications and providing the funds, while CAT will provide the SOTA platform on which techno-preneurs can build upon.

The Next Stage Beckons
By the time you read this article, Cradle would have launched its next stage of its funding strategy, or “seed funding”. This stage applies for those who have done their prototype, done their proof of concept and wish to bring their concepts to the market place. It is essentially the stage dominated by Venture Capital (VC) companies.msc-malaysia

However, many VC’s in Malaysia are unwilling to take the risk of funding ventures without a business track potential. Because of this failure in the chain, it has severely stunted the growth and development of new technology start¬ups in Malaysia, as well as faith in VC’s.

“Cradle’s offering is different from the rest in that we do not ask for equity or seats on the board of a company, in return for the funding”, says Nazrin.

However, Nazrin admits that, the challenge is not just about funding, but to ensure that these techno-preneurs have with them the right talent to take on the management of their start-ups and eventually lead it towards becoming a full-fledged business entity.

“What we want to do at Cradle is not just about funding, but it is about catalyzing sustainable techno-preneurs. They need to be trained to know enough about their environment, their ability to develop their business and find and generate suitable business ventures, as well as manage their business well beyond the initial three year period”, adds Nazrin.