A new section regulating financing through the Fund of Funds has been added to the Regulation on the Activity of the Fund for Entrepreneurship and Economic Growth of Moldova (FACEM). The amendments were published on September 26 this year and are effective from the date of publication.
The Organization for Development of Entrepreneurship (ODA), which will administer the Fund of Funds, must bring its internal documents in line with the approved regulation within 60 days.
Recall, ODA will allocate financial guarantees to investment partners who mobilize resources and channel them to beneficiary enterprises. At the same time, they are obliged to observe the rule of minimum financial multiplier: for every leu received from the state, attract at least 3 lei of private capital.
The new provisions set the conditions of attracting the fund’s resources for investors, both foreign and local. First of all, they must have experience in managing investment funds (at least 5 years). At the same time, they are not allowed to invest in enterprises where persons in management positions or related to them hold shares/shareholdings. The maximum period for mobilizing financial resources is 18 months from the date of signing the agreement with ODA.
The investment partner for financing from the Fund of Funds is selected through an open call organized by ODA. At the same time, it independently organizes the selection and evaluation of beneficiary enterprises.
The authorities believe that the launch of the new instrument will help attract fund managers and investors specializing in supporting innovative startups at early stages of development. The need for its launch was necessitated by the lack of local investment funds and the limited interest of regional and international funds in investing in technology startups and SMEs with growth potential.
