Shanghai released its Several Measures on Financial Support for Talent Innovation and Entrepreneurship (hereby referred to as "Measures") on Sept 20, introducing 22 initiatives to provide financial services for various types of talent engaged in innovation and entrepreneurship in the city.

The Measures encourage municipal State-owned capital funds to increase support for talent enterprises in their seed and early stages and explore the establishment of the "Shanghai Talent+" Innovation and Entrepreneurship Fund.

In addition, talent teams involved in innovation, entrepreneurship, and scientific and technological achievements commercialization in Shanghai will be selectively supported through equity investment.

The Measures cover a wide range of financial elements, including capital investment, bank credit, policy guarantees, and insurance support. The support spans the entire lifecycle of talent innovation and entrepreneurship, from incubation, angel investment, venture capital, and guiding fund equity investment, to listing, loans, and guarantees.

The Measures also encompass both direct and indirect financial support, including loans, insurance, investment listings, financial subsidies, and fiscal monetary policy tools, as well as credit risk compensation measures, aiming to enable financial institutions to support talent enterprises more precisely and robustly.

The Measures embody a "people-centered" approach. For early-stage entrepreneurship, the city will provide non-profit financial assistance to support talent start-ups, including pilot programs for direct small grants, with credit guarantees of up to 5 million yuan ($710,000). For the growth phase of start-ups, there will be an increase in credit loan amounts.

The Measures introduce specific actions related to talent investment, loans, guarantees, and insurance.

Talent investment

Talent investment is focused on a variety of capital sources, including government-guided funds, State-owned capital funds, venture capital funds, and entrepreneurship investment funds, as well as platforms like equity trading markets, which will increase financial support for enterprises. For instance, it highlights leveraging the 100-billion-yuan industrial investment parent fund to accelerate the establishment of the 10-billion-yuan Shanghai Future Industries Fund.

The Measures also note that for talent enterprises that have successfully attracted venture capital investment, the government-guided funds can follow up with investments based on the fund agreement's specified strategy.

Shanghai will also expand the scale of the angel fund by relaxing application requirements and extending coverage, while improving mechanisms for follow-up investments, services and exits.

Furthermore, the Measures stipulate that venture capital and entrepreneurial investment funds registered in the equity investment aggregation zones may receive a maximum reward of 10 percent of the actual investment amount if they initiate the first equity investment in seed and early-stage talent enterprises and maintain the investment for 24 months. The maximum subsidy for a single investment project is 1 million yuan, and each fund management institution can receive up to 5 million yuan annually.

Talent loans

Banks are encouraged to introduce Talent Cards that offer up to 1 million yuan in personal credit loans for individuals recognized by talent departments at the municipal and district levels, with flexible repayment options, waived fees, and private banking services.

Some commercial banks are also being encouraged to pilot employee stock ownership plans and equity incentive loans for technology enterprises. Additionally, in mergers and acquisitions involving qualified talent enterprises, commercial banks are encouraged to explore a combination of merger loans and equity investments to facilitate the process effectively.

Talent guarantees

The Measures focus on enhancing the policy guarantee efforts and funding levels provided by Shanghai's financing guarantee institutions. For instance, a special guarantee product is introduced to support talent innovation and entrepreneurship, offering credit guarantees of up to 5 million yuan for eligible talent enterprises.

Talent insurance

The Measures also address the need to innovate insurance products to support talent enterprises and improve insurance services for talent. For example, Shanghai plans to expand the pilot program for science and technology enterprises entrepreneurship liability insurance to increase coverage for talent entrepreneurship teams.

Source: jrj.sh.gov.cn