Proof of Concept Fund

The so-called Proof of Concept Fund was created by Delft Enterprises to provide funding for feasibility studies on new technical inventions. The fund is one of the instruments by which Delft Enterprises can support (possible) companies at a very early stage.

Delft Enterprises provides a unique convertible loan up to 250.000 euro’s and at a fixed interest rate of 8 percent to entrepreneurs (students, employees) linked to the TU Delft.

The Proof of Concept Fund was created to provide funding for feasibility studies on new technical inventions

Target Group

The Proof of Concept Fund is aimed at starting businesses that have a strong link with the TU Delft and that have a solid business plan with a clear vision. This vision includes the role of the team and an analysis of the relevant market as well as a scalable revenue model.
The Proof of Concept Fund is created to fund early stage startups, in a phase that is often too risky for other investors.

Conditions

Delft Enterprises provides legal entities with an unique convertible loan up to 250.000 euro’s and at a fixed interest rate of 8 percent. The loan is paid in two tranches, the second part of which will be paid after evaluation. Apart from a standard pre-agreed percentage of shares in the event of conversion, the entrepreneur does not need to provide additional guarantees. The company pays interest and repayment, but no ‘success fee’ or other costs which may be related to the loan. The loan is subordinated only if the parties have agreed on this.

Application

Entrepreneurs may submit a request for funding at the investment managers of Delft enterprises, including a description of the enterprise and the link with the TU Delft or the region. This will be followed by a meeting with our investment Committee to further discuss the conditions, team and technology. In the case of mutual interest an investment memorandum will be submitted to the members of the investment Committee and of the Supervisory Board of Delft enterprises. After formal approval the official loan agreement will be drawn up.

When the loan is granted, the entrepreneur will be coached by an investor or experienced entrepreneur to optimally prepare for the next financing phase: venture capital (seed capital).

The agreement between Delft enterprises and the company includes the following points:

> Convertible loan
> Redemption
> Conversion ability and conversion rate
> Evaluation for second installment
> Use of financing for proof of concept
> Observer seat