In Taiwan, the venture capital scene has reached a significant milestone, marking its 40th year of development. Despite Taiwan's impressive track record in the technology sector, recent government measures have raised concerns among industry insiders.
Comparatively, neighboring countries like Singapore and Japan have surged ahead in their support for startup ventures, leaving Taiwan falling behind. The Taiwan Venture Capital Association (TVCA) has sounded the alarm, warning of potential repercussions on the nation's future startup and venture capital landscape over the next decade or two.
TVCA Chairman, Andy T.C. Chiu, highlights the leadership role played by institutions such as Temasek Holdings and Singapore's Government Investment Corporation (GIC) in the Asia-Pacific region. Meanwhile, Japan has taken decisive steps by establishing a director-general for the startup policy position, signaling its commitment to nurturing the startup ecosystem.
However, in Taiwan, Chiu indicates the rise of corporate venture capital (CVC) has somewhat overshadowed traditional venture capital, with CVCs often focusing narrowly on their own industries, neglecting the broader spectrum of startup opportunities. Moreover, Taiwan's fragmented approach, with nine government departments each managing various aspects of startup initiatives, has hindered cohesive policy implementation and efficiency.
Against this backdrop, Taiwan's new government, under the leadership of Lai Ching-te, has unveiled the ambitious "Asia Silicon Valley Development Plan (ASVDP 3.0)," aiming to inject NT$150 billion(USD$5.02 billion) annually into startup investments over the next four years. TVCA has responded with a series of recommendations:
- Expanding the scope of angel investment and lowering the investment threshold to NT$500,000, making angel investment more accessible.
- Encouraging newly established venture capital funds to allocate over 30% of their funds to startups, with the government offering a 20% tax incentive.
- Lowering the taxation transparency threshold for limited partnerships from NT$300 million to NT$200 million to support small and medium-sized venture teams.
- Implementing tax policies to incentivize large enterprises to invest in or acquire startups, offering tax incentives more appealing than conducting independent research and development.
- Assisting the Taiwan Stock Exchange and the Taipei Exchange in constructing a comprehensive new capital market to achieve the goal of having a hundred startups exit each year.
Taiwan's venture capital landscape stands at a critical juncture, requiring proactive measures and better coordination of resources to compete effectively on the global stage. As Taiwan charts its course in the ever-evolving startup ecosystem, the stakes are high, and decisive actions are needed to secure its position as a regional innovation hub.
In 2024, TVCA will also initiate the 'Accelerator Program,' which will guide startups with the potential for international expansion to enter global markets.
