In 2021, Baoshan, as the only local government in Shanghai, was approved to carry on the SAI pilot program for innovative reform for landing scientific and technological achievements. In 2022, Baoshan issued the policy of SAI. More than two years later, Zhang Qianwu has become accustomed to “swift switching” between laboratory clothes and formal clothes. In the past, Shanghai Tianyu Optical Communication Technology Co., LTD. only had technology and patents, but now it has financial support and a complete management and operation team.

As enterprises grow, the business environment needs to be continuously optimized. For landing scientific and technological achievements and the incubation of early hard-core technology projects, Baoshan has launched the “CFIS scheme” for sci-tech innovation, with more professional forces from the four aspects of consulting, fund-raising, investment and service, improving the efficiency and impact of the policy of SAI.

“Early investment, small investment and hard-core technology” has been a trend in the investment circle in recent years. Persons in charge of market-oriented fund companies, government-guided funds and venture capital institutions said it is not that they do not want to invest, but that they worry too much. Some people are afraid that they do not understand the technical prospect; some people are not good at the rate of return; some people are worried about the long exit cycle.

Everyone wants to identify the opportunities from risks, but no one knows all. The technical plan needs to be verified; the contractual relationship has not been confirmed with the downstream users; there are operational risks, management risks and intellectual property risks of the start-up project. Identifying opportunities from risks requires professional ability and serviceability.

This year, Shanghai Investment Consulting Corporation (SICC) and University Science and Technology Park Shanghai Baoshan Development Co., LTD. (USTPSBD) jointly established Shanghai SICC Sanjiang Science and Technology Service Co., LTD. As one of the earliest, most comprehensive and biggest consulting institutions in China, SICC has accumulated rich experience in top-level design, policy research, program planning, project planning and fund review. As a member of Baoshan’s SAI policy-leading group, USTPSBD continues to explore a new paradigm to support sci-tech innovation enterprise, with rich practical experience.

The cooperation between the two companies aims to leverage the expertise of both companies to acquire insights into the industry and the corporates and identify opportunities. The director of the consulting service center of SICC revealed that it will adopt the “hard-core technology evaluation” method involving a scoring system covering multiple aspects, namely technology, market, group, rationality, and investment (TMGRI), to assess the technical difficulties, market prospect, group strength, plan rationality and investment expectations. 

The lack of funding is the key reason why so many tech start-ups fail to cross the “Valley of Death”. It is unhelpful to turn to banks. Enterprises often lack guarantee funds, collateral and pledges and the founder team holds that equity financing might lead to early dilution of equity, often bringing more uncertainty to the development of the business. 

SAI targets this problem. In this model, the government invests in the target enterprises at the initial stage of landing achievements and when the target enterprise carries out market-oriented equity financing, the investment amount is converted into corresponding equity, and the equity withdrawal is carried out with the growth of the enterprise, allowing the independent development of the enterprises.

In September, Baoshan launched a solicitation for SAI 2024 and has received materials for more than 170 projects. It shows that the market has an urgent need for the government’s patient funds represented by SAI and the “Appropriation and Investment Policy”. “Two many projects bring us ‘sweet troubles’,” said the general manager of USTPSBD.

Up to now, Baoshan has approved projects to support 20 sci-tech innovation enterprises with a total support fund of 200 million yuan with SAI. However, government funds are limited. More early-stage hard-core technology projects should benefit from SAI and social capital shall be guided to participate in the investment.

In April this year, the Shanghai Institute of Finance for Technology Entrepreneurship established the Shanghai Angel Group to promote the development of professional angel investors in China, encourage the wealth of society to effectively support scientific and technological innovation and promote the deep integration of scientific and technological innovation and industrial entrepreneurship.

“Thanks to the platform built by the Shanghai Angel Group, the problem of information asymmetry in early project investment can be solved through the mode of ‘leading investors’ promotion before angels’ investment’,” one said. Shanghai Tianyu Optical Communication Technology Co., LTD., jointly supported by Baoshan District and National Innovation Center par Excellence (NICE), successfully raised 2 million yuan from angels on this platform while receiving support from SAI.

“The initial support from SAI helped us complete the design of the prototype product, the ‘Appropriation and Investment Policy’ of NICE helped us complete the product verification, and Shanghai Angel Group enabled us to complete further productization,” said the chairman of Shanghai Tianyu Optical Communication Technology Co., LTD. Multiple supports allow the landing of a number of scientific and technological achievements featuring breakthroughs in major technologies.

Technology enterprises face many difficulties. Zhang Qianwu couldn’t agree more with that point. There are a series of problems such as tax, legal affairs, investment and financing, and talent settlement, and we are too busy to contact government departments and related agencies ourselves,” said she.

With more projects, the need for professional service has grown. To this end, Shanghai Baoshan Technology Transfer Co., LTD. and AMI, a national incubator engaged in the field of new materials and one of the first municipal leading incubators, established Shanghai Ami Sanjiang New Material Technology Co., LTD., to further improve the professional services for market segments.

At present, Shanghai Ami Sanjiang New Material Technology Co., LTD. has taken root in Baoshan. Zhang Pinshu, founder of AMI, revealed that the company is setting an industrialization path for innovative technologies developed by well-known domestic scientists. Nearly 30 masters of the “Qianhe Project” in the field of materials recruited in the early stage can serve as external consultants or trustees to serve the start-up project. Qianhe Project, launched by USTPSBD, aims to assist with the incubation of technology innovation projects of startups. In addition, the Proof of Concept Center (POCC) scheme jointly formed by USTPSBD with the Material Business Division of NICE is also in progress.

“Focusing on the important leading industries of Shanghai and Baoshan, we will introduce the leading professional service institutions in an orderly manner according to the AMI model in the future in accordance with relevant supporting policies, to form a high-level and group-type service provider cluster for technological achievements transfer with technology transfer companies as the core and multi-field and sub-track professional service institutions as the support,” the general manager of Shanghai Baoshan Technology Transfer Co., LTD. Said.