Tnufa* is a grant under the auspices of the former Office of the Chief Scientist (National Authority For Technological Innovation, NATI ). It supports innovative technological ventures of Israeli individual entrepreneurs and startups at a very early stage of the business. An objective of the Tnufa fund is to promote the technological project to a stage where it can raise funding from potential investors, enabling the continued later stage development of the product.
Tnufa provides a grant of up to 85% of approved expenses with a maximum of about $50,000 for each project. The money received is meant for specific purposes, such as building prototypes, patent protection, market research, feasibility testing and creating a business plan.
The application and selection process includes filling in comprehensive application forms and interviews. Important criteria for selection include the experience and skills of the entrepreneur/s, market potential of the product and novelty.
If you are an entrepreneur who does not have any funds, or does not want to risk their own capital, or give up equity, Tnufa may be a good choice for you. However, you should also be aware of possible drawbacks. You may want to consider the possible advantages and disadvantages of Tnufa. These may include those I have listed below.
- The recipient company only needs to pay the money back if it succeeds.
- Tnufa does not take equity from the company.
- You can continue working in your regular job, until VC funding is raised.
- Receipt of the grant is a show of faith in your venture by a government body.
- After the period of the Tnufa grant has finished, a recipient can apply to other R&D programs of the OCS (NATI). This usually may not be done the other way round. (See my blog post Technology Incubators In Israel ).
- There is a similar vetting process for incubators and therefore Tnufa acceptance may increase chances of being accepted to these other programs.
- Being a recipient of Tnufa may encourages other investors.
- Tnufa may offer assistance in locating strategic partners and investors.
- The Tnufa grant may be subject to the terms of the Industry Research and Development Encouragement Statute.**
- There may be restrictions and fining of transfer of the technology and IP outside of Israel.**
For more information regarding Tnufa click here.
*Please note that this not meant as a legal opinion and the information should be checked regarding your individual situation.
** See an article by Ofer Granot of Herzog Fox & Neeman relating to NATI and draft regulations http://www.lexology.com/library/detail.aspx?g=e7ffe471-2c89-418c-9e5e-9422cb75edf7