To implement the deployment requirements of the CPC Jiangsu Provincial Committee and Jiangsu Provincial People's Government, give play to the role of long-term capital, patient capital, and strategic capital, accelerate the transformation of scientific and technological achievements in universities and research institutes, and strive to build an important position for developing new-quality productive forces, the Jiangsu Provincial Strategic Emerging Industry Master Fund (hereinafter referred to as the "Provincial Master Fund") and Nanjing Zijin Industrial Investment Co., Ltd. (a wholly-owned subsidiary of Nanjing Innovation Investment Group Co., Ltd.) and other entities have jointly contributed to the establishment of the Nanjing University Sci-Tech Achievement Transformation Angel Fund, with a scale of RMB 500 million. The selection of management institutions is now open to the public, and the relevant matters are announced as follows:

I. Basic Principles of Selection

(I) Principle of Fairness, Impartiality and Openness

Review and evaluation shall be conducted in accordance with unified selection rules, selection criteria and scoring standards to ensure equal opportunities for all applicant management institutions under the same conditions.

(II) Principle of Compliance with Laws and Regulations

The selection work shall strictly implement national laws and regulations, industry supervision requirements and relevant policies, and be carried out in accordance with laws and regulations for the selection of fund management institutions.

(III) Principle of Abiding by Market Rules

Abide by market rules, expand selection channels, and select high-quality fund management institutions that match the fund's investment direction, have excellent management qualifications, strong management capabilities and rich investment experience for cooperation.

II. Basic Information of the Nanjing University Sci-Tech Achievement Transformation Angel Fund

(I) Fund Positioning

It aims to promote the development of Nanjing's future industries through joint efforts of the provincial and municipal governments, focusing on the transformation of forward-looking, strategic and breakthrough-leading scientific and technological achievements.

(II) Organizational Form

Limited partnership system.

(III) Registration Address

Nanjing City, Jiangsu Province.

(IV) Duration

The total duration is 15 years, including an investment period of 8 years and an exit period of 7 years.

(V) Capital Contribution Structure

The subscribed scale of the fund is RMB 500 million, among which:

The Provincial Master Fund subscribes to 25% of the fund scale;

The management institution raises 0%–25% of the fund scale from external sources;

The general partner/management institution shall subscribe to no less than 1% of the fund scale.

(VI) Investment Model

Adopt the direct investment method, and the investment amount in a single project shall not exceed 20% of the total paid-in capital of the fund.

In principle, invested enterprises shall meet the following requirements:

(1) Registered within the territory of China (excluding Hong Kong, Macao and Taiwan regions);

(2) At the time of receiving investment, the number of employees shall not exceed 200, among which the number of employees with a bachelor's degree or above shall not be less than 30%; both the total assets and annual sales revenue shall not exceed RMB 30 million;

(3) At the time of receiving investment, the establishment time shall not exceed 5 years (60 months);

(4) At the time of receiving investment, it has not been listed on domestic or foreign stock exchanges;

(5) In the year of receiving investment and the previous year, the total R&D expenses shall account for no less than 20% of the total cost and expense expenditure.

(VII) Investment Directions

Centering on the disciplinary characteristics and professional advantages of universities, it focuses on fields such as future network communication, third-generation semiconductors, cutting-edge new materials, future energy, future health, advanced computing, meta-universe, quantum technology, general intelligence, zero-carbon and negative-carbon technology, and humanoid robots; the biomedicine and information and communication fields involved in the Nanjing core bearing area of the National University Regional Technology Transfer and Transformation Center; and other key fields that conform to the future industrial development plans of Jiangsu Province and Nanjing City.

(VIII) Investment Regions

The amount of direct investment in enterprises within Jiangsu Province shall not be less than the total capital contribution of governments at all levels, and its proportion in the total direct investment amount shall not be less than 70%. The following circumstances may be recognized as investment in enterprises within Jiangsu Province:

(1) Enterprises directly registered in Jiangsu Province;

(2) Enterprises that relocate their registration address to Jiangsu Province after investment (the relocation of registration address occurs during the fund's duration);

(3) Enterprises that settle their main production and R&D bases in Jiangsu Province by establishing subsidiaries (with substantive business operations);

(4) Enterprises acquired by enterprises registered in Jiangsu Province (controlling acquisition and included in the consolidated financial statements);

(5) Other circumstances that may be recognized as investment in enterprises within Jiangsu Province.

The proportion of the amount of direct investment in enterprises within Nanjing City in the total direct investment amount shall not be less than 75%. The following circumstances may be recognized as investment in enterprises within Nanjing City:

(1) Enterprises registered in Nanjing City;

(2) Enterprises outside Nanjing City that relocate their registration address to Nanjing City;

(3) Enterprises outside Nanjing City that establish subsidiaries or R&D and production bases in Nanjing City (with substantive business operations);

(4) Enterprises outside Nanjing City that are merged, acquired or controlled by enterprises registered in Nanjing City;

(5) After the establishment of the fund, other funds managed by the fund manager during the same period, or other funds managed by entities under the same actual control as the fund manager, invest in enterprises registered in Nanjing City or enterprises outside Nanjing City that relocate their registration address to Nanjing City;

(6) Other circumstances that may be recognized as investment in enterprises within Nanjing City.

The amount of investment in enterprises within Jiangsu Province and Nanjing City shall be calculated separately in accordance with Article 1 and Article 2 above.

The proportion of the amount of investment in enterprises engaged in the transformation of scientific and technological achievements of universities and research institutes in the total investment amount shall not be less than 70%. The following may be recognized as such enterprises:

(1) Enterprises engaged in the direct transformation of scientific and technological achievements by universities and research institutes (transformation forms include investment in the form of scientific and technological achievements, conversion into shares or proportion of capital contribution, etc.);

(2) Enterprises that have subject cooperation with universities in industry-university-research, including the transfer of scientific and technological achievements to other enterprises; licensing other enterprises to use scientific and technological achievements; and jointly implementing the transformation with other enterprises using scientific and technological achievements as cooperation conditions;

(3) Other enterprises that apply scientific and technological achievements of universities and research institutes.

In principle, no investment shall be made in overseas projects. If it is really necessary to invest in overseas projects, the fund management institution shall conduct strict review and fully demonstrate the necessity and compliance of capital outflow and capital security guarantee measures.

(IX) Investment Decision-Making

The Investment Decision-Making Committee shall consist of 5 members, among which: the fund management institution appoints 3 members; Nanjing Innovation Investment Group and its designated entities appoint 1 member; the Provincial Master Fund management institution appoints 1 member.

The rules of procedure and composition of the investment decision-making body shall take effect after being reviewed and approved by the fund partners' meeting.

(X) Management Fees

Investment period: not exceeding 3% of the fund's paid-in scale per year;

Exit period: not exceeding 2.5% of the initial investment cost of unexited projects per year;

Extension period and liquidation period: no management fees shall be charged;

Establish a retrospective adjustment mechanism for management fees. At the end of the investment period, the uninvested funds of the fund shall be returned and handled as capital reduction, and the overcharged fund management fees shall be returned in a timely manner or offset against the fund management fees during the exit period.

(XI) Hurdle Rate and Performance Fee

There is no hurdle rate of return. The principal distribution sequence is limited partners first, then general partners. The amount beyond the principal is excess return, and the general partner may withdraw no more than 20% of it as performance fee.

(XII) Negative List

The fund shall not engage in the following businesses:

Engaging in guarantee, mortgage, entrusted loan and other businesses;

Investing in secondary market stocks, futures, real estate, securities investment funds, corporate bonds, trust products, wealth management products, insurance plans and other financial derivatives;

Providing sponsorships or donations to any third party;

Absorbing deposits or disguised deposits, or providing loans or fund lending to third parties;

Making external investments with unlimited joint and several liability;

Illegally raising funds by issuing trust products or collective wealth management products;

Conducting "equity in name but debt in reality" or "fund in name but deposit in reality" transactions;

Investing in projects prohibited, restricted or not in line with national industrial policies;

Using fund investment as a preferential condition for investment promotion;

Other businesses prohibited by national laws and regulations.

(XIII) Management and Operation Requirements

The fund's management and operation shall comply with the relevant requirements of the provincial government investment fund management system and the Provincial Master Fund management system, and shall implement the following management requirements:

The fund management institution shall compile an investment field catalog under the guidance of the Provincial Master Fund management institution, and the fund shall conduct investment in accordance with the investment field catalog;

Direct investment projects of the fund shall be submitted to the Provincial Master Fund management institution for pre-review;

The fund shall select a commercial bank with custody qualification as the custodian institution. The custodian institution shall be selected through public selection and take effect after being reviewed and approved by the fund partners' meeting; the custodian bank shall be one of the domestic systemically important banks (or their branches) recently identified by the People's Bank of China and the National Financial Regulatory Administration, and the fund's custodian bank account shall be directly connected to the Provincial Master Fund investment management system;

The fund management institution shall regularly update the fund's investment and operation status in the Provincial Master Fund investment management information system;

The fund management institution shall regularly compile reports and submit them to the Provincial Master Fund management institution:

(1) Submit the fund's quarterly management report within 30 days after the end of each quarter, including the fund's investment and operation, project progress and fund use; issue the balance sheet, income statement and cash flow statement within 10 days after the end of each quarter;

(2) Submit the fund's annual investment plan, capital contribution demand plan, fund valuation report and valuation basis within 2 months after the end of each year; submit the audited fund financial report and annual management report within 4 months after the end of each year;

The Provincial Master Fund management institution shall conduct annual assessment and evaluation of the fund. The actual amount of management fees accrued by the fund each year shall be 80% of the amount that should be accrued in the current year. Among the remaining 20%, 10% of the amount that should be accrued in the current year shall be linked to the current year's assessment and evaluation results, and if the current year's assessment and evaluation grade is "poor", no accrual shall be made; the other 10% shall be accrued at one time when the fund is liquidated, and if the principal is not fully recovered when the fund is liquidated, no accrual shall be made. The specific implementation measures for assessment and evaluation shall be formulated separately by the Provincial Master Fund management institution;

The Provincial Master Fund management institution shall conduct annual supervision and inspection and special supervision and inspection on the fund's management and operation;

The Provincial Master Fund may, in accordance with laws and regulations, implement excess return concessions and early transfer exit concessions to the relevant investors of the fund.

III. Application Requirements for Management Institutions and Management Teams

(I) Requirements for Management Institutions

The relevant standards for selecting management institutions shall not be lower than the following conditions:

Shall be registered with the Asset Management Association of China (AMAC);

In principle, the institution or its actual controller shall be a leading institution in the private equity and venture capital industry (ranked among the top 50 early-stage investment institutions, venture capital institutions or state-owned investment institutions in the authoritative institution rankings such as Zero2IPO, ChinaVenture and Rongzhong in the past three years), or a leading institution in a segmented industry (ranked among the top 50 in the segmented industry rankings of Zero2IPO, ChinaVenture and Rongzhong);

Registered in the Chinese mainland, with paid-in registered capital of not less than RMB 10 million and matching the scale of the fund it manages;

The capital contribution ratio of the management institution to this fund shall not be less than 1% of the fund's subscribed scale;

Possess good fund-raising capabilities and exit performance. In principle, the scale of private equity and venture capital funds managed by the institution shall not be less than RMB 5 billion, and at least 10 of the enterprises directly invested by the fund have exited through IPO, M&A, equity transfer and other methods and achieved capital preservation and appreciation; as the first round of external investment institutions (investment institutions introduced when an enterprise receives external institutional investment for the first time), it has invested in at least 5 early-stage scientific and technological innovation projects with scientific and technological achievement transformation background (including enterprises engaged in direct achievement transformation by universities or research institutes, various scientific and technological innovation enterprises cooperating with universities in industry-university-research, etc., and the intellectual property rights have a reasonable and clear distribution among universities and technical parties);

Have a professional and stable team. Among the full-time employees of the institution, at least 10 are specially engaged in investment business, among which at least 5 have more than 5 years of experience in equity investment fund management, and have good professional ethics and reputation. Have a fixed business site and software and hardware facilities matching its business;

Have a sound corporate governance and internal control management system. Have standardized project selection mechanisms, investment decision-making mechanisms, incentive and restraint mechanisms, risk control mechanisms, financial management mechanisms, etc.;

The management institution and its core management team members have no bad records of being punished by financial management departments or judicial organs, and no serious untrustworthy records;

After being determined as the management institution of this fund through the selection process, the management institution shall not arbitrarily change its equity, core management team or management personnel. If any adjustment is really necessary, it shall submit a written report to Nanjing Innovation Investment Group Co., Ltd. for record within 5 working days from the date of making the adjustment decision. In case of major adverse adjustments, Nanjing Innovation Investment Group Co., Ltd. has the right to reselect or change the management institution.

(II) Requirements for Management Teams

Equip with a full-time management team of not less than 10 people. Members shall have relevant professional qualification certificates, relevant field investment experience, and have worked in the applicant institution for no less than 3 years;

The core members of the full-time management team (the person in charge assigned to the fund and members of the investment committee) shall all have more than 5 years of equity investment management experience, and at least 5 of them have full-process management experience in "fund-raising, investment, management and exit" of fund products with the same nature as the Nanjing University Sci-Tech Achievement Transformation Angel Fund in the applicant institution. The above-mentioned fund products with the same nature as this fund refer to equity investment funds with the same or similar investment directions; within 1 year after passing the selection, a fixed office shall be set up in Nanjing and personnel shall be designated to coordinate and connect with the needs of the transformation and implementation of scientific research achievements of Nanjing universities;

The management institution shall ensure the stability of core members. The fund agreement shall lock in the members of the fund's Investment Decision-Making Committee and the core personnel of the management team. Any change of the locked personnel shall be approved by the fund's relevant authority such as the fund partners' meeting through voting;

The historical performance of core members shall be true and verifiable. Core members shall have served as key personnel, members of the investment committee or designated representatives in relevant funds, or served as senior managers responsible for investment business in the applicant institution and the managers of relevant funds;

Before the fund completes 70% of its investment progress, core members shall not raise or manage other funds with the same investment fields, investment regions and investment stages;

The management institution shall establish a normalized industry research mechanism, have a certain understanding of cutting-edge technologies related to future industries, and cover at least 3 of the fields involved in the fund's investment directions and have corresponding research reports;

The management team shall establish a risk-interest binding mechanism in the fund.

IV. Selection Process

The fund management institution shall be publicly selected by Nanjing Innovation Investment Group Co., Ltd. (the fund initiator of Nanjing), and the Provincial Master Fund management institution shall participate in the selection work.

The selection process includes:

Release of announcement;

Preliminary review of materials: conduct a preliminary review of the completeness, comprehensiveness and feasibility of the application materials, exclude application plans that do not meet the basic requirements, and determine the list of shortlisted institutions;

Due diligence: conduct due diligence on the shortlisted institutions, focusing on the comprehensive verification of important information such as the management institution's registration and filing, historical business, organizational structure, professional operation, investment decision-making, post-investment management, risk control, finance, law and business;

Expert review: organize an expert review group to conduct a comprehensive review of the application materials of the management institutions, make comprehensive judgments and scores by listening to due diligence reports and on-site inquiries of the applicant institutions, and determine the list of candidate management institutions;

Decision-making process: the fund initiator determines the selection result after completing the decision-making process;

Result announcement: the selection result shall be publicly announced to the society for no less than 5 working days.

V. Application Method

Applicants shall carry out the application for fund management institutions in accordance with the requirements of this announcement and prepare detailed application materials as specified in the appendix.

Application materials shall be compiled into a unified booklet. Specific requirements for stamping, formatting, cover design and binding are detailed in the appendix.

Submit three copies of the compiled application materials to the Fund Management Department, 41st Floor, Building 4, Financial City, No. 248 Lushan Road, Jianye District, Nanjing. Meanwhile, send the scanned copy of the stamped compiled application materials and the Word electronic version to the email address selection@njicg.com.
Contact Person: Mr. Zhou, Tel: 025-86596544

Application Deadline: 15 working days after the release of this selection announcement.

Nanjing Innovation Investment Group Co., Ltd.

January 20, 2025

Source: Venture Capital Group
Review: Xue Yao
Release: You Yi