Keywords: funding, incubation, startups

Prototron is the first private fund for entrepreneurs, students, inventors to finance the development of their first working product example the prototype. Prototron is founded by Tallinn Science Park Tehnopol, Swedbank and Tallinn University of Technology. Prototron fund has raised more than 400000 euros invested in 30 innovative projects.

STP-s, companies and universities are struggling to get their innovations and business models to the market. As the researches show the largest financial gap lays in the prototyping phase as it is too risky for the private investors and there are limited public funds available. The aim of Porotron fund is to bridge the gap. Tallinn Science Park Tehnopol, Swedbank and Tallinn University of Technology put together a starting fund of 300 000 euros in 2012 to finance the prototyping phase of most promising product ideas that could have the business potential globally. The fund is opened for everybody, focused on building physical products. All it takes to apply for the funding is to submit your idea, describe the team and business potential, draw out the budget and action plan. After that all the teams face the expert panel (combined by the entrepreneurs) and the best from the best receive the needed investment for the prototype building. There is no limitation on the amount of money the teams can apply, the fund does not take any equity or share from the revenue. All we need to see is the finalized product example. Each year there are 4 application rounds for the teams and around 150 applications are submitted each round. The average amount of money the teams require is around 10 000 euros. Since launch in late 2012 Prototron has financed 30 teams with more than 400 000 euros. 18 teams have successfully launched their products and have created over 60 job positions, and raised additionally more than 10 million euros of private investments. Prototron has also encouraged the cooperation between universities and STPs as more and more IP related ideas from the university reach the product phase and enter STP as a company.

When launched, Prototron was one of the kind financial fund that the partners used in order to capitalize university held IP, and to build a sustainable flow of new business models to the STP and business incubators. It has proven to be a successful way as there are plenty of new product ideas gathered annually. The effect of Prototron started off in micro scale, providing client flow to STP, IP realization for university and marketing channel for private partners. Today the effect can be seen macro scale as well, as the majority of born global startup companies start with the grant of Prototron. Still there are many private angel or VC funds available for the startup companies but the prototyping phase is too risky for them and Prototron serves its position in helping fresh projects to actually reach the revenue phase or investment rounds.

Each round about 150-200 applications are submitted to Prototron financing that makes it a largest business model competition in the region with 700+ applicants annually. Prototron has given out about 400 000 euros worth of grants to 30 different project ideas. 18 new products and businesses have been successfully launched, having the revenue of 4 million euros annually. The alumni of Prototron has raised 10 million euros worth of follow up private investments from business angels and VC-s. 6 new IP related projects from the universities have been capitalized. Prototron fund has raised additional funding from new partners and the total amount of funds available is reaching 500 000 euros.

Founders of Prototron: Tallinn Science Park Tehnopol (goal is to seek new innovative business ideas and companies), Tallinn University of Technology (goal is capitalizing the IP of the university), Swedbank (goal is to grant the visibility in startup ecosystem). Users: students, startup companies, established businesses, inventors, scientists.

Prototron is established as a separate foundation and the shareholders are the founders: Tallinn Science Park Tehnopol, Swedbank and Tallinn University of Technology. The management and core activates are conducted by the staff of Prototron Foundation.