Venture capital (VC) fund managers are always on the lookout for new and innovative ways to provide capital to start-ups and emerging companies. One source of funding that is often overlooked is the Research and Development Tax Incentive (R&DTI) program. This program provides tax incentives in terms of both tax credits and often CASH to start-ups that engage in R&D activities.

VC fund managers should be looking at the R&DTI as an alternate source of capital for four reasons.

Firstly, by providing funding through the R&DTI program, companies can reduce their need for additional equity capital. This means that the equity of existing shareholders, including the VC fund, will be less diluted. This is particularly important for early-stage companies, where dilution can have a significant impact on the value of the investment.

Secondly, R&DTI funding can be used to support a wide range of R&D activities, from basic research to product development. This means that companies can use the funding to explore new technologies, develop new products, or improve existing ones. This can help to ensure that the company remains competitive and has a strong pipeline of new products and services.

Thirdly, R&DTI funding can also be used to hire additional staff or purchase equipment, which can help to accelerate the company's growth. This can lead to increased revenues and profits, which can benefit both the company and its investors.

Finally, R&DTI funding can be used to offset the costs of R&D, which can make the company more attractive to potential investors. This is because the company will be able to invest more of its resources into R&D and less into paying off debt or meeting other expenses.

R&DTI funding can be a valuable source of capital for start-ups and emerging companies. VC fund managers should be aware of the R&DTI program and consider it as an alternate source of funding to ensure that their investment remain undiluted and assist in growing the company through the provision of the resources it needs to succeed in a competitive market.

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