Policy Statement by the Iranian Venture Capital Association to the Vice President for Science, Technology, and the Knowledge-Based Economy

Iran’s Venture Capital Association Proposes Measures to Strengthen Private Financing for Innovation

The year 1404 (2025) was designated by the Supreme Leader as the “Year of Investment for Production,” once again emphasizing the importance of linking production, innovation, and investment. Undoubtedly, realizing this slogan within the ecosystem of science, technology, and the knowledge-based economy requires activating and empowering financial institutions such as research and technology funds, Corporate Venture Capitals (CVCs), venture capital firms (VC firms), publicly listed VC funds, crowdfunding platforms, and other professional actors in this field.

In this context, the Iran Venture Capital Association, as the primary professional employer organization in this sector, submitted a letter to Dr. Afshin, the Vice President for Science, Technology, and Knowledge-Based Economy, proposing a set of practical solutions and requests to enhance the role of private financial institutions in financing national innovation. The main areas of these proposals include:

1. Developing a program to provide risk coverage and leverage private sector resources for venture investments in priority areas of the knowledge-based economy.
2. Implementing the untapped capacities of the Knowledge-Based Production Leap Law, specifically:
   • Facilitating the execution of “Clause T, Article 11” for corporate research and technology funds to achieve at least a 500% growth compared to the previous year.
   • Establishing operational mechanisms for research and technology funds to utilize “Clause T, Article 11” for attracting tax credits from large eligible companies that cannot or do not intend to establish CVCs, and using these resources for investment.
   • Pursuing legal approval for a third type of time-limited research and technology funds (LPFs) capable of directly attracting tax credit resources for knowledge-based investments.
   • Implementing “Clauses A and B, Article 4” regarding the acceptance of credit and customs guarantees by research and technology funds.
   • Executing “Clause A, Article 17” to enable specialized innovation financial institutions to act as guarantors in the capital market.
   • Expanding venture financing and investment capacities in science, technology, and innovation in underdeveloped regions by facilitating tax credit allocation under Article 11 through mechanisms tailored to inherent regional constraints.
   • Enabling financial institutions to utilize research and development tax credits.
3. Establishing a fund-of-funds managed and co-invested by research and technology funds, the Vice-Presidency for Science and Technology, and the Innovation and Prosperity Fund, to provide credit, financial, insurance, and guarantee services exclusively to specialized innovation and technology financial institutions.
4. Special support from the Vice-Presidency for Science and Technology, including allocating its own resources and defining missions for non-governmental research and technology funds in eligible sectors.
5. Regulating and integrating oversight and involvement of supervisory bodies regarding financial institutions in the innovation ecosystem, particularly non-governmental research and technology funds.
6. Limiting the Vice-Presidency and affiliated bodies, including technology development headquarters, from equity participation in investment companies and research and technology funds, shifting the government’s role from direct ownership to policy-making to avoid competition with the private sector.
7. Pursuing the establishment of a secondary market for crowdfunding participation certificates for knowledge-based, creative, and technological companies via the OTC market.
8. Advocating for amendments to the charters of venture and private listed funds, including incentives to direct resources collected toward real investment in the innovation and technology ecosystem.
9. Defining guarantees for intangible assets in the guarantee portfolios of research and technology funds, sharing risk coverage through the Innovation and Prosperity Fund or the aforementioned fund-of-funds.

The Association expects that, given the Supreme Leader’s emphasis in 1404, tangible executive actions and operational transformations will be implemented. To ensure coordinated decision-making, leverage private sector expertise, facilitate interactions among financial institutions, and resolve structural barriers to innovation financing, it is recommended to establish a Specialized Financing and Investment Committee under the Steering Council of Knowledge-Based Technologies and Products. Regular expert sessions and active participation of specialized investment institutions within this committee could provide an effective framework to accelerate the implementation of transformative policies in Iran’s knowledge-based economy.