Piraye Kuranel Başol’s articles from Herguner Bilgen Ucer Attorney Partnership are most popular:
- with Senior Company Executives and HR
- in Turkey
- with readers working within the Advertising & Public Relations and Banking & Credit industries
The Ministry of Industry and Technology (the
“Ministry“), jointly with the Ministry
of Treasury and Finance, published the Regulation on Participation
in Venture Capital Funds and Venture Capital Practices (the
“Regulation“) on 28 November 2025.
Issued pursuant to the Law No.5746 on the Support of Research,
Development and Design Activities, published in the Official
Gazette dated 12 March 2008 and numbered 26814, the Regulation sets
out the scope and implementation of the source to be transferred
from the Ministry’s budget to venture capital funds to support
technology, technological production, and innovation
activities.
Fund Selection Process for Capital Support
The Regulation introduces a two-phase invitation based selection
process to determine eligible funds. The Ministry will open
applications through an official invitation, and submissions
meeting the stated criteria will be reviewed by the Venture Capital
Fund Evaluation Commission (the
“Commission“). The final decision
regarding the public capital commitment will be made by the
Minister of Industry and Technology, taking into account the
Commission’s assessment.
Key Criteria for Fund Selection
The Regulation defines six core criteria for the
Commission’s evaluation of fund applications. These include the
fund manager’s experience in venture capital or private equity,
expertise in priority sectors, returns generated from prior
investments and the ratio of those returns to total capital
deployed, the fund’s management expenses, the proportion of
third-party investor commitments relative to the Ministry’s
funding pledge, and any additional benchmarks specified by the
Ministry in the official invitation decision.
Investor Agreement for the Selected Fund
Following the selection of the fund eligible for public capital
support, the Ministry and the fund manager will sign an investor
agreement aligned with the objectives and conditions of the
invitation. Key matters including the fund’s duration,
potential extensions, liquidation procedures, the disposition of
remaining unallocated capital, and the individuals authorized to
make related decisions will be determined through this agreement in
a manner consistent with the fund’s purpose.
Investments with Allocated Resources
Investment decisions using fund resources will likewise be made
in accordance with the objectives set out in the invitation. These
decisions will fall under the authority of the Investment
Committee, as constituted by the investor agreement. While
technology, technological manufacturing, innovation activities and
venture capital funds are identified in the Regulation as eligible
investment areas, the invitation decision will serve as the primary
determinant of the fund’s investment scope. The Regulation
further stipulates that all investments must be aligned with the
fund’s purpose. If the fund allocates capital to other venture
capital funds, those recipient funds must also meet the specific
conditions of the original call.
The regulation ensures that the fund can also obtain resources
from external sources, and in this context, both bilateral and
multilateral protocols regarding the implementation between third
parties, the fund manager, and the Ministry can be signed.
Investment Restrictions for Allocated
Resources
The Regulation also sets out specific restrictions on
investments that may be financed through the allocated resources.
Accordingly, investments cannot be made in companies that (i)
produce, trade or provide goods or services in violation of
applicable legislation, or (ii) operate in areas considered
contrary to the law, public order, or general morality. This
prohibition includes, in particular, companies active in tobacco,
alcoholic beverages, casino or gambling/betting activities, as well
as entities engaged in political or ethnic activities. In addition,
companies whose business is exclusively focused on real estate
investments are also ineligible for investment.
Audit of Allocated Resources
Oversight of the Ministry’s capital allocation will be
conducted through reports submitted by fund managers every three
months. The Regulation grants the Ministry the right to take
preventive measures, to notify relevant public institutions and to
pursue legal remedies when necessary within the powers defined
under the investor agreement.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
