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05 - Funding Model

Vigía Incubation Framework (VIF)​

National Public–Private Incubation Network Guide - Version 1.0

1. Introduction

The Funding Model defines how capital flows through the Vigía Incubation Framework (VIF).
It operationalizes the financial mechanisms needed to support:

  • early‑stage validation,
  • national incubation and acceleration programs,
  • capability‑building for incubator nodes,
  • investment readiness,
  • co‑investment,
  • tranche‑based startup financing, and
  • long‑term sustainability of the national network.

This section must be read after Section 03 - System Architecture and Section 04 - Operating Model, as it builds on the governance structures, investment processes, evidence practices, and MEL systems defined there.

For navigation support, see 00a - How to Use VIF.
For terminology, see 00c - Glossary.

2. How to Read This Section

This section explains:

  • how national capital is structured,
  • how it moves through VIF,
  • how decisions are made,
  • how risk is controlled, and
  • how public–private investment becomes sustainable.

It should be used by:

  • Ministries and public-sector funding agencies
  • Private investors and co‑investment partners
  • Incubator node operators
  • TOU financial and compliance teams
  • Government budget planners
  • International donors and development partners

Sections that depend on this one:

  • Section 06 - Governance & Capability Requirements
  • Section 07 - KPIs & MEL
  • Section 08 - Roadmap & Phasing
  • Annex 06 - Investment Instruments

3. High-Level Funding Architecture

The VIF Funding Model is based on five financial pillars:

  1. National Innovation Fund (NIF)
  2. Public–Private Co‑Investment Mechanisms
  3. Tranche-Based Disbursement (Evidence-Driven)
  4. Capacity-Building Funding for Nodes (IMM-P®)
  5. Reinvestment & Sustainability Loop

4. Funding Architecture Diagram

Funding Architecture Cycle
flowchart TD
    A(National Innovation Fund) --> B(Co-Investment Mechanisms)
    B --> C("Funding Instruments<br/>SAFE · Grants · Tranches")
    C --> D("Investment Committee<br/>Evidence-Based Review")
    D --> E(Tranche Deployment)
    E --> F("KPIs · MEL · Dashboard")
    F --> G("Foresight Updates<br/>Vigía Futura")
    G --> A

This cycle ensures that capital allocation remains:

  • transparent,
  • evidence‑driven,
  • risk‑managed, and
  • strategically aligned with evolving national priorities.

5. Funding Principles

5.1 Evidence Before Capital​

No funds are released unless:

  • the startup delivers an MCF 2.1 evidence package, and
  • the incubator node meets IMM-P® capability requirements.

5.2 Public–Private Symmetry​

Public and private investors follow:

  • the same due diligence templates,
  • the same definitions of readiness, and
  • the same tranche milestones.

5.3 Transparency & Digital Traceability​

All funding processes must be fully logged within the VIF digital ecosystem.

5.4 Sustainable Multi-Year Budgeting​

NIF is structured for multi‑year stability, with buffers for uncertainty.

5.5 Risk‑Managed Investment​

Funding decisions must incorporate:

  • maturity scores (IMM-P®),
  • risk diagnostics,
  • evidence quality,
  • team capability, and
  • foresight alignment.

6. National Innovation Fund (NIF)

The NIF is the central financial mechanism of VIF.

6.1 Components​

  • Annual national budget allocation
  • Public–private matching funds
  • International donor contributions
  • Recycling of SAFE or equity returns
  • University innovation funds (where available)
  • Regional government contributions

6.2 Use of Funds​

Funds can be deployed across:

  • startup incubation and acceleration
  • investment-readiness work
  • tranche-based funding
  • capability‑building for incubators
  • network digital infrastructure
  • MEL system maintenance

7. Public–Private Co‑Investment Mechanisms

Co‑investment mechanisms enable:

  • shared risk,
  • shared due diligence,
  • greater investment scale,
  • and stronger national investment pipelines.

Mechanisms may include:

  • matching funds (1:1, 1:2, 1:3)
  • catalytic capital instruments
  • blended finance
  • university–industry co‑funding
  • corporate innovation investment

All co‑investment partners must follow:

  • the same investment maturity criteria (IMM-P®),
  • the same evidence package requirements (MCF 2.1), and
  • the same investment review process (IC).

8. Tranche-Based Disbursement

Funding is never released as a lump sum.
It is structured in tranches tied to measurable, evidence‑driven milestones.

8.1 Milestone Types​

  • Completion of MCF 2.1 evidence phases
  • Customer validation metrics
  • Technical feasibility milestones
  • Regulatory or compliance milestones
  • Commercial milestones
  • Growth and retention metrics

8.2 Tranche Decision Flow​

Tranche Decision Flow
flowchart TD
    A(Startups Submit Evidence) --> B(Incubator Node Review)
    B --> C(TOU Financial & Evidence Check)
    C --> D(Investment Committee Decision)
    D --> E(Tranche Release)
    E --> F(MEL Tracking)

Tranche requirements are standardized across all nodes.

9. Funding Instruments

VIF supports multiple funding instruments, depending on national legislation:

9.1 SAFE (Simple Agreement for Future Equity)​

Used when allowed by national regulations.

9.2 Grants​

For early‑stage validation or capability-building.

9.3 Co‑Investment Agreements​

Formalized between NIF and private investors.

9.4 Reimbursable Advances (optional)​

Where country legislation allows.

9.5 Sector-Specific Funds​

Aligned with Vigía Futura sector tracks.

10. Minimum Eligibility Requirements for Funding

To receive funding through VIF, a startup must:

  • be enrolled in an accredited incubator node,
  • have completed a minimum set of MCF 2.1 evidence components,
  • demonstrate alignment with priority sectors,
  • meet minimal operational maturity criteria,
  • comply with all data and reporting requirements,
  • have no outstanding compliance issues,
  • submit updated KPIs monthly.

11. Capital Integrity & Safeguards

To ensure long-term credibility and risk mitigation, VIF requires:

  • anti‑corruption safeguards,
  • conflict of interest policies,
  • third‑party financial audits,
  • digital traceability for all transactions,
  • standardized investment memos,
  • IC decisions logged publicly (summary-only),
  • annual financial transparency reports.

These safeguards ensure national and international trust.

12. Funding Cycle Map

Funding Cycle Map
flowchart LR
    A(Startup Evidence) --> B(Incubator Node Review)
    B --> C(TOU Validation)
    C --> D(Investment Committee)
    D --> E(Tranche Release)
    E --> F(KPI & MEL Monitoring)
    F --> G(Policy Feedback via Vigía Futura)
    G --> A

This map mirrors the national innovation cycle in Sections 03 and 04.

13. Sustainability Mechanisms

Sustainability is fundamental to long-term national innovation strategy.

13.1 Reinvestment Loop​

Returns from equity-based instruments (SAFE, equity, royalties) flow back into NIF.

13.2 Diaspora Capital Channels​

Diaspora investors may participate through:

  • matching schemes,
  • co‑investment vehicles,
  • philanthropic innovation funds.

13.3 Multilateral Engagement​

The model supports partnerships with:

  • CAF
  • IDB Lab
  • World Bank
  • UNDP
  • EU development programs

13.4 Corporate Innovation Capital​

Corporate partners can sponsor:

  • sector tracks,
  • challenges,
  • open innovation cohorts,
  • investment vehicles.

14. Connection to Section 06 - Governance & Capability Requirements

Section 06 expands this Funding Model into:

  • investment governance rights,
  • IC membership rules,
  • fiduciary roles,
  • node financial compliance requirements,
  • maturity progression (IMM-P®),
  • TOU capacity requirements.

It ensures that the funding architecture is well-governed, auditable, and aligned to national strategy.

15. Reference Snapshot

Primary Doulab frameworks informing the Funding Model:

External influences (non-primary):

  • OECD Public Governance Principles
  • OECD Strategic Foresight Toolkit
  • WIPO Global Innovation Index
  • World Bank GovTech Maturity Index

For full bibliography, see 11-references.md.

16. Licensing

Vigia Incubation Framework © 2025 by Luis A. Santiago is licensed under CC BY-NC-ND 4.0 CC BY NC ND See: LICENSE.md

MicroCanvas®, IMM-P® and VIF are proprietary methodologies of Doulab.