Frequently Asked Questions
Our calls for startups are open to citizens of European Union (EU), European Free Trade Association (EFTA) countries and European Union Candidate Countries.
Remember that even if you are not a Maltese citizen you must still register your startup as a business undertaking in Malta, typically a partnership or a company.
Yes, this is possible as long as the startup commits to register itself as a business undertaking in Malta, and at least one co-founder is in Malta to follow programme activities organised by the MIH, in line with the Startup Responsibilities and Social Impact Agenda in the Letter of Award.
At least two members of the startup must be co-founders of the startup, one of whom must be present on location to follow the programme.
The solution representing the business idea must be based or delivered using digital technology at its core. For example, a business idea based on an artifact that solves a particular problem or a service using technologies other than digital, would not be considered a digitally enabled business idea. On the other hand, if the startup has conceived a new service which is delivered using the Internet or other new or known digital technologies, then that would qualify it as a digitally enabled business idea
Shortlisting, coaching and pitching
After the pre-acceleration bootcamp each team is expected to pitch their proposed idea and concept to a panel of judges before all the other competing startups to be selected for acceleration. The pitch may be open to a restricted audience of mentors and other stakeholders invited by MITA. Pitch day is therefore the event when all the startups take their turn at pitching before the judging panel. Each pitch will last five minutes followed by a question-and-answer session. To avoid the confusion of conflicting formats, startups will be informed what presentation software to use (typically PDF or Google Slides) deliver their pitch to the judges.
Applications are first checked against the Eligibility Criteria and then evaluated against the Judging Criteria to pre-select up to 25 applicants with the highest score for more in depth evaluation and eventually shortlisting. Both types of criteria can be found in the Call Guideline.
The process of pre-selection and shortlisting is designed to facilitate the final selection process due to the sheer number of applications usually received.
The founders will be asked to attend an online interview to allow the MIH team to get to know the team and startup project better, the technologies used, how have they validated their business idea, whether they already have a prototype, etc.
Eventually a shortlist of up to 15 startups will be asked to attend a bootcamp on location consisting of a number activities, workshops and information sessions. During the bootcamp the teams will be asked to pitch their idea before the rest of the cohort, and a coach and mentors to give them feedback in preparation for their final pitch to be accepted to YouStartIT. There may be other support activities covering legal requirements of formalising into a business undertaking in Malta, opening of bank accounts, IP, etc.
Participating in the above activities is mandatory if you want to be considered for the YouStartIT accelerator. Teams that do not participate in the bootcamp will not be allowed to participate in the final pitch, which is generally held a day or two after the bootcamp. Only in exceptional circumstances will the MIH consider remote means to allow a team to engage in this process. And in such circumstances the MIH will not accept any responsibility for failing connections or other technical and non-technical limitations that may hinder the engagement and its outcome.
The judging process is done by staff from the MIH but may involve external judges, typically experienced entrepreneurs, investors or mentors.
Intake Stage (acceleration)
The Social Impact Agenda has been designed to ensure startups return some value to the local startup ecosystem and help make it more vibrant and dynamic. In brief, you should ensure to organise a sufficient number of activities to collect enough points that will entitle you to receive the full payment of the final instalment of €8,000. The rules are clearly explained in Appendix C of the Letter of Award.
Yes, the startup may, at its discretion, source external help to build its prototype or other supporting activity. When employing or contracting external resources it is mandatory that the startup follows the relevant legal process. Selected startups should keep a record of all costs incurred, including receipts and invoices. The startup must ensure that any IP developed by third parties on its behalf is formally and unequivocally assigned to the startup, and it does not infringe any IP laws. The startup founders should be aware that the cash grant constitutes the only disbursement of funds made available for their startup project.
Yes, the startup will always own the IP and is free to commercialise it once it succeeds to realise its entrepreneurial vision. Subclause 7.2 of the Letter of Award is a safeguard to ensure that in cases when the prototype of the product deployed is similar or common to services already provided by public administration or government organisations (e.g. education, healthcare, public transport, etc), and the startup disbands or goes out of business, any benefits that accrued from the product being experimentally deployed can continue to be maintained and extended.
In such circumstances MITA or the Government of Malta would be able to commission a third party to continue to maintain or extend the functionality of the launch version of product on their behalf. However, the startup shareholders will still retain legal title to the IP.
In any case if the startup is submitting an application that is not related to government or the public sector, this clause will be deleted prior to signing of the Letter of Award.
The MIH reserves the right to stop the project at any stage (clause 14 of the Grant Terms and Conditions) with one month notice. Furthermore, clause 11 of the same lists a number of reasons why this could happen (subclause 11.1). These are safeguards to ensure that the startup is serious and well meaning in its intentions, and that therefore the funds are spent judiciously. If the proof-of-concept or MVP fails to achieve its objectives due to factors or circumstances beyond the startup’s control, and MITA is satisfied that there are no circumstances which point to any of those listed in subclause 11.1 (1) to (8) (e.g. negligence, fraud, dishonest misconduct), then there is no reason why any costs incurred until termination, should not be disbursed to the startup.
MITA is a government entity and, as such, is disbursing tax-payers’ money for which it is accountable like any other government organisation. MITA therefore cannot disburse funds to be used for purposes other than for building and developing the project and for helping the startup achieve its entrepreneurial vision. If in the opinion of MITA, the startup is acting in a fraudulent manner, is ill-intentioned, negligent or risks casting MITA in disrepute (refer to the list of reasons (1) to (8) in subclause 11.1), MITA can terminate the project, and if the circumstances so warrant even request a reimbursement of any funds paid out. We also strongly recommend that the startup keeps, as evidence, a record of all justifiable expenses incurred, and a log of all the time and labour effort contributed by the startup founders to develop the project.
Missing or not attending a meeting or planned activity of the MIH is technically a breach of your contracted Startup Responsibilities. Missing more that two such events without prior written approval of the MIH may lead to automatic termination of the agreement and forfeiture of all or part of the remaining balance of the cash grant as per subclause 11.1.
We cannot advise you and cannot assess where you are with your project milestones if you do not update us on progress, so you will be asked to report on your activities using specific project/task management tools in use by the cohort and as directed by the MIH management team. We also expect that a project of complexity as a business venture cannot be adequately controlled and managed by the startup without some degree of structure and measure.
The reporting demands we mandate are not onerous, and if your reports are clear and meaningful, it could be sufficient to just give us online access or a copy of what you already keep.
You should be aware of the reporting obligations specified in paragraph 5 of the Letter of Award, particularly sub-paragraphs 5.2, 5.3 and 5.4. The details we ask for are details you would normally have to submit in your personal income tax (partnership) or corporate tax returns (company).
The MIH has its own in-house mentor who is an experienced startup founder and entrepreneur who, besides advising and meeting you on a one-to-one basis, will be involving external mentors from within our network. The latter are normally involved either systematically during our cohort meetings, or during separate ad hoc sessions.
Should you have any special requirement we will use our best endeavours to provide any extraordinary support or mentorship needed in specific areas or competences.
Developing a prototype (typically your Minimum Viable Product) is an opportunity for you to learn about the problem you wish to solve, learn about the customer and the selected market niche. Ensure you are realistic when designing the prototype. It may therefore pay you to focus only on those key features which will enable you to get the feedback that you need to test your assumptions and stop you from investing effort for nothing. Then as you go along you may want to start adding new features using rapid prototyping approaches.
We may ask you to indicate what features you wish to develop to help you rationalise the effort that you may want to put in. Bear in mind that if you want to be serious about executing your business idea you would be expected to put in at least 20 hours a week into your YouStartIT project.
Of course the larger the team, the better, but by asking for at least two co-founders we are ensuing that the startup has sufficient capacity to complete its proof-of-concept within a short timeframe, usually 16 weeks. Besides we would like to ensure there is a minimal degree of multi-disciplinarity and complementarity of skills within the team in order for it to be credible.
Administrative and Financial
Yes, the grant is taxable and must be included in the personal tax returns for startups trading as Partnerships or Sole Traders. If the startup is a Limited Liability Company, company tax laws will apply accordingly, and it is best that you seek advice from your accountant.
A General Partnership, typically en nom collectif, registered with the Malta Financial Services Authority, is the closest equivalent to a Founders’ Agreement in which a startup would normally state crucial understandings such as contributions to the partnership, ownership of background and foreground IP, early exits of partners (vesting), decision taking, authority, etc. This is vital to avoid and safeguard the partners from any future disputes, which are not infrequent in risky ventures of uncertain outcome. However, if later the startup’s business idea succeeds and gains traction, and the team wants to raise further funding through angel investment, then incorporating into a Limited Liability Company is the best way to go. One of the main advantages of a Limited Liability Company is the increased financial security, since shareholders will only be liable for any debt the company accrues in a manner proportionate to their individual investment and no more.
Early stage startups may wish to consider a General Partnership to first test their product on the market and gain some traction while still being able to trade and do business legally, without having to incorporate into a Limited Liability Company, and subsequently incur unnecessary and onerous dissolution costs should their idea fail. However, there may still be some costs incurred to convert an undertaking from a General Partnership to a Limited Liability Company.
In any case the MIH will connect you with corporate services providers who are able to advise you to take the best decision in your circumstances, as well as assist you in the process of formalising into either a General Partnership or a Limited Liability Company.
Only in exceptional cases will the MIH consider a Sole Trader as a form of business undertaking.
Yes, provisionally, all co-founders need to sign the Declaration Of State Aid. If the startup is already formalised as a Limited Company, however, the legal representative(s) (of the company) signature is enough.
Expect a turnaround of usually not more than 15 days from the day the payment request is approved by MITA’s Finance Department. Payment request templates are available in your shared folder made available. The MIH management team will inform you if there are issues in the documentation presented. Typical cases of documentation that is found not to be in order include (i) a Business Plan that pre-dates the Interim Test Report – this would mean that the outcomes of the tests did not inform your Business Plan (ii) no explanation of context to the tests (iii) no evidence of ownership of IP by the startup (iv) the issue of a payment request not signed by the authorised representative (vi) missing evidence of the prototype or MVP itself.
The Letter of Award articulates how the cash grant will be disbursed, namely:
A. €2,000 one month from signing of the Letter of Award and presentation of a power of attorney authorising the Project Co-ordinator to accept the payment on behalf of the startup; this step has been introduced to offset the eventuality of a longer process needed to open a bank account.
B. €2,500 upon completion of formalisation into a business undertaking and opening of an active bank account; if the startup is already formally registered as a business undertaking step A can be skipped and the startup can immediately request the disbursement of €4,000.
C. €7,500 upon submission of an Interim Test Report or other document as agreed in your plan with the MIH. The report would represent documentary evidence of your tests carried out to your product prior or post launch.
D. €8,000 upon completing the Final Report which should include the outcome of tests and user feedback, as well as a background of the project, a high-level description and diagram of the main architectural components, lessons learned and any recommendations for future work. You may also have to submit your updated Business Plan (or an equivalent business document such as a marketing strategy) if you already had one to reflect the outcomes of your project. The amount disbursed will depend on how many points your startup has collected in the Social Impact Agenda (SIA), or whether you have missed any programme meetings or activities. Ensure you understand how the SIA works by reading Appendix C of the Letter of Award.