The Hanoi Venture Capital Fund (HVCF) will debut on December 22 with up to VND600 billion (US$24 million) in public seed capital, marking the city’s first venture-capital vehicle and a major push to attract private investment into priority technology sectors.

Designed under a public–private partnership model, the fund limits state ownership to 49% to ensure market-driven governance and international-standard risk-sharing.

Win-win structure

The HVCF is structured through a business cooperation contract without establishing a new legal entity, a design choice that gives the fund market agility comparable to global VC models.

Hanoi leaders have stressed that the capital will not act as a supervisory authority standing above investors but as an equal partner in a win-win structure.

Separating the fund from administrative thinking is seen as essential for building trust with domestic and foreign investors.

The city commits to avoiding a state-power mindset in daily operations and will instead follow modern, transparent governance aligned with international practice.

The state capital representative will be at the department-director level to ensure accountability while maintaining independence in investment decisions.

Under the proposal, the budget will contribute no more than 49% of charter capital, or up to VND600 billion (US$24 million), with the rest provided by up to six strategic investors.

This structure prevents the state from holding a controlling share and encourages private capital to join early. Limiting the number of investors also keeps governance focused and allows the fund to hire a professional fund manager consistent with global standards.

The venture-capital model has been well received by experts and businesses. Le Thanh Son, Vice Chairman of CMC, recalled a 10% stake the group took in CMC Telecom in 2016 when cloud computing was still in its early stage. After five years, selling half of that stake generated about VND100 billion ($4 million) in profit.

“CMC stands ready to join the Hanoi Venture Capital Fund to help advance Resolution 57 on science, technology and innovation,” said Son.

Nguyen Duc Thien, Vice Chairman of Elcom, shared a similar experience from the company’s investment in VinaGame in 2016. A five-year partnership with a 5% stake produced strong returns.

Based on that track record, Elcom is ready to join the HVCF with no less than a 5% contribution to support technology firms and smart-city projects in the capital, he noted.

From an investor’s perspective, Hoang Duc Chung, Director of VinaCapital Ventures, said Hanoi’s effort to build a venture fund that follows international norms is a rare opportunity. He noted that the 49% cap on state capital should be explained clearly, especially if some investors are not yet ready to participate.

Catalytic capital

The establishment of HVCF is seen as a strategic step to solve the most difficult challenge for startups and tech firms: early-stage funding.

Despite Hanoi’s strong base of research institutes, universities and tech companies, the number of active venture funds in the city still lags behind its potential. Many startups cannot cross the “valley of death” when their products are not yet mature and revenues remain too small to attract private investors.

The HVCF is expected to serve as catalytic capital to unlock this bottleneck. Instead of subsidizing businesses, the budget plays a signaling role that builds market confidence. When the state shares risk with companies and investors, private capital is more likely to come in, creating a new strategic asset class for Hanoi.

The fund plans to invest in 13 priority sectors that reflect the city’s most important technology pillars, including education, biomedicine, healthcare, transport, smart urban development and high-potential science and technology fields.

The pilot period will last up to ten years with a mid-term review after five years and a final review at the end of the tenth year.

Deputy Chairman of the Hanoi People’s Committee Truong Viet Dung said the city is ready to commit 49% of capital, which is higher than the usual safety threshold, to reinforce trust and demonstrate leadership.

“However, the city will not accept investors who lack capacity, long-term vision or who seek only short-term gains. What matters most is the spirit of partnership and the shared goal of building a venture model that meets international standards and can shape the market,” he continued.

Former Minister of Science and Technology Nguyen Quan said that without venture capital, it is difficult for Vietnam to build large-scale tech companies or breakthrough products.

He sees Hanoi’s decision to pioneer an internationally aligned venture fund as a positive signal, especially as the Law on Science, Technology and Innovation now provides a legal basis for venture-capital activity for the first time. This gives local governments the framework they need to pilot new models such as the HVCF.

The city aims for more than financial returns. Its broader goal is to create a new engine for growth and reinforce Hanoi’s position as a regional innovation hub.

“Once in operation, the fund will provide startups, tech firms and researchers with both financial and non-financial support such as training, advisory services, international connections and commercialization pathways for science and technology products,” Quan stated.