Nine months after Chinese billionaire Jack Ma announced he would set up a start-up fund to help Hong Kong entrepreneurs, Ma’s Alibaba finally kicked start the HK$1 billion initiative on Thursday. However, the Hong Kong Entrepreneurs Fund has been criticised for its “unclear guidelines and prolonged application process.”

Alibaba said the fund is not for profit but it is also not a charity. Start-ups applying for the fund are required to use at least one of the Alibaba Group’s e-commerce platforms, products and systems. Also, most founders must be Hong Kong permanent residents.

No funding limit for projects has been provided and, other than an email address, it is unclear how entrepreneurs can apply.

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Jack Ma. Photo: Tencent News.

At the launch ceremony on Thursday, Alibaba vice-chairman Joseph Tsai announced venture capital firm Gobi Partners will be handling the applications. The firm is tasked with finding and examining potential young companies and entrepreneurs as well as negotiating the investment amount and equity ownership with them.

The fund can take up to half of a start-up’s equity, which some found to be a deterrent, according to a report by the Hong Kong Economic Journal.

The HKEJ compared the Hong Kong Entrepreneurs Fund with two other start-up funds available in Hong Kong, which only take zero to 20 percent of shares from the funding recipients.

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Chinese online retail giant Alibaba founder Jack Ma smiles as he waits for the trading to open on the floor at the New York Stock Exchange in New York on September 19, 2014. Photo: AFP/Jewel Samad.

The report also said angel investors usually ask for ten to 25 percent of shares from the start-ups they fund, citing Samson Tam, chairman of the Hong Kong Business Angel Network.

Simon Loong, founder of digital banking start-up Welab, told HKEJ Hong Kong entrepreneurs are unlikely to give up half of their companies’ ownership unless they want to use Alibaba’s name to promote their business in mainland China.

Alibaba has also set up an NT$10 billion (HK$2.38 billion) entrepreneurs fund in Taiwan.

HKFP has reached out to Alibaba for comment.

Vivienne Zeng is a journalist from China with three years' experience covering Hong Kong and mainland affairs. She has an MA in journalism from the University of Hong Kong. Her work has been featured on outlets such as Al Jazeera+ and MSNBC.