Capital Raising In Singapore
Capital raising is not an easy thing to do. If you love adventure, you might treat it like one. There are so many things you need to think before you actually start chasing an investor. The most important of all is the type of capital you are looking for; either you fund your startup with your own savings or you can approach your near and dear ones or the bigger entities like the angel investors and the venture capitalists.
These days, Singapore is witnessing great elation in its startup ecosystem owing to the entry of large number of global venture capitalists in the city-state who are eagerly waiting for potential startups to come up with lucrative investment options for them.
Here are some of the vital points you should know about capital raising in Singapore:
- The most common capital raising options in Singapore are personal fund, friends and relatives, government funding, angel investing and venture capital financing.
- The government of Singapore is highly active about boosting the entrepreneurial industry for which it has started many initiatives and block projects.
- The initiatives started by the government agencies in Singapore are government-aided equity financing schemes, tax incentives, ash Grants, Business Incubator Schemes and Debt Financing Schemes.
- The government-aided equity financing schemes include SPRING SEEDS (Startup Enterprise Development Scheme), BAF Scheme, (Business Angel Fund Scheme) and EVFS (Early-stage Venture Funding Scheme).
- Some of the popular cash grants backed by the Singapore government include iSPRINT, ACE startup scheme, Comcare Enterprise Fund, iSTART ACE Scheme, etc.
- The angel investors in Singapore are a significant source of fund for the startups. They not only provide capital but share invaluable knowledge, provide mentorship and guidance to the startups. Their main aim is to boost the potential startups and help them gain a successful position in the market which they do in exchange of equity share in the startup.
- The individual angels in Singapore typically invest between S$ 25,000- S$ 100,000 while the angel networks invest between S$ 250,000 – S$ 750,000.
- The angel investors prefer to invest in high-potential startups with a unique business idea with great competitive edge that ensures good returns for the investors.
- The venture capital industry is still new in Singapore. However, the government initiatives are inviting more and more foreign investors to set up their branch offices in Singapore.
- The venture capitalists, just like the angel investors, invest in unique business ideas targeting a sizable and scalable market. Their main aim is to make huge profits although they too offer guidance and mentorship apart from capital.
- Usually, the VCs choose to make late-stage investments as they want to reduce the risk associated at the seed-stage.
- The VCs look forward to a return of almost 25-30 percent on per year’s investment.
- The investment tenure of the VCs is usually 2-3 years.
- Before investing, the investors thoroughly studies the management team of the investee company and only after being satisfied with the talent, knowledge and smartness of team, they get ready for the investment.
- The venture capitalists in Singapore mainly invest in high-tech, manufacturing and the services industry. Among the other important sectors are biotechnology, cleantech, genetic engineering, etc.
- Private equity funding options in Singapore are offered by the banks, financial institutions and investment companies.
- The private equity funds are, typically, meant for the established companies. Unlike the angel investors and venture capitalists, the private equity funds do get involved in the company’s management affairs and therefore do not offer any guidance or technical expertise.
- The various types of private equity funds include corporate funds, independent funds and institutional funds.
Getting access to the right investor is often a time-taking task. Singapore, being a leading destination for doing business, has ample scope for startups but you still need to find the right track through which you can find the right investor without wasting much time and effort. To do so, it is highly recommended for you to become a part of an intelligent network that instantly connects you to the business partner you are looking for.
Merger Alpha is such a network operating in Singapore that provides a common platform to buyers, sellers, investors and financial advisers of the startup industry. It becomes easy for all to get and remain in touch with each other through the network and keeps themselves updated with the latest trends in the industry.
For more information on capital raising in Singapore, feel free to visit Merger Alpha http://mergeralpha.com/.