Capital raising in Singapore or any other part of southeast Asia is very different from that in the Silicon valley or rather, we can say it is comparatively much harder in Asia. The reason is the lesser number of venture capital firms and other institutional investors across Asia which makes it quite difficult for entrepreneurs to find a suitable investor for their startup.
However, when it comes to capital raising Singapore in particular, the entrepreneurs have many different options to choose from. Money is there is the market but entrepreneurs need to identify the capital raising option that suits their business perfectly. Once they choose the right path with a unique business plan in mind, finding the right investor is not so tough.
Many entrepreneurs have long tried to chase the VCs in the Silicon Valley but, unfortunately, those investors prefer to invest in ventures that are easily accessible from their offices. Naturally, many have ended up wasting their time in this endeavor and now, have turned their heads towards the local investors in Singapore or the international VC firms that have a base in the city-state.
The Singapore government is currently very active regarding attracting investors in the city-state to boost the entrepreneurial ecosystem. It has launched many initiatives such as cash grants, tax incentives, debt financing and government-aided equity financing schemes to attract venture capitalist from around the world.
Today, there are numerous small and big venture capital firms in Singapore that are eagerly looking for lucrative business ideas to invest in. Some of the top firms include Adam Street Partners, Digital Media Partner, Extream Ventures, JFDI.Asia, JAFCO Group, Singtel Innov8, Intel Capital, Gobi Partners, TNF Ventures, GGV Capital and many others.
Entrepreneurs only need to fulfill all the criteria and arrive in front of the right investor at the right time. For capital raising in Singapore, they can have access to many government-backed or private equity financing options like Angel Investors, venture capital funding and private funds.
Angel investors are typically, wealthy individuals who prefer to invest in high-risk start-ups usually at the early stage. They invest the capital in exchange for a small equity share in the company and their expected ROI is comparatively lesser than that of VCs. They tend to promote the high-potential startups and take them to a position where they can start earning huge revenues and also provide a valuable products/service to the society. Angel investors can either operate individually or as a part of an angel network.
Venture capitalists, on the other hand, are professional investors who typically invest in high growth startups just like the angels but with the difference that the amount of capital they usuallu invest is comparatively much higher than any other investor. Apart from offering capital, these investors also provide the investee company with guidance and mentorship. They also share their contacts with the company so as enable them to expand their networks and learn new business strategies from the management and financial experts.
Then there are the private funds that include banks and financial institutions. Unlike the angels and VCs, these investors do not get involved in the investee company’s management affairs. All they do is, invest and then wait for a good ROI. They usually invest in the ventures that are already established as they do not prefer to take the risk of investing at an early stage.
Now, depending upon their type of business, industry sector, and stage of development, entrepreneurs can choose a suitable investor for capital raising in Singapore. The basic things they need to have before approaching the investors are – a unique business idea, a sizeable and scalable market, a smart and efficient management team, a great business model, a sound value proposition and the right attitude.
If you are also one of the entrepreneurs looking for a suitable investor in the city-state, feel free to visit Merger Alpha http://www.mergeralpha.com/ for more information.
Also, do share your thoughts and experiences regarding capital raising in Singapore in the comment box given below.