What is the most important source of money for new business start-ups?
Singapore is a very attractive place for entrepreneurs to set up a business. Besides the low tax rates and the ease of doing business, another important factor that attracts entrepreneurs from around the world to the country is the multiplicity of financing sources for startups. This article will introduce you to the private and government sources of funding for startups.
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If you decide to incorporate your startup in Singapore, the government offers several attractive grants and funding schemes that help grow a business through its various early stages. In addition to the government support, there are many angel investing networks, venture capital firms, private equity firms, startup incubators and accelerator programmes that assist entrepreneurs in raising capital. Latest news: Is Singapore the right place for launching your startup? 2019 survey results. Government SchemesGovernment agencies in Singapore provide the following cash grants and equity financing schemes to local startups in the country; startups are eligible for these grants and schemes on the basis of qualifying criteria set by the government. Startup SG The Standards, Productivity and Innovation Board Spring (SPRING) has consolidated its previous startup assistance schemes under one program which is now called Startup SG. The goal of Startup SG is to provide Singapore-based startups with access to funding sources and mentorship programs and thereby help turn innovative business ideas into thriving companies. Under Startup SG, qualifying startups can access cash grants, equity financing, and business loans. The following provides an overview of the funding programs offered by Startup SG: Startup SG Equity Startup SG Equity is an investment fund managed by SPRING Seeds Capital and SGInnovate. Under the Startup SG Equity scheme, the Singapore government will co-invest with 11 private investment partners in startups that require significant capital expenditure and may take longer to be commercially viable. For startups that are improving existing technologies, the Singapore government will provide 70% of the funding in an initial investment round of S$250K. Thereafter, the Singapore government will invest S$1 for every S$1 invested by private investors up to a cap of S$2 million. For startups classified as “deep tech”, the Singapore government will provide 70% of the funding in the initial round investment of S$500K. Thereafter, the Singapore government will invest S$1 for every S$1 invested by private investors up to an investment cap of S$4 million. The Singapore government describes deep tech companies as developing products based on scientific or technological breakthroughs that are unique, differentiated and hard to reproduce. Typically, the technology a deep tech startup is developing is the result of years of research and lab testing and, requires a longer period to reach market viability. To qualify for Startup SG, startups must meet the following requirements:
For more on how to apply, please see the Startup SG Equity page. Startup SG Tech This grant provides project funding for local Singapore companies to develop breakthrough technology that can disrupt current markets or create new markets. With Startup SG Tech, companies will receive funding for both Proof-of-Concept (POC) and Proof-of-Viability (POV) projects. POC projects, which are designed to test the technical and scientific viability of a new technology, can receive funding of up to S$250,000. POV projects designed to test the commercial viability of a lab-proven technology can receive up to S$500,000 in funding. Furthermore, to qualify for Startup SG Tech, companies must meet the following requirements:
Startup SG Tech offers cash grants to companies in the following industries:
For more on how to apply, please see the Startup SG Tech page. Startup SG Founder The scheme was developed for new entrepreneurs with innovative businesses. Startup SG Founder provides up to S$30,000 by matching S$3 to every $1 raised by the startup. Along with funding, entrepreneurs also receive mentorship and business guidance from Singapore-based incubators. The program is open to Singapore citizens and permanent residents. To be accepted into the Startup SG Founder program, first-time entrepreneurs must apply through an Accredited Mentorship Partner (AMP); these include:
To receive the grant, the first-time entrepreneur must adhere the following conditions:
To learn more on how to apply, please see the Startup SG Founder page. TABLE OF CONTENTSRELATED ARTICLES
Startup IncubatorsThe following are Singapore government accredited incubators:
Angel Investing NetworksAngel investors are high net worth individuals who invest in startups at their seed stage. These investors (known as “angels”) invest in companies despite no proven success of the company’s business model. The investors invest either individually or as a group. This funding source is advantageous to startups that do not have a final business model and require quick access to capital. In Singapore, the angel networks include the following: Business Angel Network South East Asia (BANSEA) BANSEA is an angel investment network that was established in 2001 in Singapore. It organises conferences, workshops, etc to promote the angel investing network in Asia. BANSEA’s mission is to facilitate investment opportunities for members in early stage startups. BANSEA is open to entrepreneurs who have a great idea and require funding to establish themselves. Business Angel Scheme (BAS) SPRING SEEDS supervises the Business Angel Scheme (BAS) which is an equity investment scheme for Singapore-based enterprises. SPRING SEEDS partners with angel groups to invest in innovative startups. SEEDS invests a dollar for a dollar up to a maximum amount of S$1.5 million. The business angel group and SEEDS will take an equity share in the startup in proportion to their investment. Singapore Angel Network (SGAN) Singapore Angel Network (SGAN) is the investment arm of Thakral Group of Companies in Singapore. SGAN invests in startups usually at the later stage of their finance requirements. This angel network does not target any specific industry and invests in various business sectors in Singapore and other countries as well. Venture Capital FirmsVenture capital funding is often suitable for startups or late stage businesses that have a large capital requirement. Following are the venture capital firms that invest in Singapore startups:
Private Equity FirmsPrivate equity investment refers to an investment made by a firm to acquire ownership of a non-public business. These firms usually invest in profitable companies which are in a high-growth stage. Private equity firms in Singapore include the following:
ConclusionThere are many venture capital firms, private equity firms and angel investing networks available to entrepreneurs in Singapore. In addition, the government of the country has launched many schemes and grants that facilitate the growth of startups in Singapore. Singapore being one of the best places in the world to do business, has access to investors not only from Singapore but from other parts of the world. For instance, venture capital firms such as 500 Startups, Golden Gate Ventures, Sequoia, etc also invest in Singapore startups. Singapore has emerged as a key startup hub in Asia because of its pro-business environment, efficient legal system, and stable political system.
StartupDecisions.com.sg is an educational resource for businesses interested in registering a company in Singapore. It’s powered by CorporateServices.com — a leading Singapore-based corporate service provider that offers a range of services for private limited companies in Singapore. Services include:
Our team of experienced experts provides these Singapore incorporation and other related services through our cutting-edge online platform. Whether you’re looking to set up a Singapore holding company or a , we can help you design the right structure for your business. You’ll get a custom solution that is tailored to your unique situation and delivers protection, privacy, risk mitigation, tax optimization, and operational efficiency. Contact us if you need assistance with setting up a new Singapore company or would like to transfer the administration of your existing company to us. What is the most important source of funds for new business?Bank loans are the most commonly used source of funding for small and medium-sized businesses.
What is the best source of funding a startOverview Of Top Funding Sources To Grow Your Startup. Personal savings. Also known as self-funding, is the first stop on the entrepreneurial journey for many startups. ... . Bootstrapping. ... . Friends and Family. ... . Accelerators & Incubators. ... . Crowdfunding. ... . Grants. ... . Angel Investors. ... . Venture Capital Fund.. What are the 3 sources of a startVenture capitalists, angel investors, and traditional banks are among the sources of startup capital.
What is the most common source of startMost entrepreneurs find money through banks, private investors (friends, family and business associates), suppliers, customers or professional angel investors. The source you choose determines how you raise the money as well as how you pay it back.
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