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How Should a New Startup in Singapore Find Funding?

Singapore offers entrepreneurs a favorable environment to conduct business. Some of the factors that make the environment desirable include friendly taxation systems and incentives, government support, and availability of a skilled and experienced workforce, among others. Furthermore, several funding options make it easy to start and run business in the island state.

Here are some methods of how a startup can find funding in Singapore:

Government funding

The Singaporean government is keen to support entrepreneurs and has initiated several financing schemes as well as platforms for businesses funding. The goal is to promote entrepreneurial activity. Every government funding program is aimed at a particular market or sector or industry. They are also applicable for various stages in the life of the businesses. Some of the channels through startups in multiple areas can get funding include:

  • Technology Enterprise Commercialisation Scheme (TECS)
  • ComCare Enterprise Fund (CEF)
  • The New Initiative Grant (NIG)

Angel investors

Angel investors are private investors who, other than investing capital, contribute their skills and expertise in startups that are in their early stages in return for a substantial share in the business. These investors usually are highly accomplished entrepreneurs and high net-worth individuals (HNWI) who seek out high-risk ventures but with chances of giving high returns on investments. Businesses primarily get angel investors through their existing networks as potential investors rely on referrals or word of mouth to filter out deals that may be worthy of putting their money and skills into.

Businesspeople with interests in forming businesses in Singapore to take advantage of these funding options can look at this official source of information on incorporation and registering to learn how to go about it. They can also engage these experts in incorporation and immigration matters to assist them in the business registration and incorporation process.

Venture capitalists

Venture capitalists are professional investors who put their investment in startups provided that they are allowed active participation or hands-on roles in the business so that the companies are profitable. Besides injecting cash into the startups, they offer technical support on operations and ensure that the companies they invest in are generating profits.

Typically, venture capitalists favour businesses that are in such sectors like IT, biotechnology, intellectual property creation, and scientific breakthroughs, among others. Singapore has a relatively smaller venture capitalists market than the US and Europe, but it is still a great funding option. These investors include large corporations, people with high net worth, and even government bodies.

Crowdfunding

With crowdfunding, businesses or projects source for modest contributions from a huge group of people. There are several crowdfunding platforms in Singapore that startups can use to raise funds to start. Some of these platforms include Funding Societies, Indiegogo, and Kickstarter. The crowdfunding idea is not just used in the Lion City, but it is also very popular in the US. This is where small business owners present their business ideas and strategies online intending to inspire large groups of people to help and pledge money to make the business idea see the light of the day.

Conclusion

There are several funding options for startups in Singapore and include venture capitalists, angel investors, government funding through various schemes and platforms, and crowdfunding. Entrepreneurs can also seek loans from banks and credit unions or even use private sources like savings or borrowing from friends and relatives, even if it is in exchange for shares in the business.

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