Broadly, there are three major options for capital raising in Singapore: friends and family, government funding and private equity funding.
Friends and Family
Although it often remains a topic of debate, there are still examples where entrepreneurs have greatly benefited from approaching their friends and family to seek capital for setting their business off the ground. The only red signal is the risk of bitterness that sometimes crops up in relationships in case there is any sort of dishonesty or injustice.
The best thing entrepreneurs can do is not to mix their professional bond with the personal. Also, the financial matters in such partnerships should be dealt with extreme care so as to ensure that there is no scope for any kind of annoyance.
The government of Singapore is also actively working on boosting the startup ecosystem for which it has already started quite a few initiates such as the SPRING, MDA i.Jam and the NRFTIS (national Research Fund Technology Incubation Scheme).
Moreover, the government is striving to push the infrastructural developments for the entrepreneurs and has started many startups support services in the country. The Block projects initiated by the government are meant to fulfill the entrepreneurial requirements and give them ample scope and space to set up their potential businesses.
Private Equity Funding
Private equity funding comes from the private investors like angels, venture capitalists, banks and other organizations. A time comes when funds from the informal sources are no more enough to generate further growth of the company and that’s the point where entrepreneurs need to seek private equity funds.
Over the last few years, the numbers of angel investors and venture capital firms have significantly increased in Singapore. These investors support the high-potential startups with an aim to get a good return on their investments which is usually 25% to 30% for each year’s financing.
Usually, the angel investors in Singapore come forward for the seed-stage investment in startups while the venture capital firms prefer to invest in the second or third rounds, although for a unique business idea, the VC also can get interested at the seed stage financing.
The venture capital firms in Singapore are more interested in technology, service and manufacturing sectors and invest hugely on businesses looking for capital raising in Singapore.
Some of the most popular venture capital firms in Singapore are JFDI.Asia, JAFCO Asia, Innosight Ventures, Gobi Partners, Ardent Capital, Jungle Ventures and others.
Capital raising in Singapore has become a very lucrative strategy today. The favorable government policies and the presence of numerous private investors have altogether created a very sound atmosphere for the startups to flourish. For entrepreneurs planning to raise fund in Singapore, the best step is to increase their networks so as to get closer to more number of people and ultimately find someone who can introduce them to a potential investor.
For further information on capital raising in Singapore, entrepreneurs can also become a part of Merger Alpha – an intelligent network that brings together buyers, sellers, investors and financial advisors under one roof. Feel free to get in touch with us at http://mergeralpha.com/