The local start-up scene is short of anything but HOT – there's no short of investors and venture capitalists, government grants, networking events and start-up websites and channels loaded with up-to-date start-up and funding news, and all these, within a short span of a few years.
While government efforts at keeping Singapore as the best place on earth to do business definitely helped, a lot has to do with the ease with which local businesses get their funding.
Raising capital to start your own business used to be one of the most difficult aspects of striking out on your own, but with an investment-savvy crowd and a great investment environment drawing angel investors and venture capitalist here, the market is seemingly
How Local SMEs Get Funding
Some of the most successful local SMEs that succeeded within a short span of 5 years used alternative ways to fund their business.
This is a major difference from the traditional way of starting out – using own funds, borrowing from family and friends or seeking bank loans
With the advent of technology, it has become much easier to get the word out and to market your products so that one can easily acquire investors who might be interested in your business ideas.
Such new ways of funding include Angel Investors, Venture Capital, or Alternative Financing.
Angel Funds: Financing provided by an affluent individual (angel investor) that provides capital for a business start-up in exchange for ownership equity. Angels typically provide capital funding with their own funds.
Venture Capital: Funds provided to seed early-stage, emerging and emerging growth companies. Singapore is starting to see trends of financing platforms raising funds for these SMEs by offering investors a chance to take part in their funding.
In Singapore, it's not uncommon to find some companies funded by both venture
Alternative Financing: Includes Crowdfunding or Business Financing methods such as Invoice-Financing.
Crowdfunding continues to be popular for funding new projects and as a way to test the market demand as well, via an online platform to crowdfund from individual investors
There are many different types of returns, depending on the type of Crowdfunding but investors can expect returns in terms of equity, interest payments or even donate to a social cause with no expectations of returns.
How Successful SMEs Raise Funding In Singapore
Venture Capital & Angel Investors
Year Started: November 1, 2011
Funding Method: Venture & Angel Investor, including Facebook
Total Funding received: $55.1
Business Description: RedMart is a Singapore-based online supermarket that delivers groceries and essentials to your home.
Year Started: April 1, 2012
Funding Method: Venture Capital and Corporates, including big names like Rocket Internet and investment bank Goldman Sachs
Total Funding received: $218
It is called
Year Started: January 8, 2014
Funding Method: Venture Capital and Angel
Total Funding received: $2.16 m
Business Description: 99.
Year Started: 2013
Funding Method: Venture
Business Description: Paktor means ‘going on a date’ in a Chinese dialect and the company
Alternative Business Financing
Year Started: 2013
Funding Method: Debt-based crowdfunding where funds were raised via a platform only to accredited and institutional investors
Total Funding received: $660,000 in 3
Business Description: MEZZO Interiors
Year Started: 2012
Funding Method: Debt-based crowdfunding from individual
Total Funding received: $750,000 in 3 tranches
Business Description: Leap Networks
Year Started: December 2010
Funding Method: Invoice Financing
Total Funding received: $410,000
Business Description: Acepro provides a range of security services such as guarding services, security consulting,
Using invoice factoring has helped them to improve their cash-flow greatly and stabilize the operations of their business, helping them to double their year-on-year revenue in an annual amount of S$12 million per year.
As seen from the above examples, funding plays an important role in the success of SMEs and startups in Singapore. While there are many ways to get funding, be it Government Grants for SMEs or Business Financing, business owners will need to examine their goals in order to choose the best way to fund their operations.