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Singapore has become one of the most attractive countries for investors to set up a business because of its business-friendly policies and supportive ecosystem for startups. The Singaporean government has shown their support for new businesses by offering grants and funding to help startups grow during their early stages of business. In the following guide we have listed the different types of startup grants and funding.
Incubators
In Singapore, incubators for funding for startups are available. Business incubators are programs designed to help startups grow by providing mentorship, technical assistance, funding, and legal and financial advice. Some of the incubator options available in Singapore are Spaze Ventures, JCS Venture Lab, NUS Ventures, QuestVC, TBNVentures, The Finlab, Advanced New Technology Incubator, and FocusTech Ventures.
Angel Investors
Angel investors are high net worth individuals or successful businesspeople who invest in early-stage businesses in exchange for ownership share in the company. They usually invest in startups that have high potential in the market. In Singapore, individual angel investors invest between SGD 25,000 to SGD 100,000, while group investors invest around SGD 250,000 to SGD 750,000. Some of the top angel investor networks in Singapore include Business Angel Network South East Asia (BANSEA), Singapore Angel Network (SGAN), and Business Angel Scheme (BAS).
Private Equity (PE)
PE refers to an investment made to gain ownership of a private company and usually invest in companies that are in the expansion stage, have competitive advantages in the market and are expected to have positive return on investments.
Some private equity firms are:
3V Source One capital – is a private equity firm that invests in areas such as biotech, education, industrial, media, real estate and software.
AIF Capital – provides funds to companies that specialize in advertising and advertising, healthcare and pharmaceuticals, financial services and power generation.
L Capital Asia – invests in lifestyle food and beverages, lifestyle retail, beauty and wellness and boutique hospitality.
Tael Partners – invests in sectors like natural and mining resources, shipping and logistics, real estate development and utilities and infrastructure.
Venstar – invests in the growth and expansion stage of startups and focuses on petrochemical, energy, resources and pharmaceutical.
Private equity (PE) is the last type of funding and involves investing in private companies to gain ownership. PE firms invest in companies that are in the expansion stage, have a competitive advantage, and are expected to yield positive returns on investment. Some of the private equity firms in Singapore are 3V Source One capital, which invests in biotech, education, industrial, media, real estate and software, AIF Capital that invests in advertising, healthcare, financial services, and power generation, L Capital Asia, which invests in lifestyle food and beverages, retail, beauty and wellness, and boutique hospitality. Tael Partners invests in natural and mining resources, shipping and logistics, real estate development, utilities, and infrastructure. Venstar invests in the growth and expansion stage of startups and focuses on petrochemical, energy, resources, and pharmaceutical.
Startup SG
Startup SG is a program that offers funding and mentorship to startups in Singapore. The program offers several types of grants to eligible businesses. The first grant, the Startup SG Founder Grant, is specifically for first-time entrepreneurs. This grant provides a startup capital grant of SGD 30,000, with a matching amount of SGD 3.00 for every SGD 1.00 raised by the startup. To receive the maximum grant of SGD 30,000, the startup must invest SGD 10,000. To be eligible for the SG Founder Grant, the first-time entrepreneur must meet certain conditions, including holding or proposing to hold at least 30% of the company, being dedicated to the business, not already receiving funding from another government organization, and incorporating a private limited company in Singapore after approval.
Startup SG Equity
The second type of grant is the Startup SG Equity, which is a co-investment program for eligible startups. Under this scheme, the Singaporean government will co-invest with qualified third-party investors into eligible startups. To be eligible for the Startup SG Equity grant, startups must be Singapore-based and have core operations in Singapore, be incorporated as a private limited company for less than five years, have a paid-up capital of at least SGD 500,000, prove substantial innovative and intellectual property for their products and/or services, have high-growth potential with clear scalability in the international market, have identified an independent third-party investor(s), and not be involved in gambling, tobacco-related products or other activities that violate the law or against public interest, and the company must not be a subsidiary or joint-venture.
Startup SG Tech
The Startup SG Tech grant is designed for tech startups that are focused on commercializing innovative technologies. This grant offers two types of funding – Proof-of-Concept (POC) and Proof-of-Viability (POV). The POC grant is for testing the technical and scientific feasibility of new technology and provides up to SGD 250,000 in funding. The POV grant is for testing the technical and scientific feasibility of lab-proven technology and provides up to SGD 500,000 in funding. The SG Tech scheme offers cash grants to various industries including advanced manufacturing, biomedical sciences, clean technology, information and communications technology, precision engineering, transportation technology, and food science and technology. To qualify for the SG Tech grant, the company must be registered for less than five years, have at least 30% local shareholding, and have an annual revenue less than SGD 100 million or employ less than 200 people.
Enterprise Development Grant
The Enterprise Development Grant (EDG) is a program offered by Enterprise Singapore to help companies in Singapore enhance their business strategies, improve productivity, and expand their presence in overseas markets. The program is divided into three pillars, namely Core Capabilities, Innovation and Productivity, and Market Access. Under the Core Capabilities pillar, the program supports businesses by strengthening their business foundation, including marketing development, business strategy development, human capital development, service excellence, and financial management. The innovation and productivity pillar is focused on supporting companies that want to explore new areas of growth and enhance efficiency. The market access pillar is aimed at encouraging companies to expand into the overseas market by supporting areas such as mergers and acquisition, standards adoption, and pilot project and test bedding. The EDG provides funding of up to 70% to qualifying costs for SMEs and up to 50% for non-SMEs, including equipment and software, internal manpower costs, and consultancy fees. To qualify for the EDG, companies must be registered and operate in Singapore, have at least 30% local shareholding, and be financially capable of starting and completing the project.
Apart from grants and funding schemes, business start-up loans are also a common option for entrepreneurs in Singapore. These loans can come from banks, financial institutions, or government agencies. To qualify for a loan, entrepreneurs must typically provide a business plan, financial projections, and collateral. Interest rates and repayment terms may vary depending on the lender and the borrower’s creditworthiness. Some common practices to increase the likelihood of approval include having a solid business plan, demonstrating a clear understanding of the market, and maintaining a good credit score. It’s important to do thorough research and compare different loan options before making a decision.