3 Financing Options for Start-ups in Singapore
Many start-ups don’t thrive beyond the third year after getting started. When you ask many of the founders what the leading cause of the failure, they will attribute it to limited funding. Some entrepreneurs don’t even think about funding beyond paying their Singapore Company Incorporation Fees.
As an entrepreneur who wants to start a business in Singapore, it is important to ensure you have enough funding to maintain and grow your company. We have compiled a list of 3 financing options that will ensure that you don’t get stuck after you start a business in Singapore.
1. Angel Investing
Getting Angel Investors to fund your start-up company is one the best options for any entrepreneur who seeks to start a business in Singapore. Start-ups love angel investors because apart from investing capital in the business, they give advice in the early stages of business growth, and all their insights and experiences in the industry. In return, you give them shares of the start-up.
Typically, we define this type of investor as a person who wants to put their money in start-ups or companies that have a high potential of growth and expansion. Therefore, if you’re looking to incorporate a company in Singapore, the company should present themselves as having a high growth potential or can potentially breakthrough in the industry. This is so that your company or business idea can attract angel investors, sometimes even before you incorporate a company in Singapore.
There are a few key industries that are much more attractive to angel investors, such as Technology or Biotechnology. If you wish to set up a company in Singapore in these industries, it will be much easier for you to gain access to angel investing.
2. Getting Venture Capitalist Funding
When venture capitalists come to your start-up, they can provide you with more than just business capital. They can advise you on how to scale the business and how you can run it profitably. Venture capitalists usually get directly involved in the business that they put their money in, and involve themselves in the business for a period of like five years. They are usually in search of high returns on Investment, hence are a good choice for a newly set up company in Singapore looking for a long term partner to work with, or have a fully developed business idea.
Venture capitalists usually favour businesses in the fields of IT and Science, due to the high growth potential and importance of these sectors. They also usually come in the forms of large institutions such as universities and financial firms. As a result, they are much more particular about the companies they wish to support. Therefore, if you seek to incorporate a company in Singapore and want to opt for Venture Capital, be sure to do your research on the industry and prepare your business plans thoroughly.
3. Private Funding
It is difficult to get angel investing funds, or even other types of funding from professional investors. When you also lack enough personal funds, the only option left is getting private funding. These include banks and other investment corporations that founders or business persons can opt for when you incorporate a company in Singapore.
Newly set up companies in Singapore and start-ups in their early stages of growth may not benefit much from banks that need a business with high returns and which is creditworthy. However, the Singapore government has started a Micro Loan programme under the International Enterprise (IE) Singapore, which has been charged with the role of encouraging growth and expansion of companies and start-ups. These Micro Loan programmes give out loans that you can invest in your business, or utilize on a rainy day. You can even use it to pay off your Singapore company incorporation fees during the process of company incorporation in Singapore.
Sometimes your business needs capital that your seed fund may not be able to provide. One good thing about these types of funds is that the investors are not too involved in your business. The entrepreneur will get both sufficient funds and still retain control of the business. The only thing that these investors want is getting a high return for their Investment, so be sure to convince them that your business will be successful.
We can say that the process to incorporate a company in Singapore is no longer cumbersome as it was a few years or a decade ago. Make sure you do your due research on the funding options best suited for your company, and then all you need to do is have a sound financial plan.
If you have any queries about funding, Singapore company incorporation fees or how to start up a business, do contact a Singapore company registration service provider such as WLP Group for more information. These service providers specialize in the process of company incorporation in Singapore, and are able to give insightful advice and support regarding finding an investor as well.