Singapore is currently one of the largest business hubs in Asia which has led to the development of many start-up companies. In the early stages of the activity, many start-ups will need funding and most of them have turned to debt financing until recently. In the last few years, the Government has started to encourage private investors to fund small and medium-sized enterprises through various incentives. This way of raising money for one’s business is also known as private equity or venture funding. This process implies selling a part of the business in exchange for cash. The greatest advantage for investors is the return they can obtain by funding these type of companies.
Our specialists in company registration in Singapore can provide you with more details about the venture funding procedure in the city-state.
Venture funding is the best option when a Singapore company cannot contract a loan. Among the most familiar types of private equity funding options in Singapore at the moment are:
Business angels are usually investors willing to take a major risk during the first stages of a company in exchange for a part of the business. Singapore is home to various business angels associations, however, this type of investors can also act independently. Angel investors can also participate in the business by providing their knowledge and support. Venture capitalists, on the other hand, are professionals seeking to obtain a high yield on their investment and will usually be more involved in the company compared to business angels.
The third option, private funding, can be secured through financial institutions or investment funds. This type of venture funding is usually appropriate for medium-sized companies in Singapore which are already generating income.
Even if smaller than the European private equity industry, the venture capital sector is also starting to develop in Singapore. Nowadays, the city-state is home to an impressive number of venture capital companies encouraged by the Government through tax incentives and other policies. Venture funding in Singapore can last between two and five years depending on the company.
Whether you need funding or want to open a venture capital company in Singapore, do not hesitate to contact our consultants in company formation for assistance.