How to Secure Startup Funding in Singapore: A Comprehensive Guide

by growwthpartners

November 13, 2023

Commencing a new enterprise can be very exciting. However, obtaining enough capital is one of the greatest obstacles that any startup faces. In this detailed article, we shall discuss various ways of raising money for your startup in Singapore; a city known for its pro-business environment and attractive grants to startups.

Startup Funding: The Lifeblood of Business

For a new business, startup funding acts as the lifeblood which ensures its growth. Capital is required whether you want to introduce a new product in the market, expand into different markets or just keep running your business smoothly.

Lack of sufficient funds especially during the initial year where they are struggling to survive may lead to many start-ups failing.

The process of getting financed can be intimidating especially to first-time entrepreneurs. However, with proper research planning and understanding different options available for start-up funding; one can easily maneuver through this complex landscape confidently.

Identifying Suitable Funding Options

There are several methods to raise money for a startup each having its own strengths and weaknesses below are some effective ones:

Funding Method	Description
Peer-to-Peer (P2P) Lending	Connects entrepreneurs with private investors; offers favorable interest rates for businesses and higher returns for investors.
Bank Loans	Offered by banks and financial institutions; includes traditional loans, lines of credit, invoice financing, and fixed asset loans.
Government Grants	Provided by the government to support business growth; includes grants and incentives tailored to specific needs (e.g., Singapore).
Self-funding (Bootstrapping)	Entrepreneurs use personal savings or contributions from family/friends; minimal formalities and costs.
Crowdfunding	Involves a large group contributing small amounts to support a new venture; a way for startups to pitch ideas and secure backing.
Angel Investors	High net worth individuals invest in startups in exchange for equity or convertible debt; significant support during early stages.
Venture Capital	Specialized in funding startups and young businesses; pool funds from various sources and invest in high-growth potential startups.
Debt Financing	Raises capital by selling debt instruments; includes bank loans, external commercial borrowings (ECBs), or government funding.

Stages of Startup Funding

The stage of your startup will often dictate the most appropriate source of funding. Here’s a general breakdown of the typical funding stages:Usually, the most appropriate source of funding is determined by the stage at which your startup is currently in here’s a general breakdown of typical funding stages:

Ideation: At this initial phase personal savings or contributions from family members and friends are often more viable as informal channels of finance.
Validation: This is when business idea ready for implementation & validation which would necessitate seeking out formal kinds of financial backing.
Early Stretch : During this time business plan being executed upon optimized for better performance optimization improvement etc
Scaling : Herein comes rapid growth with increased revenues being generated year after year (Y/Y).
Declining: Unfortunately not all plans succeed therefore if there happens to be poor performance it may require support from stakeholders since they have vested interests in such ventures too.
Exit Options: Different techniques can be used to reduce losses when exiting the market.

Startup Funding in Singapore

Referred to as the Silicon Valley of Asia, Singapore is an ideal destination for startups. The country provides several sources of funding for entrepreneurs such as government grants, private equity companies, accelerator programs and venture capitalists.

The Singapore government gives many funding schemes and grants for local business people. Here are some examples.

Startup SG
This was created in 2017 as a consolidation of various aid programs by the Standard, Productivity and Innovation Board (SPRING). It offers such things as capital grants, equity financing and business loans to eligible start-ups.

Startup SG Founder
This is one of the six pillars of Startup SG that supports first-time entrepreneurs with a co-matching arrangement providing up to SGD30,000 in capital grant.

Startup SG Tech
Commercialisation of Proof-of-Concepts (POC) can get around SGD250,000 while another SGD500,000 could be given for Proof-of-Value (POV) projects under this scheme.

Enterprise Development Grant
Administered by Enterprise Singapore, it helps start-ups innovate, enhance productivity and scale-up globally.

Productivity & Solutions Grant (PSG)
For enhancing IT solutions and equipment towards productivity improvement by startups.

VentureForGood (VFG) Grant
Startups that address local social needs can receive up to SGD300,000 under this grant.

The BIF refers to a financing scheme that supports technology and business model projects in the tourism sector.

P-Max Scheme: P-Max Scheme was created by Workforce SG to help SMEs hire, train an

Non-Government Funding Options in Singapore

In Singapore, there are non-governmental funding organizations other than those supported by the government.

Angel Investors: These are wealthy individuals who invest in early-stage startups either singly or as a group.

Venture Capitalists: Venture capitalists invest in startups and late-stage companies that require large capital investments.

Private Equity Firms: Private equity firms invest in profitable, high-growth companies.

In Conclusion:

Getting startup funding is a major step towards success for any entrepreneur, be it someone starting up in Singapore or anywhere else across the globe. Knowing which types of funds are available and how they can align with your business goals is crucial. This will help you lay down solid financial groundwork for your startup and pave its way to explosive growth.

Considering Fundraising? Contact Growwth Partners!

Growwth Partners are specialists when it comes to Fundraising Solutions for Business Financing. We have worked on multiple fundraising projects with startups, SMEs, family businesses backed by investors as well as multinational corporations. With our knowledge we guarantee the best valuation at optimal funding from the right investors which sets your business for long-term success. Book your free call today.

The material / information contained above or other parts of this website is for general information purposes only and should not be relied upon for tax, legal or accounting advice. You should consult an expert in the relevant field before engaging in any transaction since applicability of the above may be different on the facts and circumstances of your situation. While we have made every attempt to ensure that the information contained on this website has been obtained from reliable sources, we are not responsible for any errors, omission or the results obtained by using the above information. We are not responsible for updating the above for changes in law, practices, or interpretation.