Startup SG Equity Investment that Singapore SME Should Know About

Startup SG Equity Investment that Singapore SME Should Know About

The Startup SG equity investment is one of the government incentives to encourage investment in the tech-related innovative businesses in Singapore. Within this scheme, the government co-invests on a qualified technology-based startup with a third party investor and plans to promote the innovation and globalization of the Singapore based business letting them access to the private investments. So, if you are an owner or planning to invest in a Singapore technology-based SME, you must know about this scheme, and we try to provide you with every information about the Startup SG investment there is.

 

Investment Framework

In this scheme, every technology startup is divided into the categories, ‘General Technology’ and ‘Deep Technology.’ For the companies listed under general tech, the government invests 70% of the funds until it reaches an S$250K, and then the investments are 1:1 until a threshold of S$2M. For more sophisticated technological businesses, the government invests the first 70% up to S$500K, and then it will be responsible for half of the investment up to a cap of S$4M.

The table below shows the investment parameters of the program.

Category Investment Cap Co-Investment Ratio
General Tech S$2M 7:3 up to 250K

Then 1:1 till S$2M

Deep Tech S$4M 7:3 up to S$500K

Then 1:1 till S$4M

 

Startup SG Equity Investment that Singapore SME Should Know About

Applying For the Startup SG Equity Investment

Here is the process for you to apply for the scheme.

Criteria

Before you make any application, there are certain criteria that both the investor and the company should meet.

For the Company
  • It should be a private limited company incorporated and currently operating in Singapore.
  • The company must have paid capital of at least $50,000 and should not be running for more than five years.
  • The products or services should be innovative and intellectual.
  • The company should have third party investors ready to invest.
  • The company shouldn’t be illegal or promoting inappropriate things, gambling, alcoholism, tobacco, for example.
  • The business should be able to display a lot of potentials, both in the national and the global market.
  • The company can’t be a subsidiary or a joint-venture.
For the investors
  • The investors should verify their expertise. They should have adequate management knowledge, industry connections and everything related that state clearly that they can contribute to the growth of the startup.
  • The investor should invest a minimum of $50,000 into a startup.
  • The investor is not allowed to hold shares in the company, before the co-investment.
Application Process

If your company and the investor(s) both meet the specific requirements, you could apply for the Startup SG Equity Investment. Here is how you do it.

Documents Required

Here are the documents that you will need before applying for the scheme.

  • Business Plan
  • Financial Statements and Management Accounts
  • Business ACRA
  • Background or potential of co-investor(s).

Along with these documents, you will have to prepare a two-page executive summary consisting of the following information.

  • Company Profile
  • Product or Service of the Company and how it stands out from other available items in the market.
  • Technology or Innovation Development Goals
  • Business Strategy
  • Fund Management and Budget Ideas
  • Competition Tactics (You should state the potential competitors and also how your business wants to be unique from them.
Where to Apply

After you have all the application and documentation ready, you could send your application to either one of the fund administrators under the program, SEEDS Capital Pte Ltd (SC) or SGInnovative. You could contact them at:

A point to be noted: there are co-investor partners with both of these wings. SEEDS Capital (SC) is the co-investment partner under Startup SG Equity for the corporations that focus on Advanced Manufacturing and Engineering, Health and Biomedical Sciences and Urban Solutions and Sustainability. For Services and Digital Economy, the co-investment partner under Startup SG Equity is SGInnovative.

Hence, this was all for the Startup SG equity investment in Singapore. I hope this article will help you with your business.


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