Meeting the highly competitive global market head on, Minister Koh Poh Koon of Singapore’s Ministry of Trade and Industry launched the Singapore Startup SG national plan in March 2017. This plan provides a platform for action and global startup networking for all Singaporean start-ups.
For startup companies at different stages of development, Startup SG provides six main types of programs:
Provide mentor guidance and funding support for first-time startup companies with new ideas. On this basis, 1/3 of the total funding support entrepreneurs receive will be used to appoint accredited mentor partners (AMP). Using the experience and professionalism they have accumulated in the industry, these AMPs will manage startup teams and give them personalized advice, as well as direction in which to develop their business models.
The goal is to provide initial venture capital subsidies for enterprises beginning to commercialize their patented technologies. Depending on the developmental stage of their technological concept, there are two types of subsidies, namely proof-of-concept (POC) and proof-of-value (POV). This type of subsidy is usually used to verify solutions that can evolve into a business model.
This plan is for the Singapore government and third party investors to co-invest in startup companies. The goal is to encourage private entities to invest in innovation, and increase the intellectual property rights of Singapore’s innovative technologies, in order to strengthen global competitiveness. The partnership investment ratio for third party investors is limited to 7:3 and a cap of US$250 thousand. The investment caps are US$2 million for general tech companies, US$500 thousand for larger tech companies, and US$4 million for late-stage investments. As for third-party investors looking to invest in individuals or startup companies, they are required to set aside at least US$50 thousand.
The Startup SG Plan is managed by SPRING SEEDS Capital (SSC), the public sector of Singapore’s investment agency SPRING, and a government platform for startup companies to find all kinds of information and resources. SSC has promised to invest up to US$100 million to help incubate Singapore’s potential high tech startup enterprises, and actively recruit cooperative investment partners in advanced manufacturing engineering (AME) and health & biomedicine fields.
This plan is to provide startup enterprises with prototype business models with the financial and non-financial support for them to accelerate the process of bringing prototypes to the market. Financial support includes operating costs such as salaries for the incubation team, the mentors, and the company consultants.
This plan is implemented as a companion to Singapore’s EntrePass, T-UP, and SME Talent Programme. EntrePass is a national pass program that allows entrepreneurs from all over the world wanting to start their company in Singapore to successfully enter and stay in the country, and strengthen policies for recruiting international talent.
T-UP collaborates with the A*STAR research institute to establish a talent database, inspiring companies to conduct their own research and development. Up to 70% of intermediary fees for scientists and engineers will be subsidized for a period of two years. On the other hand, the SME Talent Program for Startups provides a 70% subsidy for interns.
Though most corporate financing is conducted through financial institutions, this plan is specifically designed by the Singapore government for small and medium-sized startup enterprises, including the provision of urgent working capital, equipment and factory financing, and trade financing. Specifically, the plan includes the following: the SME Micro Loan, which is meant for companies with 10 or fewer employees, and provides funds of up to S$100 thousand to maintain daily operations; the SME Venture Loan, which provides up to S$500 thousand in financing for business expansion; the SME Working Capital Loan, only available from June 1, 2016 to May 31, 2019, which allows any startup company to access S$300 thousand in financing if any additional financing is needed; and the SME Equipment and Factory Loan, which gives startup companies up to S$15 million in equipment financing.
Startup SG is just one of many strong protective measures provided by the Singapore government to start-ups enterprises, leading Japan, South Korea, and Hong Kong over the past decade. 19% of Asia’s venture capital investment falls in Singapore-lead startup bases, which shows the continuous optimization and hard work of the Singaporean government to inject confidence and motivation into the creation of a sound startup ecosystem.