Singapore stands out as a leading startup ecosystem, not just regionally but globally—recognised as the top startup ecosystem in Asia and seventh worldwide. With numbers like that, it's no wonder startups are proliferating here, rapidly expanding and reaching new heights.
So, if you're looking to launch a startup in Singapore, you're in the right place. Let's explore the various avenues for securing startup funding in this vibrant hub.
Why is Singapore good for startup growth?
Our country boasts a business-friendly environment, a robust infrastructure, and access to a highly skilled talent pool. While the success rate of new businesses globally hovers between 10% and 20%, Singapore sits comfortably higher 30%. If you're looking for an entry point into the market, this would be a comfortable ground zero, offering a solid foundation for business funding options.
The Singapore startup system
A well-oiled machine, the startup system in Singapore is designed to nurture and support businesses at every stage. The ecosystem is vibrant, with a network of investors, incubators, accelerators, and government agencies all working together to foster innovation. Initiatives like Startup SG provides a comprehensive support framework for entrepreneurs.
How To get funding for startups in Singapore
1. Self-funding and bootstrapping
Starting with your own resources is often the first step. Self-funding, or bootstrapping, means using your savings, credit, or revenue the business generates to finance operations. It's a way to maintain complete control and ownership from the get-go.
This approach demonstrates your commitment and can make your startup more attractive to future investors. However, it can also be risky, as you're putting your finances on the line. You will need a solid financial plan for your startup business to make it work.
2. Friends and family
Another early-stage option is to seek funding from friends and family. More than anyone, your family are likely to believe in you and your vision and may be willing to provide capital funding for your startup based on personal relationships.
While it can be a convenient source of capital, the chance of your business not taking off may also mean a considerable loss of finances for your family. It's important to treat these investments as professional agreements with clear terms and expectations to avoid damaging relationships.
3. Taking a business loan or a business line of credit
When you need a larger sum, consider a business loan or a business line of credit. A loan provides a lump sum with fixed repayment terms, while a line of credit offers flexible access to funds as needed. Both can help you finance growth or manage cash flow.
A business loan or credit line can provide the necessary capital for expansion, but depending on the bank, your interest payments will require a solid financial plan to overcome. Ensure you understand the terms and can comfortably meet the repayments.
4. Crowdfunding and P2P lending
Leveraging the power of the may, crowdfunding and peer-to-peer (P2P) lending platforms allow you to raise funds from a large pool of individuals. Having the public validate your idea can build a community around your brand and set the stage for potential consumers, creating early adopters and brand advocates.
Both crowdfunding and P2P lending rely on online platforms to connect you with potential funders, but they differ in their structure. Crowdfunding often involves rewards or equity, where backers receive perks, early access, or a share in the company. P2P lending, on the other hand, is typically debt-based, where individuals lend money with the expectation of repayment plus interest, similar to a traditional loan but facilitated through online platforms. This provides a more direct lending approach, bypassing traditional financial institutions.
5. Venture capital firms and angel investors
If you're looking for substantial capital, venture capital firms and angel investors can be valuable partners. In addition to startup funding, they often offer strategic guidance, industry connections, and valuable expertise, helping you navigate the challenges of scaling your business—all for a portion of ownership in your company.
Angel investors typically invest in early-stage startups, providing seed funding to help you get off the ground. Venture capital firms, on the other hand, focus on later-stage companies with proven growth potential and a clear path to profitability.
While both can provide significant capital, they will typically take a seat on your board and have a say in major decisions. This may be a hard no, especially if you prefer to maintain full control of your company.
6. Accelerators and incubators
Accelerators and incubators offer more than just funding. They provide mentorship, resources, and a supportive environment to help you refine your business model and accelerate growth.
On the other hand, these programmes can be highly competitive, demanding a significant time commitment—dedicating several months to intensive workshops, mentorship sessions, and networking events. Consider applying if you're looking for mentorship and guidance in addition to funding and if you're prepared to dedicate the necessary time and effort to maximise the program's benefits.
7. Government grants
The Singapore government offers a range of grants to support startups. These grants can provide non-dilutive funding, which means you don't have to give up equity in your company. This can be a fantastic way to secure capital without diluting ownership, allowing you to retain full control and potential profits.
However, government grants often come with stringent eligibility criteria and detailed reporting requirements and may be tied to specific milestones or industry sectors. This can mean a more bureaucratic process than other forms of funding.
While the non-dilutive nature is a major advantage, businesses must be prepared for the compliance and administrative demands associated with government grants.
Government programmes in Singapore that support startup funding
Startup SG
Startup SG is a national initiative designed to provide a comprehensive and integrated support framework for startups in Singapore. It acts as a one-stop portal, connecting entrepreneurs with a wide range of government resources and programmes tailored to their needs. Some of Startup SG’s support programmes include
- Startup SG Tech: Supports the development and commercialisation of innovative technology solutions.
- Startup SG Accelerator: Provides funding and support to accelerator programmes, enhancing the mentorship and resources available to startups.
- Startup SG Loan: Facilitates access to loan financing through partnerships with financial institutions, easing the burden of capital expenditure.
- Startup SG Network: Connects startups with a network of investors, mentors, and industry experts, fostering valuable collaborations.
- Startup SG Founder: Offers seed funding and mentorship to first-time entrepreneurs with innovative business ideas.
gobusiness Singapore
gobusiness Singapore is a platform that simplifies access to government assistance. It streamlines the application process for grants and support schemes, making it easier for startups to find and secure funding.
gobusiness Singapore sorts their support into in-depth sectors, including:
- Food & Beverage
- Retail
- Manufacturing & Engineering
- Energy
- Professional Services
House your new startup in a versatile coworking space
TWP’s office space rentals
Once you've secured funding, you'll need a base of operations. While a fixed office space might strain your budget, why not consider a coworking space as a flexible and cost-effective alternative?
The Work Project offers office space rentals for businesses of all sizes, from fresh startups to regional enterprises. Our corporate event venues occasionally host networking events, providing opportunities to market your startup and connect with potential investors or partners.
Browse our coworking offices in Singapore and book and rent a workspace today.
