Furthermore, the event made clear the Singapore government wants to see increased participation from the private sector
Singapore’s Minister of State for Trade and Industry, Dr. Koh Poh Koon giving a speech at the unveiling of Startup SG
Earlier this month, the Singaporean government concluded a process of streamlining a host of startup-related grants and support schemes by bringing them under one brand called Startup SG.
Yesterday, during the official launch of three new startup-focussed buildings in one-north — Blocks 75, 77 and 81 — Singapore’s Minister of State for Trade and Industry, Dr. Koh Poh Koon, revealed more details of the scheme. He specifically touching on two segments called Startup SG Equity and Startup SG Founder.
“The government is further strengthening our support for the startup ecosystem to help it take off in a much larger way. I spoke about some of these areas during MTI’s Committee of Supply (COS) debate in Parliament earlier this month,” he said.
Startup SG Equity
Singapore’s government is making a concerted effort to support deep-tech companies, following the logic that they are usually heavy in R&D and take longer to go-to-market.
As a result, they can be riskier for private-sector investors who may see their money burned before the startup has a chance to take off. In Singapore, the government wants to step in to co-invest in these projects.
Under Startup SG Equity, the the government has allocated S$200 million (US$143 million) for a new co-investment scheme.
The government will co-invest 70 per cent of the investment into deep-tech startups up to US$500,000 and 1:1 thereafter, up to the S$4 million (US$2.9 million). For more traditional startups, Startup Equity will invest 70 per cent up to US$250,000 and then 1:1 up to a limit of S$2 million (US$1.4 million).
Startup SG Founder
The government will also be replacing the ACE Startups grant and iJam Tier 1 grant and create a first-time-Founder scheme called the Startup SG Founder.
Startup SG Founder will support first-time entrepreneurs and the government has allocated S$20 million (US$14.3 million) for the initiative. Additionally, applicants will be teamed with mentors under a new approach called Accredited Mentor Partners (AMPs).
“These AMPs will include incubators and accelerators which will provide advice, networking and learning opportunities for the first-time entrepreneurs. They will also help entrepreneurs obtain pre-seed funding,” said Koh.
A notable change is how Startup SG Founder will treat foreigners within a company. Previously, to be eligible, the company had to have 51 per cent of equity owned by a Singaporean or Permanent Resident. Now, that number has been reduced to 30 per cent.
SPRING Singapore is launching a ‘call-for-collaboration’ for interested parties to become AMPs. Readers who may be interested can visit www.startupsg.net for more details.
Startup SG Founder and Startup SG Equity will be officially launched on May 1, 2017.
Enter the private sector
The Singaporean government wants more participation from the private sector when it comes to funding and supporting the ecosystem.
In a quote given to Channel News Asia, Koh said the following:
“While Government can provide funding, we have to be careful that we do not actually cripple the ability of start-ups to fight for funding, by being too overly generous with funding that cripples their desire to aspire to be better.”
“So therein lies the difficult balance we have to strike, and I think by having more smart money, venture capitalists coming in, they should gradually take over the space from the Government and be the ones who curate the kind of start-ups that deserve funding.”
This sentiment was echoed by SPRING’s Edwin Chow, who is the Group Director of Industry Development 2, Innovative & Start-Ups, Partnerships for Capability Transformation.
He said, “We want to move towards a situation where the private sector steps up, private sector takes the lead. Particularly in the traditional ICT [sector],” during a panel discussion.
The notable exception is the aforementioned deep-tech sectors.
“Where we think we should still continue [heavy support] is in sectors that are more research oriented. [Because they have] a longer gestation period before MVP can be confirmed,” he said.
Government programmes have played a crucial part of catalysing Singapore’s startup scene (that is now a regionally-elite ecosystem). The term “stoked the fire” was used during the event.
But, now that the startup scene is starting to take off, the ecosystem seems to be ready for an infusion of ruthlessness, that ‘fail fast’ attitude which has come to define Silicon Valley.
At least, that was the sentiment at yesterday’s launch event.
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