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| Capital Raising in Singapore |
Of late, capital raising in Singapore has become the primary
target of most of the Asian startups. With the government facilitating the
entry of more and more VCs in the city-state, the entrepreneurial ecosystem is getting
delighted with the increased scope of venture capital raising in Singapore.
However, in our excitement, we often end up making some minor or sometimes even
major mistakes that ruins all the effort we put into fundraising.
Here are a few tips that you should remember whenever you
are planning to raise venture capital for your startup.
Tips For Capital Raising In Singapore
Chase The Investor,
Not The Firm
The most important rule while seeking venture capital is to chase
the investor and not the firm. Rather than chasing the VC firm as a whole, it
is advisable to target specific investors who seem to be interested in your industry.
The best way is to interact with other startup CEOs who have recently closed
their fund raising campaign as they can best give you an idea of the actual state
of the investors. Which investor is currently active, who is broke or who is showing
interest in your industry can be known from the new CEOs. Sharing such
information between entrepreneurs is quite healthy as it not only increases
your contacts but also introduces you to people who can introduce you to the
right venture capitalists.
Try To Grab The VC’s
Attention
Venture capital industry in Singapore is quite new, so the VCs
are also equally interested in knowing about the new startups in the market. At
this point of time, if you can cultivate a genuine and thoughtful communication
with a suitable investor, it is quite possible that your effort will pay you
back.
Once you have enlisted a few names of potential investors,
start following them on their social networks like Facebook, Twitter and
others. Become a regular reader of their latest posts and leave a thoughtful comment
whenever possible. This is definitely not a one day gesture but you should do
this on a regular basis. However, make sure that you do not end up doing
anything in excess. Your comments or praise should be realistic enough to help
you grab the type of attention you are looking for.
Get A Genuine
Referral
When it comes to seeking referrals to the VC, you will find
many professional service providers. The strategy, however, is not as effective
as getting a referral from a member who is either very familiar to the VC or
has no professional motive, i.e. one who has nothing to gain from your
achievement.
Usually, the CEOs of the VC’s portfolio companies work as
the best referrals but for this you might need the VC to introduce you to their
portfolio companies. And in case, it doesn’t work, you can directly approach
their portfolio start-ups and discuss your plan of seeking venture capital. If
you can form a sound relationship with the executive of the portfolio company,
they will happily introduce you to the VC with best of their efforts.
Convince The VC For
Investment
The first meeting with the VC is more of a make or break
situation. Your attitude, your words, your team, everything will combine
together to set the mood of the VC for investment. Never try to ask about the
money in your first meeting. Let the VC know your business plan, for which you
have to prepare a convincing pitch to be read in front of the VC. If you really
have a unique business plan, it will never go unnoticed. Start with discussing
your business with the VC and they will automatically come to a conclusion whether
or not to invest in your business. It is very important to target the right
investor right from the beginning. Often things end up abruptly due to lack of
relevance of business to the investment focus of the VC. Something that can give significant credibility to your
business is your personal savings as the first source of funding. If you can
contribute 10-25% from your personal savings, the VCs will gain confident more
easily. However, if you are not are in a position to self-finance, you can
directly talk about capital raising to the investor.
Conclusion
There are many networks in Singapore that connect entrepreneurs
to suitable venture capital firms in Singapore or angel investors. Such networks drastically
reduce the time required to find the right VC and also serve as a knowledge
platform for startups owing to the presence of financial and management
advisors of the startup ecosystem of Southeast Asia. Some of the popular
networks include Merger Alpha, BANSEA, SVCA and others. Try to become a part of
such a network and save your valuable time and money while venture capital
raising in Singapore. For more information on capital raising in Singapore, feel
free to visit http://mergeralpha.com/.
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