Business Angels and Venture Capitalists in Singapore

Information about Venture Capitalists and Angel Investors in Singapore and where to find them.

This blog entry contains information which technopreneurs might need to seek out investors. Despite the pessimistic outlook in fundraising for a company in its seed or series A stage, most people find money through the 3Fs (Friends, Family and Fools). Recently, I did this survey in asking people whether they know about investors in general. The words “venture capitalists” and “business angels” are foreign to most people.

Private Equity is the general category in banks where companies seek funds. It is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. Examples of private equity that you will encounter as an entrepreneur are leveraged buyouts, venture capital, growth capital, angel investing, mezzanine capital.

Specifically, venture capital is the capital which are provided by outside investors. The purpose of the capital is to finance of new, growing or struggling businesses. Venture capital investments generally are high risk investments but offer the potential for above average returns. A venture capitalist (VC) is a person who makes such investments. In Singapore, there is the Singapore Venture Capital Association (SVCA), which you can locate and find venture capitalists. Similarly in UK or US, there are also similar venture capital associations where you can do the same. Quoting from the website, their activities are broken down into:

1. Facilitate interaction among professionals in the Venture Capital (VC) & Private Equity (PE) industry
2. Organize meetings on topical issues concerning the VC/PE industry
3. Inter-phase between local or foreign government agencies and industry groups
4. Host visits by trade groups seeking business alliances and opportunities
5. Facilitate link between businesses seeking funds/investment with VC/PE firms
6. Talks, seminars, and conferences
7. Social and business networking functions
8. Publication of newsletter & magazine

On the other hand, the business angel has a different profile than a venture capitalist. In the strictest definition, an angel investor (or business angel) is an affluent individual who provides capital for a business start-up, usually in exchange for ownership equity. Unlike venture capitalists, angels typically do not manage the pooled money of others in a professionally-managed fund. It is likely that most business angels are formerly successful entrepreneurs themselves in the past.

Angel investing fills the gap in start-up financing between the “three F”s (friends, family and fools) and venture capital. While it is usually difficult to raise more than $100,000 – $200,000 from friends and family, most venture capital funds will not consider investments under $1 – 2 million. This is where the angel investment comes in. Usually, the business angels are more “hands-on” and also bring in their contacts to help the entrepreneurs grow their business.

In Singapore, we have Business Angel Networks, South East Asia (BANSEA). From their website, they “promote development of the angel investment community in Asia through educational conferences/workshops, research, networking with angel groups worldwide, contributing to improving the regulatory environment and corporate governance system for angel investing, and facilitating the matching of start-ups with angel investors.” Usually, they organize lunch sessions to get entrepreneurs to pitch their business plans.

If there are other queries on these two groups of investors, please feel free to leave a message here.

Technocrati Tags:
Business Angels, Venture Capitalists, Investors, Singapore Entrepreneurs, Start-Ups, Business, Singapore, Entrepreneurship, Private Equity, Technopreneurs

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