Web In Travel- Web In Travel- An Angel Ate At My An Angel Ate At My

Table: Table: An Investment An Investment

SessionSession

Bill LiuBill Liu

ChairmanChairman

Stream Global Pte LtdStream Global Pte Ltd

What Does A Start-Up Company What Does A Start-Up Company Need?Need?

Expansion CapitalExpansion Capital Continue To InnovateContinue To Innovate Marketing & Access To Markets Marketing & Access To Markets (Overseas)(Overseas)

IT Systems & SolutionsIT Systems & Solutions Build Management capabilityBuild Management capability Attract TalentAttract Talent Compete InternationallyCompete Internationally Build BrandBuild Brand

Funding Road - MapFunding Road - Map

Business Plan CompetitionsBusiness Plan CompetitionsIncubatorsIncubatorsAngel Investors (also Friends & Angel Investors (also Friends & Family)Family)

First Stage Funding – Venture First Stage Funding – Venture Captial, Bank LoansCaptial, Bank Loans

Govt. SupportGovt. Support–Equity, Debt, Tax IncentivesEquity, Debt, Tax Incentives

Growth (Late) stage fundingGrowth (Late) stage funding

Venture Capital ‘101Venture Capital ‘101’’Seed RoundSeed Round: Idea Stage – No Prior Capital: Idea Stage – No Prior Capital

First RoundFirst Round: Series ‘A’ – Feasibility Stage, : Series ‘A’ – Feasibility Stage, First Professional Capital & Structure for R&DFirst Professional Capital & Structure for R&D

Second RoundSecond Round: Series ‘B’ – Product Development : Series ‘B’ – Product Development Stage, Collaborations & Customers, Clear Stage, Collaborations & Customers, Clear Intellectual Property StrategyIntellectual Property Strategy

Later RoundsLater Rounds: Series ‘C’ & Beyond – : Series ‘C’ & Beyond – Commercialization/Expansion StageCommercialization/Expansion Stage

ExitExit: M&A or IPO: M&A or IPO

Funding to MilestonesFunding to Milestones

Capital

Risk (ß)

Valuation

Idea isFeasible

TechnologyWorks

A CustomerBuys

SeedFunding

R&DCapital

Go-to-MarketCapital

ExpansionCapital

P(success) = 10%Req’d IRR = 100%

P(success) = 30%Req’d IRR = 70%

P(success) = 50%Req’d IRR = 50%

P(success) = 80%Req’d IRR = 30%

“Old-Fashioned Venture Capital”

Venture Capital Venture Capital Investing in 1999Investing in 1999

What Does A VC look For In A Company?

3 Factors You Often Hear- - Management, Management, ManagementManagement, Management, Management

3 Factors That Are Important:

- Very Large Market Opportunity- Management Team’s Ability To Adapt and

Scale Up the Business- Increasing Barriers to Entry

Technology is a Necessary But Not a Sufficient Condition!

Clearly Defined Exit Strategy

Lessons Learnt By Lessons Learnt By Many……….Many……….Business involving change of paradigm is Business involving change of paradigm is very difficultvery difficult–Early adoption is slowEarly adoption is slow

Cross Boarder Business is toughCross Boarder Business is tough–Don’t under estimate the regulatory Don’t under estimate the regulatory barriers/approvalsbarriers/approvals

Need stringent mentalityNeed stringent mentality–Go for low frills and low costs set-up Go for low frills and low costs set-up until cash flow positive!until cash flow positive!

Not to be dependent on only 1 major revenue Not to be dependent on only 1 major revenue streamstream

Need a plan B, C……Need a plan B, C……Discount heavily any initial forecasts by Discount heavily any initial forecasts by the companythe company

THE WORLD OF NEOPIATHE WORLD OF NEOPIAVIRTUAL WORLDVIRTUAL WORLDVIRTUAL WORLDVIRTUAL WORLD

THE WORLD OF NEOPIATHE WORLD OF NEOPIAADVERTISEMENTSADVERTISEMENTSADVERTISEMENTSADVERTISEMENTS

Neopet Company’s Progress Neopet Company’s Progress

Rate of growth was 1.6 million accounts per month Rate of growth was 1.6 million accounts per month worldwideworldwide

Users are spending an average of 4.5 hours per Users are spending an average of 4.5 hours per session on the Neopets sitesession on the Neopets site

Nielsen NetRating has consistently rate them among Nielsen NetRating has consistently rate them among the top ten most visited site from Singapore with the top ten most visited site from Singapore with average of 200K unique Singapore users.average of 200K unique Singapore users.

The management team is made up of executives who The management team is made up of executives who are experienced in entertainment and market are experienced in entertainment and market research businessresearch business

Unlike other internet Cos, NeoPets management is Unlike other internet Cos, NeoPets management is very conscious of keeping cost low and matching very conscious of keeping cost low and matching cost to revenuecost to revenue

Very popular amongst Generation Y of both sexesVery popular amongst Generation Y of both sexes

So How/What?

Is this a great time to be pulling levers Is this a great time to be pulling levers and starting new companies?and starting new companies?

Liquidity isn’t predictable, but…Liquidity isn’t predictable, but…– Choices about business models, geography and Choices about business models, geography and

industry sectors are critical levers – and controllableindustry sectors are critical levers – and controllable– The The foodfood will be back … !will be back … !

…….Have you the passion?.Have you the passion?

Happy Happy Hunting!Hunting!

Thank You For Your Thank You For Your AttentionAttention

Incubators– lowering Incubators– lowering initial costs initial costs

Provide workspace and Provide workspace and shared administrative shared administrative resources resources

Help with fund-Help with fund-raising and marketingraising and marketing

General mentoring and General mentoring and guidanceguidance

About 100 incubators About 100 incubators in Singaporein Singapore

Singapore’s HotspotsSingapore’s Hotspots–The Enterprise @ Jurong The Enterprise @ Jurong East East

–iAxil @ Singapore Science iAxil @ Singapore Science Park Park

–iHub @ Jurong East iHub @ Jurong East –Nanyang Technological Nanyang Technological University University

–National University of National University of Singapore Singapore

–Phase Z.Ro @ one-north Phase Z.Ro @ one-north –Soho @ Central Soho @ Central –Technopreneur Center @ Ayer Technopreneur Center @ Ayer Rajah Rajah

–Technopreneur Center @ Technopreneur Center @ Bukit Merah Bukit Merah

–Technopark @ Chai CheeTechnopark @ Chai Chee–Suntec City Suntec City "HOT" stands for

"Hub of Technopreneurs”

Private InvestorsPrivate Investors

Angel InvestorsAngel Investors

Venture CapitalVenture Capital

Where to find them?Where to find them? DEALS DEALS

–An online directory to match up investors with startupsAn online directory to match up investors with startups–Classified by 14 IndustriesClassified by 14 Industries–https://venus.edb.gov.sg/deals/process/OnlineDirViewhttps://venus.edb.gov.sg/deals/process/OnlineDirView

BANSEA – Business Angels Network of South East AsiaBANSEA – Business Angels Network of South East Asia–One time membership Fee $200One time membership Fee $200–Membership BenefitsMembership Benefits

Information on deal flows & overseas contactsInformation on deal flows & overseas contacts Discounts for public events requiring registration fees, and Discounts for public events requiring registration fees, and

ACE - Action Community for Entrepreneurship ACE - Action Community for Entrepreneurship –Events like BlueSkyEvents like BlueSky

SVCA – Singapore Venture Capital and Private Equity SVCA – Singapore Venture Capital and Private Equity AssociationAssociation

Government Schemes Government Schemes for for

Start Ups In Start Ups In SingaporeSingapore

$ for $$ for $

Tax exemptionsTax exemptions

SPRINGSPRINGStandards, Productivity and Innovation Board, Standards, Productivity and Innovation Board,

SingaporeSingapore

Focus is to champion enterprise formation and Focus is to champion enterprise formation and growth growth –Funding resourcesFunding resources–Network of valued relationshipsNetwork of valued relationships

Works with partners toWorks with partners to–Help enhance the productivity and innovation and Help enhance the productivity and innovation and capabilities of enterprisescapabilities of enterprises–Increase access to markets and business Increase access to markets and business opportunitiesopportunities

SEEDSSEEDSStartup Enterprise Development SchemeStartup Enterprise Development Scheme

$ for $ match for funds raised with a $ for $ match for funds raised with a third party investorthird party investor–Minimum of S$75,000 from third party/partiesMinimum of S$75,000 from third party/parties–Maximum funding of $300,000Maximum funding of $300,000

An An SPRINGSPRING scheme scheme–25% SEED Cos Have Foreign Founders25% SEED Cos Have Foreign Founders–More than 150 Companies Have SEED FundingMore than 150 Companies Have SEED Funding–50% of SEED Enterprises Have Launched 50% of SEED Enterprises Have Launched Products/ServicesProducts/Services–80% of SEED Enterprises Developing Patents/IPR80% of SEED Enterprises Developing Patents/IPR

ICSICS

Innovation Commercialisation SchemeInnovation Commercialisation Scheme

Encourage development and Encourage development and commercialisation of innovative commercialisation of innovative ideasideas

EDBEDB reimburses up to half of the reimburses up to half of the qualifying costs of supported qualifying costs of supported projects projects –Up to a maximum of $75,000Up to a maximum of $75,000

IDSIDSInnovation Development SchemeInnovation Development Scheme

EDBEDB Grant: provides co-funding to support Grant: provides co-funding to support innovation in products, processes and innovation in products, processes and applications. applications.

Eligible project costs include expenditure Eligible project costs include expenditure on manpower, equipment, intellectual on manpower, equipment, intellectual property and professional services. property and professional services.

Open to companies registered in Singapore. Open to companies registered in Singapore. Project must lead to the build-up of Project must lead to the build-up of innovation capabilities. innovation capabilities.

Co-funds costs related to innovation and R&DCo-funds costs related to innovation and R&D

Tax ExemptionTax ExemptionAll startup automatically qualify for this.All startup automatically qualify for this.

Start-ups in operation for less than 3 Start-ups in operation for less than 3 years can benefit from the tax exemption years can benefit from the tax exemption scheme. scheme.

100% tax exemption on the first S$100,000 100% tax exemption on the first S$100,000 of profits for up to 3 years. of profits for up to 3 years.

The program's objective is to encourage The program's objective is to encourage entrepreneurial efforts by relieving the entrepreneurial efforts by relieving the tax burden of young start-ups.tax burden of young start-ups.

IE SingaporeIE Singapore Double Deduction for Overseas Investment Double Deduction for Overseas Investment

–Deduction of taxable income (two times foreign investment) Deduction of taxable income (two times foreign investment)

Malaysia Singapore Third Country Business Development Fund Malaysia Singapore Third Country Business Development Fund (MSBF)(MSBF)

Local Enterprise and Association Development Programme Local Enterprise and Association Development Programme (LEAD)(LEAD)–Supports SMEs developing new industriesSupports SMEs developing new industries

Trade Credit Insurance (TCI) Trade Credit Insurance (TCI) –Protects against the non-payment risk of buyersProtects against the non-payment risk of buyers

Pathfinder programPathfinder program–Help nascent Singapore-based exporters increase overseas salesHelp nascent Singapore-based exporters increase overseas sales

LIS II – Loan Insurance SchemeLIS II – Loan Insurance Scheme

Government Schemes Government Schemes forfor

Growth Stage Growth Stage FinancingFinancing

LEFSLEFSLETASLETASLISLISGFPGFPRFSRFS

LEFSLEFS

Local Enterprise Finance SchemeLocal Enterprise Finance Scheme

Fixed rate financing (6.25%-6.75%) toFixed rate financing (6.25%-6.75%) to–Upgrade, strengthen and expand operationsUpgrade, strengthen and expand operations

SPRINGSPRING administered loans upto $15M administered loans upto $15M forfor–Buying new machineryBuying new machinery–Upgrading existing equipmentUpgrading existing equipment–General working capitalGeneral working capital

GFPGFPGrowth Financing ProgramGrowth Financing Program

Support early stage Singapore based Support early stage Singapore based companies with the potential for companies with the potential for global growth.global growth.

The ProgramThe Program– $2 (3$2 (3rdrd party) to $1 ( party) to $1 (EDBEDB) matching of ) matching of fund raisedfund raised– Maximum $1MMaximum $1M– Third party investor must put >= $500KThird party investor must put >= $500K

RFSRFS

Regionalisation Financing SchemeRegionalisation Financing Scheme

Help Singapore companies setup Help Singapore companies setup operations overseasoperations overseas

The Scheme (The Scheme (IE SingaporeIE Singapore))–Fixed-cost financing programFixed-cost financing program–Loan upto $10M for acquiring fixed Loan upto $10M for acquiring fixed assetsassetsPurchase of machinery and equipment Purchase of machinery and equipment Construction of Factories or buildingsConstruction of Factories or buildings