Singapore has earned its reputation as a global hub for business, with the distinction of being ranked first for economic freedom. Entrepreneurs are drawn to Singapore’s comprehensive support system, which has business-incubating infrastructure, tax incentives, substantial government subsidies, and strong international connections.
In this guide, we’ll explore the diverse startup programs available in Singapore. This article serves as a resource for aspiring entrepreneurs eyeing Singapore as their business launchpad.
Startup SG Founder
The Standards, Productivity and Innovation Board Spring (SPRING) consolidates various startup assistance programs. The initiative aims to provide Singapore-based startups access to diverse funding sources and mentorship programs, nurturing innovative concepts into prosperous companies. Startups qualifying under Startup SG can access cash grants, equity financing, and business loans.
Policy Details:
Startup SG Founder stands out as one of the most popular schemes, extending funding of up to $50,000 SGD to startups while providing access to valuable resources and mentorship programs. The program has two distinct courses:
The “Train” Track: Tailored for entrepreneurs prepared to launch with viable business plans, this track involves a 3-month venture-building program where participants receive a monthly stipend of $1,500 SGD.
The “Start” Track: Geared towards entrepreneurs with innovative business ideas, this track offers a starting capital of $50,000 SGD by Enterprise Singapore and support from an Accredited Mentor Partner (AMP) of the entrepreneur’s choice.
Venture Builders and Accredited Mentor Partners (VB-AMPs) play a crucial role in the success of the “Train” track by offering Venture Building courses. These courses are built to enhance innovation by supporting idea generation, business scalability, capital raising, and consumer validation.
Eligibility criteria:
- The individual applying must either be a Singapore Citizen or a Singapore Permanent Resident.
- The applicant is required to possess a minimum of 30% shares in the company.
- The company should maintain at least 51% local shareholding.
- At the time of application, the company must not have been incorporated for more than six months.
- The primary business operations of the company must predominantly take place in Singapore.
- The applicant should not have previously registered any business entity or received funding from any other government organization.
- The individual applying must play a key role in making decisions within the company.
Startup SG Tech Grant
Startup SG Tech, a key initiative for technological firms in Singapore, underwent enhancements in 2017 to facilitate better cash flow for successful applicants. This grant is crucial in supporting the early-stage development and commercialization of proprietary technology solutions, encouraging innovation and sustainable business models.
The program encompasses both Proof-of-Concept (POC) and Proof-of-Value (POV) grants, catering to the diverse developmental stages of technology.
Grant Details:
Startup SG Tech operates as a competitive grant program, offering financial support to tech startups aiming to expedite the development of their proprietary solutions and establish scalable business models.
The grant facilitates advancing innovative technology solutions, driving startups toward market disruption or creating entirely new markets.
Companies can receive funding for both POC and POV projects, with POC projects focused on testing the technical and scientific viability of new technology, garnering funding of up to S$250,000.
POV projects, designed to test the commercial viability of lab-proven technology, can secure funding of up to S$500,000.
Eligibility Criteria:
- To qualify for Startup SG Tech, companies must adhere to specific criteria, including being a registered Singapore company less than 5 years old, operating in Singapore, and having at least 30% local shareholding.
Supported sectors for financial assistance under SG Tech include advanced manufacturing, biomedical sciences, clean technology, information and communications technologies, precision engineering, transportation technology, and food science and technology.
Early Stage Venture Fund (ESVF)
The Early Stage Venture Fund (ESVF), an instrumental initiative in Singapore’s startup ecosystem, is designed to provide crucial financial support to early-stage high-tech startups.
Administered by the National Research Foundation (NRF), the fund channels a significant investment of $10 million on a matching basis. This investment is directed toward seeding corporate venture capital (VC) funds that, in turn, invest in Singapore-based early-stage high-tech companies.
Key Features and Flexibility:
One notable aspect of the ESVF is its flexibility and investor-friendly terms. Startups benefit from a matching scheme where NRF invests on par with other investors in the venture capital fund.
A distinctive feature of this initiative is the option for the VC to buy out NRF’s share of the fund within five years, returning NRF’s capital with interest. This flexible arrangement fosters a conducive environment for both startups and investors, promoting growth and sustainability.
Eligibility Criteria:
- To access the ESVF, venture funds must be registered in Singapore and demonstrate strong financial management and commitment.
Business Improvement Fund (BIF)
The Business Improvement Fund (BIF), spearheaded by the Singapore Tourism Board (STB), supports technology innovation and reshapes business models in the tourism sector.
Aimed at enhancing productivity and competitiveness, the fund welcomes all Singapore-registered businesses and companies with projects distinctly focused on tourism. It includes two primary categories: tourism companies undertaking capability development initiatives and technology companies contributing innovative products and services tailored for the tourism sector.
Eligibility and Criteria:
- The evaluation process centers on the project’s potential to improve the productivity and competitiveness of tourism entities. Successful applicants receive grant funds on a reimbursement basis, contingent upon achieving agreed-upon project deliverables and milestones.
Startup SG Equity Scheme
Launched in 2017, the Startup SG Equity scheme operates through two interlinked modalities.
Co-Investment: The government actively co-invests in qualifying startups in partnership with independent third-party investors. This collaborative effort injects crucial financial resources to help the expansion of startups.
Fund-of-Funds: The program directs investments into select venture capital firms, adopting a fund-of-funds approach. This intricate strategy amplifies opportunities for startups, providing not just capital but also expert guidance. Key stakeholders, including SEEDS Capital, SGInnovate, and EDBI, play roles in steering these initiatives.
The government’s involvement takes two forms:
Co-Investment Rounds: For startups improving existing technologies, the government contributes 70% of funding in the initial round (up to S$250K), followed by a dollar-for-dollar investment with private investors (up to S$2 million).
Deep Tech Category: Startups classified as “deep tech” receive 70% funding in the initial round (up to S$500K), followed by a dollar-for-dollar investment with private investors (up to S$4 million). Deep tech companies are defined by their development of products based on unique and hard-to-reproduce scientific or technological breakthroughs, often requiring extended research and testing periods.
Eligibility criteria
- Be a Singapore-based company with core operations conducted in Singapore.
- Be incorporated as a private limited company for fewer than 5 years.
- Maintain a paid-up capital of at least S$50,000.
- Demonstrate substantial innovation and intellectual property.
- Abide by ethical standards, avoiding involvement in activities against the law or public interest and refraining from being a subsidiary or joint venture.
In conclusion, Singapore‘s dynamic startup ecosystem continues to attract global attention, offering a blend of financial support, mentorship, and innovation-driven programs. Aspiring entrepreneurs can leverage initiatives like Startup SG Founder, Startup SG Tech, Early Stage Venture Fund (ESVF), Business Improvement Fund (BIF), and Startup SG Equity to push their ventures to new heights. Government-backed incentives, and strategic collaborations, Singapore are considered to be an ideal launchpad for startups aiming for growth, sustainability, and international success. Entrepreneurs planning their journey in the Lion City can tap into these diverse programs, creating a solid foundation for innovation and business excellence.
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