Lack of capital is one of the major reasons why most small businesses fail within just a year of launch. To securely put your foot in the door, one needs to first evaluate the options available to accelerate funding for your startup.
Asia Pacific (APAC) has seen the wake of a promising future, as many startup companies continue to arise, bringing innovation, agility, and diversity to the region. Despite the Covid-19 pandemic‘s disruptive effects on our lives, new talents are still emerging every day, driven by their endeavours and in 2021, Asia independently accounted for 45% of all unicorn startups globally, whilst North America alone represented 43%.
With the aid of incubators, accelerators, and other capital funding options available in the startup ecosystem, there is a fair chance of survival for entrepreneurs and innovators with the next big idea. Startup fundraising is expected to double this year compared to last year’s record of US$25.7 billion in Southeast Asia (SEA). Ample grants, schemes, and support are now available for the growing network of startups. This step-by-step guide offers insights on how to accelerate funding for your startup.
Self-Financing Your Startup
The best place to begin is to evaluate your personal finances. Starting a company does not only mean putting in your work and hours, but it also requires stable finances for the initial stages of your company’s launch. Many successful entrepreneurs, including Mark Zuckerberg, enforced the bootstrap approach to kickstart their companies, as an alternative to early-stage investments.
Bootstrapping works for newcomers looking to create a self-sustaining business utilising sweat equity, close-circle funding, and personal finances as initial capital, and optimising the use of existing resources. The model encourages businesses to focus on simplistic and flexible solutions for the early-growth stage and equips them to understand the capital flow and investments required for later stages.
In order to reduce initial expenses, many free-to-low cost channels are available, such as Voplus, whose services extend from company registration in Singapore and incorporation to the secretary and accounting resources for startups and small-medium enterprises (SMEs). JANDI assists with jumpstarting your company’s messaging and collaborative network to facilitate workplace communication.
Other practical budget-friendly platforms include Canva, an effortless design tool, Asana, a work and task management tool, and Google Workspace. Adding on to the list, flexible workspaces such as the Hive offer networking opportunities and optimal environments to grow your business and boost productivity.
Incubators and Accelerators
Incubator programmes help entrepreneurs launch their ideas by providing workspace, seed funding, and training solutions. Business accelerators follow a strategic plan for a defined period of time, designed to mentor startups and secure seed investments in exchange for an equity stake. Incubators focus more on innovation in the field, while accelerators assess the scaling of new businesses. The allocation of these services and resources builds direction for newcomers to help gain further traction and growth in the initial stages.
Startups face a dire chance at the continuity of their ventures within the first five years, and accelerator schemes raise their survival rate between 75% and 87%, as well as reduce launch and operation costs by up to 40-50%.
Many new businesses face humble beginnings, and as the number of freshcommers rapidly increases over time, so does the competition. Being able to stand out solely on the basis of innovation and invention simply will not suffice.
Brinc, a venture capital and accelerator firm supports and mentors new founders to build a strong portfolio and investment opportunities. The firm’s own funds, BrincArtesian and Arkley Brinc VC, together with partner investors, such as alternative investment manager Artesian Capital, digital software and venture capital firm Animoca Brands, and more, work to raise funds for tech-focused startups in their pre-seed to series A funding rounds. This provides the fundamental support needed to empower and enable growth within the newly established organisational structures.
Female Entrepreneurs Worldwide
Women-founded business and networking platform Female Entrepreneurs Worldwide (FEW) innovates and empowers women, entrepreneurs, to market their businesses and expand their community outreach. With a network of over 20 thousand influential women talent throughout Asia, FEW widens its scope by offering business consultations to multinational corporations (MNC) led by women entrepreneurs in many fields, driving an all-inclusive and sustainable community.
A 12-week incubation program is one of their initiatives that supports and encourages women founders in technology and innovation. This year’s theme is “Invest in Women Who Tech,” with a cash grant of HK$1 million, navigates women-owned startups in tech and provides opportunities for high-growth businesses to expand their reach in APAC.
Southeast Asian accelerator, Grow, is a leading platform dedicated to scaling growth and bringing investment opportunities to Agri-FoodTech startups in pursuit of sustainable and innovative FoodTech and AgTech solutions. Change happens in many stages, by applying this concept to their company they have designed a well-thought-out step-by-step guide to assist those on their entrepreneurial journey.
Support programmes offered include Idea Stage, for cultivating and kickstarting your startup, Regional, or Early Start, a 12-week virtual accelerator offering commercial opportunities to present your novel technologies. Grow also offers scale-up Stages where companies can receive up to USD$200 thousand in investment for refinement and expansion of their business models.
An entrepreneur-founded firm, SparkLabs is a leading accelerator introducing the World’s Largest Startup Demo Day event to facilitate technological innovation and conversations on trends and the future of technology, media, and telecommunications.
South Korea-based SparkLabs has successfully raised over US$730 million with accelerator programmes across the Asia Pacific, including Australia, Taiwan, Singapore, and more. Well acquainted with entrepreneurial struggles themselves, they have built a curated community for startups to assess, scale, and grow their business with the required financial support.
Venture Capitalists and Angel Investors
A great idea can make millions if steered in the right direction, however, finding the right investors creates a formidable hindrance for new entrants. In order to scale a successful startup model, funds are essential for growth and stability.
Venture capital (VC) firms help emerging networks by financing capital as a form of private equity for startup companies and SMEs, with the potential to thrive in the long run. It inevitably takes an important role in the development of the startup ecosystem, with a significant amount of capital being pushed into new technologies and innovation. In 2021, venture capital investments around the Asia Pacific region had witnessed a record high with total funding exceeding US$48 billion.
On a similar end, angel investors individually support small startups and entrepreneurs by providing financial aid in return for ownership equity, for the early growth process. Often a one-time investment, these funds raised help businesses to establish, and eventually elevate their positioning.
Hatcher+, a Singapore-based venture capital firm, is strongly data-driven, identifying early-stage partnership opportunities with their award-winning AI tech services to scout and secure possible investments for prospect startups. Their technology, VAAST™ Deal Scout, forms a syndication network of emerging business opportunities for investors and startups to discover around the globe. The processing-based algorithms enable easy search to alter your investments by sector, phase, and location preferences.
The leading SaaS-based tech platform funded over 20 thousand startups and generated over 120 investment opportunities. John Sharp, the Co-founder of Hatcher+, stated their mission is “to de-risk, democratise and revolutionise the VC industry with new levels of intelligent automation, data sharing and analysis with Hatcher+ and VAAST™.”
With over 90% of businesses being SMEs in Southeast Asia, this opens up the pathway for innovative tech to be integrated with emerging markets. Wavemaker explores the undertakings of the potential market in order to equip new talents with early-capital investments for them to scale their business models. As SEA’s leading early-stage capital provider, Wavemaker has successfully led significant investments that have strengthened and reframed the technological landscape.
The VC firm recently closed its fourth funding round at US$136 million, backing Southeast Asia’s fast-paced tech industry and startups. It has also previously raised funds for Vietnamese HealthTech startup, Medici, as well as Singapore-based cybersecurity startup, watchTowr.
Beacon VC, a Thailand-based corporate VC firm under Kasikornbank PLC focuses their investments on the expansion of SEA’s startup network. With the motto “to lead with experience and execution,” they commit to their cause by funding and advocating for founders through their well-tracked success rate, proficient execution, and excellent connectivity in the region.
The firm’s major emphasis is on the progression of startups and innovation in FinTech, consumer, and enterprise tech industries. Some of their exclusive projects include their partnership with superapp and tech firm, Grab Holdings, working towards a seamless FinTech ecosystem, as well as their recent Pre-Series A funding round for PRIMO, an omnichannel marketing tech startup creating solutions for large corporations.
AngelCentral is an investment network that empowers its investor-members via curated deal sources and sectorial learnings. It organises monthly pitches and quarterly learning programs to sharpen the angels’ investment capabilities and provide syndication administration support.
For interested startups, the platform organises a monthly startup pitch event, accessible to member investors only. All funding applications are vetted personally by the Partners of the platform, and selected startups will get the opportunity to introduce tech-innovative business ideas to potential investors at the closed-door event. Startups have benefited from a fruitful growth rate with AngelCentral, having featured 500+ startups on its platform, about 30% having successfully raised with its members.