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More can be done to boost private funding: Investors

SINGAPORE — Serial angel investor Douglas Gan has been putting money into start-ups since 2001, in sizeable amounts of around S$25,000 to S$100,000 per investment. He invests only in Singapore-incorporated companies as they are more stable, but stressed that the companies he chooses need to have a globalised vision.

More can be done to boost private funding: Investors

Serial angel investor Douglas Gan is also the co-founder of beauty services booking platform Vanitee. He said that some of the
problems that angel investors face in Singapore are the difficulty in finding buyers and a lack of liquidity for trade. Photo: Nuria Ling/TODAY

SINGAPORE — Serial angel investor Douglas Gan has been putting money into start-ups since 2001, in sizeable amounts of around S$25,000 to S$100,000 per investment. He invests only in Singapore-incorporated companies as they are more stable, but stressed that the companies he chooses need to have a globalised vision.

As an entrepreneur himself — he is co-founder of beauty services booking platform Vanitee — Mr Gan now has investments in two start-ups, a fashion and a logistics company. Both businesses target an overseas market. 

Some of the problems angel investors face here, Mr Gan said, are the difficulty in finding buyers and a lack of liquidity for trade. 

He suggested that the presence of private exchanges may solve the problem, so that start-ups without much revenue may list themselves and get funding, while investors may sell without difficulty. 

“In the stock market, you can sell out anytime, regardless of the price … if there is liquidity, then the angel investing market will be even more vibrant,” he said.

Mr Wong Poh Kam, a seasoned angel investor as well as a professor at the National University of Singapore Business School and director of the school’s Entrepreneurship Centre, said that the entrepreneurship scene here has become more vibrant compared with a decade ago, and there have been generous government co-funding schemes for seed-stage investments such as the National Research Foundation’s Technology Incubation Scheme and Spring Seeds. However, there should be greater focus on “alternative” start-ups such as those in deep technology, he added.

“There has been no shortage of seed-stage venture investors in Singapore in recent years, but most of these are still concentrated on the Internet or mobile e-commerce types of start-ups, not start-ups that seek to commercialise ‘deep’ technologies coming out of universities and public research labs. 

“We need more public co-funding support for venture investing in deep-technology commercialisation,” Mr Wong said. 

Wavemaker Partners, an early-stage venture capitalist (VC) based in Los Angeles and Singapore, has been actively investing in the Republic since 2012. It noted that more could be done for certain regulations to help VCs.

Mr B Paul Santos, managing partner of Wavemaker Partners, explained, “Venture capital is regulated in Singapore, so we need a licence from the Monetary Authority of Singapore (MAS) to operate as a VC. Unfortunately, VCs have been lumped together with other kinds of fund managers (private equity, hedge funds, etc), so some of the regulations don’t work as well for us. 

“We’re hopeful that the MAS will make some changes soon as it has been actively engaging the VC community.”

On Thursday (Feb 9), the report from the Government’s Committee on the Future Economy suggested enhancing the financing ecosystem for the next generation of start-ups as one of Singapore’s economic strategies. 

Some ideas include providing a simpler regulatory framework for venture capital firms, and widening of the network for angel investors in Singapore to offer more support to start-ups.

Despite the issues that investors and VCs face, they still consider Singapore a reliable location for investments and a place of opportunity given its proximity to emerging markets.

Mr Gan said, “At least you can buy the data and information about the company (here), whereas for overseas companies, there are too many grey areas, uncertainties and regulation changes. Hence, Singapore-based companies are considered more stable.”

Mr Santos added that within Southeast Asia, Singapore is a “great place” for businesses to locate their corporate headquarters. “By being in Singapore, we believe we have a tremendous opportunity to meet and invest in some of the best entrepreneurs in the region.”

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