Raising Funds For Great Ideas
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SCS Digital Media Chapter Talk 23 March 2012
“Raising Funds For Great
Ideas”
Bill Liu
Chairman & Managing Partner
Stream Global Pte Ltd
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Content
Introduction to Venture Funding
Eco System For Funding
– Private Investors/Government Schemes
Investor’s Criteria
Funding of Innovations/Start-Ups
– Stream Media
– Taggo
– SyQic Capital- (IPTV)
– Others
Lessons Learnt
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Financing Mechanisms at different stages of
the Start-Up process
High
Low
Level of Investment Risk Assumed By Investor
Seed Start-up
Early growth Established
Stage of Development of Entrepreneurial Firm
Commercial Banks
Equity Markets
Non-financial Corporations
Venture Capitalists
Business Angels
Founder, Friends, and Family
Source: Onasbrugge et. al. (2000)
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Venture Capital Investing During Dot com Boom
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Singapore’s Funding Eco System
Business Plan Competitions
Angel Investors (also Friends & Family)
Incubators
First Stage Funding – Venture Captial, Bank Loans
Government Support
–Equity, Debt, Tax Incentives
Growth (Late) stage funding
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Business Plan Competitions Startup @ Singapore
– Since 1999: 2200 teams and 7000 participants todate
– Grand winner $30,000, annual competition, Organiser: NUS Entrepreneurship Centre
Lee Kuan Yew global business plan competition
– US$60,000, (1st Prize US$36K)
– biennial competition
– Organiser: SMU Institute of Innovation & Entrepreneurship
ideas.inc. Business Challenge (NTU)
1st prize S$15,000, (+ $15K for prototype for
semi-finalists). Finalists get YES grants of $50K
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Incubators– lowering initial costs
Provide workspace and shared administrative resources
Help with fund-raising and marketing
General mentoring and guidance
About 100 incubators in Singapore
Singapore’s Hotspots
– Fusionpolis – Biopolis/Science Park – NRF TIS Scheme of 7 Incubators – NTU’s Technopreneuship Centre – NUS’ Entrepreneurship Centre – SMU Business Innovation Generator – The Enterprise @ Jurong East – iAxil @ Singapore Science Park – iHub @ Jurong East – Phase Z.Ro @ one-north – Soho @ Central – Technopreneur Center @ Ayer Rajah – Technopreneur Center @ Bukit
Merah – Technopark @ Chai Chee – Suntec City
"HOT" stands for
"Hub of Technopreneurs”
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Private Investors
Angel Investors
Venture Capital
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Where to find them?
BANSEA – Business Angels Network of South East Asia –Annual membership Fee $200 –Membership Benefits
Information on deal flows & overseas contacts Seminars & Networking Events
ACE - Action Community for Entrepreneurship
–Annual Events like BlueSky Innovation
SVCA – Singapore Venture Capital and Private Equity Association
DEALFLOW CONNECTION
–An online Interactive platform to match fund seekers (eg Start-Ups, SMEs, etc) with sources of finance –finance ranging from debts, equities, OTC, venture funds, private placements as well as financial institutions. –http://www.dealflow.org.sg
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Government Schemes for
Start Ups In Singapore
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NRF Technopreneur Incubation Scheme
(TIS)
Administered & Sponsored By National Research Foundation (NRF)
Start-Ups less than 5 years old and less than $5M revenue
Incubator, (eg Stream Global) co-invest with NRF in a start-up, where NRF funds 85% (up to S$500K) and Incubators funds the remaining 15% (S$88K)
Funding is in the form of convertible Bond Bond is redeemable by Incubator Within 3 Years @ 5%
interests p.a. Else NRF shall convert it into equity stakes in the Co. Founder must have substantial (> 50%) stake in the Co. 7 Incubators are into ICT, Digital Media, Clean Tech,
Biotech, etc (Another 8 Incubators just added!)
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SPRING Standards, Productivity and Innovation
Board, Singapore
Focus is to champion enterprise formation
and growth
–Funding resources
–Network of valued relationships
Works with partners to
–Help enhance the productivity and innovation and capabilities of enterprises
–Increase access to markets and business opportunities
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Startup Enterprise Development Scheme (SEEDS)
Administered By Spring $ match for funds raised with a third party investor Minimum of S$75,000 from third party/parties with initial funding of
$300K Maximum funding of $1 million SPRING SEEDS Capital will match $2 for $1 raised by the company SPRING SEEDS Capital and the third-party investor(s) will take equity
stakes in the company in proportion to their investments Start-Ups less than 5 years old Have paid-up capital of at least S$50,000, but not more than S$1
million Todate
– 185 Companies Received SEED Funding Since 2001 Totaling S$63M
–More than 50% of SEED Enterprises Have Launched Products/Services
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Young Entrepreneurs Scheme for Startups (YES)
A S$25 million Entrepreneurial Talent Development Fund (ETDF) To encourage entrepreneurship among Singapore youths by providing seed money to co-fund their startups
Grant of up to S$50,000 to turn Innovation/Idea into a business Singapore Citizens or PR below 26 years 1st-time entrepreneurs & Co less than 6 months Holds at least 50% equity at the time of application & will
continue to do so for 18 months from time of funding
SPRING Spore will match S$4 for every S$1 raised through self-funding, schools or third-party sources, the grant is capped at S$50,000.
At least 50% raised comes from School/IHL
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Media Development Authority (MDA) iJam (& soon iJam Reload)
Scheme supports startups in their exploration of feasibility of technologies and ideas that have the potential to create business disruption and bold new Industry‘ in Interactive Digital Media (IDM)
Up to S$50K for qualifying costs for IDM innovation/
Prototype for Singapore based start-ups
Funds facilitated by Mentor Companies (10 appointed)
Must exhibit R&D in either technology, creative, social or business model
Can further tap grants from other schemes , viz Development Assistance, Production, Marketing & Talent Assistance Schemes
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IDA Infocomm Start-up Programme (iSTART)
iStart is a multi-pronged approach aimed to assist, facilitate and nurture Singapore's ICT start-ups by increasing the
depth and potential of our start-ups through various programmes and initiatives:
- Creating Business-Savvy Entrepreneurs
- Market Access for Start-Ups
- Leveraging International Technologies to Accelerate Go-To-Market
- Grooming the Local Developer Community
Creating Vibrancy and Providing International Platforms for Start-Ups
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Business Loan Scheme For Low Income - MicoCredit Business Scheme (MCBS)
Person earning less than $30K p.a. & age > 18 years
Loans from $5K to $50K (no collateral needed)
8%+ p.a. interests
$5 M funding from Tote Board, administered by POSB
MCBS teaming up with Chinese Development Assistance Council, Mendaki & Singapore Indian Development A to Asociation to reach out to more Singaporeans
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Tax Exemption
All startup automatically qualify for this.
Start-ups in operation for less than 3 years can benefit from the tax exemption scheme.
100% tax exemption on the first S$100,000 of profits for
up to 3 years. a further 50% exemption is given on the next $200,000
on a qualifying company's normal chargeable income
The program's objective is to encourage entrepreneurial efforts by relieving the tax burden of young start-ups.
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IE Singapore Double Deduction for Overseas Investment
– Deduction of taxable income (two times foreign investment)
Malaysia Singapore Third Country Business Development Fund (MSBF) Jointly With Malaysian Industrial Development Authority (MIDA).
Local Enterprise and Association Development Programme (LEAD) – Supports SMEs developing new industries
Trade Credit Insurance (TCI) – Protects against the non-payment risk of buyers
Pathfinder program – Help nascent Singapore-based exporters increase overseas sales
LIS II – Loan Insurance Scheme
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Government Schemes for
Growth Stage Financing
LEFS
LETAS
LIS
GFP
RFS
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What Does A VC Look For?
$$
Growth
People
Product
????
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What does a VC look for?
The management team
– More important than the idea, product
Business plan – realistic? executable?
Intellectual Property Rights – Barrier to entry?
Scalability, Market Reach
Free of Constraints and roadblocks i.e. legal and regulatory issues
Exit Plan- Trade Sale, IPO, M&A?
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Global Mobile In-App Payment Solution
www.movend.com
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MoVend: Mobile Vending Machine
We build MoVend to be the vending machine on mobile To enable mobile transactions at every corner of the world
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Handling multiple currencies, exchange rate and business rules
• Various forms of SDKs and API to reach out to customers
Global m-commerce is complicated
• Various types of payments
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“Arggg! Google In-App Payments API is being a royal pain..…” - Kyle @stockholmux on Twitter, 19-Feb 2012
• Developers spend on average 2-4 weeks integrating ONE payment SDK per application
• For China, Taiwan, Korea, Japan, Amazon and variety of major geographical appstores, each come with their own SDK, and the payment flows are different
Facts
How are you going to solve this problem?
What if there is a single, integrated platform?
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Features of MoVend
Aggregate payment solutions around the world into one SDK
• Manage local currencies and flexible pricing
• Digital rights management in-built
• User management tools including parental control
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Multi-platform Support
Today, MoVend supports
MoVend will also support
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LEFS Local Enterprise Finance Scheme
Fixed rate financing (6.25%-6.75%) to
–Upgrade, strengthen and expand operations
SPRING administered loans upto $15M for
–Buying new machinery
–Upgrading existing equipment
–General working capital
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What Does A VC Look For?
$$
Growth
People
Product
????
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31
Our Key Differentiation
Providing mentorship to entrepreneurs to help develop and refine their strategies and business models
Assess and critique their technology, product and solution Determining the best practices & operational procedures Providing entrepreneurs with extensive network of contacts Fund raising & Value Creation What Are We Looking For? Committed and passionate Individuals with solid technical or
business background Innovative, differentiated or big ideas that has high growth
potentials Ability to build proprietary and strong IP
Our Role With Our Incubatees/Investees :
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Get your fan discount when you pay. Simply give your mobile number to the cashier. Patents Pending
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Free for merchants!
Sponsored by banks and financial institutions.
Credit Card Networks
Banks
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Fans get bigger discounts Charlie Brown Café, Singapore
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Because merchants get word of mouth advertising on Facebook
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Fan clubs powered by PayPal
Merchants offer bigger discounts to fans, and get free Facebook advertising, sponsored by PayPal.
Merchants will soon be able to partner with a number of banks and financial institutions using Taggo.
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Taggo word of mouth campaigns are far more effective than other methods
Jessica got an exclusive fan benefit at Jolt Fashion with ABC Bank. Sometimes the best things in life are discovered through friends.
10X higher click-through rates than
traditional banner ads.
20X higher click-through rates than
average Facebook ads.
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VS
Value added advertising that promotes the bank and its retail partners
Jessica got an exclusive fan benefit at Jolt Fashion with ABC Bank.
Jessica Tan
- ABC Bank
Jessica escaped to Italy at Giovanni’s Pizzeria with ABC Bank.
Jessica Tan
- ABC Bank
Jessica is getting fit at Paradise Gym with ABC Bank.
Jessica Tan
- ABC Bank
Without Taggo, Facebook ads
only promote the bank.
Jessica Tan likes ABC Bank
ABC Bank
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SyQic Capital Discovering Audiences, Uncovering Content
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Building Subscriber Mass
SyQic operates and manages all aspects of video delivery over the internet to multiple devices, across multiple networks via its proprietary platforms:-
• Yoonic OTT IPTV – currently deployed for PLDT (Philippines) and Telekom Malaysia
• YooMob – currently deployed for Maxis (Malaysia)
All these deployments will build up subscriber mass quickly and efficiently, utilising telcos’ customer base and marketing resources
What It Does…
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YooMob
YooMob offers viewing of live and VOD channels optimized for mobile streaming
High Quality streaming even at low bitrates to access the masses
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Yoonic Storefront – The Content Hub SyQic is now working on engaging end-users directly by deploying its own Storefront
The Yoonic Storefront aims to be the centre of video distribution and consumption, linking the content providers with consumers
Leverage on the subscriber mass built up from SyQic’s current deployments with telcos for a headstart
Telcos will still be part of the ecosystem, benefiting from increased bandwidth consumption and consumers from other markets
SyQic’s Value Proposition…
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The Ecosystem
YOONIC STORE-
FRONT
Broadcasters
Content Providers
Consumers
Supplies
content to
Yoonic
Storefront
Supplies
content to
Yoonic
Storefront
Yoonic Storefront will
provide CMS and
supporting services to
manage the content and
make it available to
consumers
Consumers will have the
opportunity to access a
variety of content
Telcos / ISPs
Provide
access and
QoS
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Some Major Clients
PLDT
Smart Communications
Telekom Malaysia
Maxis
Indosat
Globe Telecom
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The People
a Team that can execute
Management Team 40 years combined operations experience in Broadcast the TV & Radio industry
Operations Team Highly experienced operations & project management background
R&D Team Pioneer in P2P-CDN software & middleware development
Advisory Team Strategic stakeholders with relevant industry experience and well networked to
make things happen
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Why did we invest?
The management team
– More important than the idea, product
Business plan – realistic & executable
Intellectual Property Rights – Barrier to entry
Scalability & Market Reach Potentials
Exit Plan- Potential Trade Sale & M&A (IPO?)
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Why Some Ventures Fail To Get Funding?
Lack Clear Business Model
“Mee Too” Business, Little Differentiation
Unrealistic Valuation
Weak Team, Lack Leadership, Not Receptive To New Ideas/Advice
Business Not Scalable
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Reasons for Start-Up Faling
Execution, execution, execution
– Commercialization of new technology is also an art!
Teamwork/Management Team
– Non: cohesive, co-operative and focused
Costs outstrip revenue
Unwilling to change course or take remedial action
Regulatory barriers/approvals
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Stream Global’s Mission & Vision
Premier S’pore based
Venture Catalyst In
IDM & emerging ICT
2007
Vision
Mission Grow a STREAM of highly promising start-up companies based in ASEAN but with GLOBAL reach; focusing on Interactive Digital Media/Emerging ICT sector; partnering with passionate & capable entrepreneurs & delivering exceptional medium-term ROI to shareholders.
2008 2009 2010 2011 2012
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Thank You For Your Attention!