Photo : CHU LUCK SENG / THE EDGE SINGAPORE
Ko (right) at the presentation ceremony for the second set of start-ups selected for SEEDS funding
TheEDGE Singapore ~ Mar 04 2002
|
Photo : CHU LUCK SENG / THE EDGE SINGAPORE
Ko (right) at the presentation ceremony for the second set of start-ups selected for SEEDS funding |
BY OON YEOH
There's been much talk lately about the need for Singaporeans to look beyond the so-called 5Cs careers, condos, clubs, credit cards and cars in order for the "Remaking of Singapore" to be successful. There's also been quite a lot of buzz about entrepreneurship and how to encourage it.
Economic Development Board (EDB) managing director Ko Kheng Hwa thinks the formula lies with what he calls the 5Gs. Adopting a gardening analogy, Ko last month said the first step was to help a seed Germinate, next to help it Grow, then to make it Glow, finally to help it Globalise. But, before any of these things can happen, he said, there needs to be a Greenhouse to provide conducive conditions for it to thrive.
"Our aim must be simply to make Singapore one of the best places in the world to start and grow a business," Ko said last month during a presentation ceremony of the EDB's Startup Enterprise Development Scheme, better known as SEEDS.
The event marked the selection of a second set of 10 start-up companies the EDB would be investing in. This came just two months after it chose its first set of 10 start-ups.
The total amount that will be disbursed to these 20 companies is $5.1 million, which represents just a little more than 10 per cent of the $50 million the EDB has set aside for its SEEDS programme, launched in September last year. So, there's still plenty of money to go around to qualified start-ups.
The programme aims to fill a glaring gap that's plagued the wider IT sector ever since the dotcom bubble burst -- a dearth of funding for start-up companies in their formative stage.
During the go-go days of the Internet mania, venture capitalists went ga-ga over anything to do with start-ups. These days, they just say bye-bye to such ventures. Hence the need for SEEDS.
But SEEDS is no charity programme. To ensure market forces are at play in determining who deserves to get funded, the EDB has decided to let the private sector take the lead. "It is the third-party investors from the private sector, not the public sector officers at the EDB, who will identify, evaluate and decide which promising start- ups to back and invest in," Ko said.
SEEDS will then match every dollar the private investor has put into the start-up, up to a maximum of S$300,000. Both the EDB and the third-party investor will take equity stakes in the company in proportion to their respective dollar amount of investment.
Most of the start-ups funded have so far been IT- or Internet-related. Among the exceptions is Sino Strategic Consulting, part of the first set of 10 start-ups selected. The company is a business consultancy that helps Chinese companies invest in Singapore and vice versa. To qualify, a start-up has to have the following features:
The start-up can be owned by local or foreign shareholders, but it must be incorporated in Singapore, and must carry out its core activities here. For example, if the company were to grow to a stage where it can do global business, its headquarters as well as its highest value-added resources (such as intellectual property and top management) should all reside in this country.
Ko equated the role of the EDB to that of a gardener, whose job is also to remove the impediments of growth for new ventures. "We have to pull the weeds, prune the hedges, etc in our greenhouse," he said. "Here we are continuously reviewing government rules, regulations and red tape that may stifle entrepreneurship.