According to an annual national graduate careers survey conducted in 2019 by GTI Media Singapore, interest among local youth to start or join a startup has never been higher. Therefore, it is unsurprising to find the youth entrepreneurship ecosystem in Singapore thriving. Today, we will explore some possible reasons behind this growth by examining various aspects of the ecosystem.
What do Carousell, Shopback, and 99.co have in common? They were founded by fresh graduates. Their startup turned out to be their very first career too. Along with other startups such as e27 and Xfers, the increasing number of young entrepreneurs coming from universities is no mere coincidence. In fact, it is a by-product of initiatives put in place by schools to cultivate the entrepreneurial spirit of millennials today. Since the founding of the NUS Overseas College (NOC) in 2002, there has been a growing emphasis by universities on entrepreneurship. Student clubs such as the NUS Entrepreneurship Society (NES) has grown to become one of the largest in the local university scene, thus showing that today’s youth are increasingly interested in joining the startup ecosystem.
It is not only the entrepreneurship side of the house that gets increased attention. Venture capital (VC), an important piece of the ecosystem, is getting eyeballs too. Originally started out as a pilot project by SMU in 2017, Protégé Ventures has grown to be the first student-run venture fund in Southeast Asia. Besides training students in VC investing, they support student entrepreneurs in building their companies too. The presence of Protégé Ventures and the student entrepreneurship clubs contribute to a growing and thriving youth entrepreneurship scene in Singapore.
Upon exiting the university ecosystem, startups need to get the right support and funding. From accelerator programmes by corporate giants such as Singapore Airlines (SIA) and DBS Bank to incubator programmes by global early-stage VCs such as Antler, there are many opportunities for startups and young founders. These programmes are helpful to fuel the next stage of growth for these budding startups due to the mentorship, network, and market access that they provide. Furthermore, acceptance into an incubator or accelerator programme can serve as a validation of the startup’s initial business model and instil confidence in young entrepreneurs for expansion.
Mentors can play a key role in helping startups to succeed due to their background, expertise, and experience. There is a growing pool of mentors, with varied startup, investing, or corporate experiences. Such experienced mentors will help accelerate the learning curve for youth entrepreneurs. The Startup SG Founder scheme by Enterprise Singapore also provides startups access to mentors through the Accredited Mentor Partners. This is in addition to private sector efforts in VCs and accelerators as well as IHLs and student entrepreneurship clubs. Therefore, youth entrepreneurs should tap on these opportunities and mentors to help them in their entrepreneurial journey.
Research has shown that one of top reasons why startups fail is due to a lack of cash. Therefore, having sufficient funding is a key driver for startups to succeed. This is especially so for early-stage startups given the high burn rate at the beginning due to the inability to achieve economies of scale. Often, founders begin by bootstrapping and not taking a salary for months. However, external funding will help fuel the next phase of growth. Out of the plethora of government grants to assist startups, the Startup SG Founder grant is the most relevant for youth entrepreneurs. It provides first-time entrepreneurs with a grant of up to $30,000 on a 3:1 co-matching arrangement. Therefore, to receive the maximum value of the grant, entrepreneurs need to raise and commit $10,000 to the business.
Private equity for local startups is increasing with the influx of angel investors and VC firms. Angel investors are high net worth individuals who invest in startups at their seed stage. They invest in early-stage companies before there is a proven success of the business model. Therefore, angel investors are advantageous to startups, particularly in the deep-tech sector, that requires significant capital for a proof-of-concept to validate their business model. Notable angel investor groups include Business Angel Network South East Asia (BANSEA), Asia’s oldest angel investment network, and AngelCentral.
For later stage startups that require larger capital for scaling, founders turn to VCs to pitch their ideas. There is a diverse range of VCs investing in local startups. From global VCs such as 500 Startups and Sequoia Capital to local players such as Monk’s Hill Ventures and Jungle Ventures, this is a testament of the strength of the local startup ecosystem. Those requiring more resources can also check out SEA Investors, home to a database of startup investors based in the region.
Youth entrepreneurs in Singapore are fortunate to be in a thriving and supportive ecosystem. The abundance of public resources shows that the government views startups as the next driver of economic growth and employment. Singapore also possess a highly skilled workforce, which will supplement the rise in startups, particularly in the deep tech sector. Universities are also increasing focusing on data analytics and artificial intelligence. Therefore, the future does look bright for youth entrepreneurs in the little red dot.
This article was first published on e27.
Tun Yong Yap
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