For those new to Singapore’s startup ecosystem, 17 entities, including TRi5 Ventures, were recently appointed as Accredited Mentor Partners (AMPs) by SPRING Singapore to administer the SG Founder $30k grant.
It may sound glamorous or prestigious to be appointed as an SG Founder AMP, but it is honestly far from that in reality. There is a lot of work to be done, without compensation, and just barely a few months, the SG Founder program received a negative start.
Lim Der Shing, a well-respected member in the startup scene, highlighted unfair terms offered by an undisclosed SPRING AMP. For putting no money, the AMP wanted 3% equity at full rachet for administrating the grant.
His post had good intentions to alert startup founders that the terms offered were unreasonable. It was also wrong for the AMP to abuse the position to obtain unfair terms.
TRi5 Ventures agree with Mr Lim and abhors such terms. Its own terms for the SG grant are clearly indicated, which includes strict accountability on taxpayer’s money.
Challenging expectations set on AMP for SG Founder grant
What prompted this AMP to produce such unfair terms? Is it out of a mercenary nature or there were other factors involved? It might shed some light if one understood what is happening behind-the-scenes.
TRi5 Ventures, via its previous incubator Angels Gate Advisory, and a number of the AMPs were former iJAM incubators, a government grant that offered up to S$150k in grant money. If you look at the comparison table, you would find a significant drop in the grant offering.
AMPs are now expected to seek out first-time entrepreneurs, as compared to iJAM’s serial entrepreneurs, thus increasing the risks of failure. Furthermore, the grant offering has fallen to just $30k instead of a potential $150k, further weakening the chances of a startup that can survive or even produce an MVP.
Furthermore, AMPs are expected to search, assess, mentor startups and administrate the grant, all without any compensation.
This may explain why this particular AMP set those unfriendly terms, given the amount of effort and risks he takes.
So why bother to even be an AMP? With an added negative perception that AMPs who are out to abuse the system, or being assumed to approve startups which are of lower quality for the grant.
Let SPRING fall on its own back for issuing such a policy, some might decry. In all capitalist thinking, a sensible VC or incubator should never take up the offer to be an AMP in the first place. There are so many better startups out there to work with. Singapore-based foreigner startups that have high tractions and cheaper cost quality teams operating in a huge developing market are one such lucrative segment to invest in.
Building a new generation of deeply-rooted Singapore entrepreneurs for Singapore’s economic defence
For the last six years, I have been a Singapore ecosystem evangelist. I have written over 85 articles on the ecosystem and working with the government on various fronts to support Singapore’s startups.
Despite these negative factors plaguing the AMP, I would like to share a broader perspective of the importance for a SG Founder grant. To add on, it is also essential to engage the government to grow and support Singaporean entrepreneurs.
My Heartware Singapore series highlighted Singapore was built by entrepreneurship. But entrepreneurship is not a regarded career in the present day. Heavy initial financial commitments, the perception of shame from failure and many other stable job opportunities deter Singaporeans from choosing entrepreneurship.
As an open economy, Singapore welcomes foreign entrepreneurs to build and raise funds for their businesses. But foreign-born entrepreneurs raise as much as ten times more than the best Singaporean-born entrepreneurs. And while this is a positive economic benefit, are the foreign-born entrepreneurs deeply rooted enough to care for Singaporeans?
Singaporean entrepreneurs are needed to build together a nation’s economy and through their successes, bring economic prosperity to its people. And there is an urgent need to build that generation of entrepreneurs to take reign of Singapore’s economy.
The uniqueness of Singapore entrepreneurs – lessons from the iJAM days
TRi5 Ventures is not new to grooming the next generation of entrepreneurs. Our affiliate, Angels Gate Advisory, supported 38 Singapore startups to obtain the iJAM grants of up to $150k. We worked tirelessly and freely with these 38 startups to obtain S$7.5m in follow-on funding and grants.
Those six years gave TRi5 deep insights on how Singaporean founders work at the beginning stages of their entrepreneurship journey.
Comparing 800 startups from our free advisories across the region, there are unique characteristics among Singapore entrepreneurs. Singaporeans are born in a sheltered environment with a clear path of a structured education to a promising career. This make them lack the tenacity or street smarts to run a business. The Singapore upbringing takes those qualities away.
I see similar patterns in the over 30 Singaporean entrepreneurs that I have mentored. It takes a long-term mentorship and much encouragement to break the Singapore mindsets.
An entrepreneur in Singapore goes up against traditional beliefs to find an iron rice bowl career, and not to fail. To further add, in an expensive Singapore, running a startup needs capital, great mentorship, belief and encouragement to grow.
It is important to recognise that Singaporeans take a longer time to get into the entrepreneurial mode and shed off the traditional mindset that the education system and society had crafted them. Positively, Singaporeans have talents and critical thinking, which can be harnessed into a greater good.
SG Founder Grant a critical start for entrepreneurs
There were over 400 iJAM startups in the program and there are known graduates like Zopim and CoAssets who have succeeded.
One might point out other factors that contribute to their success other than the iJAM grant, but no one can deny it played a starting point.
The SG Founder grant is similar, which is to aid entrepreneurs on that first-time journey, to kick-start a business. As part of the grant, it appoints AMPs to mentor and guide the startups to grow.
It’s benefits are a far cry from the iJAM program, and AMPs suffer for administrating this grant. But at this stage, it is one of the rare few channels that will give Singaporean entrepreneurs a chance to start something.
Angel investors are still new to the scene and have lower risk appetites which limits the initial funding to kick-off. Typical Singaporeans have heavy financial commitments, which further limits them to use their own savings to startup.
Criteria still remains high
Does that mean that the TRi5 Ventures is going to provide funding based solely on their Singaporean identity? On the contrary, there are still strict requirements. Over 40 startups have applied, and only 4 qualified for it.
TRi5 Ventures spend a good number of hours honing and preparing potential startups via its unique methodology. All this for no return or payment. Rather, startups receive a S$10k investment from TRi5 to show we have skin in the game.
If anyone accuses AMPs for abusing the system, think once again on the enormous effort for little returns. I am sure other AMPs feel the same way on the work set out for them.
Leaving a legacy behind
It is an un-viable commercial venture being an SG Founder AMP. It is frankly – a shitty job, one has to commit resources to build a risky venture. Furthermore, startup founders may not be grateful for the help given.
But the greater importance of nation building outweighs the sacrifice. It is a starting point for new entrepreneurs in their journey. With the in-building of skills and mentoring, these founders could potentially run Singapore’s economy.
We all want to make money, and may be successful for our efforts. But to this end, what legacy do we wish to leave behind while pursuing profits?
This is the 8th article of the Heartware Singapore series, where the author shares on different topics to spur the Singapore startup ecosystem.