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The Business Angels Scheme (BAS) aims to stimulate entrepreneurship and technopreneurship in Singapore through proactive business angels’ investment. It is a S$30 million fund administered by SEEDS Capital Pte Ltd, a wholly owned subsidiary of the Singapore Economic Development Board (EDB).
Under the BAS, self-formed groups of established and experienced business angels undertake to commit at least S$10 million to a Business Angels Fund. For interested business angels, please refer to Qualifying Business Angel Funds.
Companies approved by Business Angels Funds for investment will have in-principle approval for dollar for dollar matching from SEEDS Capital up to a maximum of S$1 million per start-up. Both SEEDS Capital and the Business Angels Fund will take up equity stakes in the start-up, the percentage of which will be in proportion to their respective dollar amount of investment. SEEDS Capital will commit up to a maximum of S$10 million per Fund.
Facts about BAS
Funding Principle
The Scheme encourages proactive business angels’ investments in innovative seed or early stage start-up companies.
Pre-approved Business Angels Funds will have their investments into start-ups matched dollar-for-dollar by SEEDS Capital up to a maximum of S$1.0 million per start-up.
Amount of Funding
EDB will match a dollar for every dollar raised from Business Angel Funds under BAS, up to a maximum sum of S$1 million per start up.
The minimum investment per start up by the Business Angel Fund shall be S$75,000.
Qualifying companies
- The start up shall be no more than 5 years old at the point of application.
- The start up shall be engaged in the development of new or innovative products, processes and applications in the manufacturing and services sectors. Innovation can be in the form of technology and/or business models.
- The start up must be incorporated in Singapore and carry out its core high value-add activities in Singapore. For example, if the company globalises, its HQ functions and highest value-added activities, such as intellectual property management and commercialisation and its top management, should reside in Singapore.
- The start up can be local or foreign owned, subject to the provisions of the Companies Act (Cap.50).
- The start up must not have received funding under SEEDS/Growth Financing Programme previously or receive funding from other approved Business Angel Funds under the BAS.
Qualifying business activities
The startup's business activities should have the following characteristics:
- Substantial innovative or intellectual content;
- High growth potential; and
- Scalability for the international market
Excluded business activities
The Scheme does not apply to companies in the following activities:
- Real estate development;
- Gambling;
- Tobacco-related products;
- Other activities which are in violation of law, or against public interest
Disbursements
Upon approval by SEEDS Capital, the funds from SEEDS Capital will be disbursed directly to the investee companies in the form of paid-up capital in 2 (or more) tranches, which will be tied to agreed-upon business milestones.
Divestment
SEEDS Capital shall exit from the investment at the earliest of the following:
- Initial Public Offering of the start up; or
- Sales, merger or acquisition of the start up; or
- Such time when a third party cash offer is received by SEEDS Capital for the purchase of its shares prior to the 5th anniversary of SEEDS Capital’s investment in the start up; or
- If the above exit points have not occurred at the end of the 5 years, SEEDS Capital will look for possible divestments, giving the Business Angel Fund or its business angels, followed by the start up founder(s) and its existing shareholders, the right of first refusal to purchase SEEDS Capital’s shares based on the proportion of their respective shareholding in the start up.
However SEEDS Capital reserves the right to choose its exit strategy.
Transfer of shares
No founder shall sell, transfer, assign or otherwise dispose of his/her shares for a period of three (3) years from the date of the last capital injection by SEEDS Capital.
Should any of the shareholders (founder shareholders and Business Angel Fund) wish to divest their investment, they must first make an offer to the remaining shareholders, subject to the terms of the shareholders agreement described herein. They may only approach other investor(s) if the existing shareholders have declined to participate.
Shareholders and Subscription Agreements
The founder(s) of the start up, the Business Angel Fund and SEEDS Capital will sign Shareholders and Subscription Agreements, which include, but are not limited to, the terms and conditions stated in this document.
Apply for BAS
Download the 2 application forms below to apply for BAS:
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The startup shall submit the required documents as mentioned below to the Business Angel Fund of interest:
- Application form to be completed and signed by applicant(s)
- CV of the applicant(s) and the management team
- Startup company ACRA Business profile reflecting shareholdings and directorship
- Companies with more than 1.5 years of operation will need to provide audited account statement
- Companies with less than 1.5 years of operation will need to provide either a management account statement or a pro-form
List of approved Business Angel Funds
The Mustard Seed BAF LLP
491B River Valley Road
#08-02/03 Valley Point
Singapore 248373.
Email: cbipl@starhub.net.sg
BAF Spectrum Pte Ltd
http://www.bafspectrum.com/
Sirius Angel Fund
Attn: Christella Chua
Tel: 62322742
Fax: 62322888
Email : angels@sirius.com.sg
Qualifying Business Angel Funds
Each Fund will comprise at least 3 established business angels, with diverse backgrounds but complementary expertise.
Eligibility criteria for Accredited Business Angels:
- Minimum individual net worth of $2.0m;
- Good investment track record;
- Possess management experience, business networks, technical or financial expertise that can add value to the startup;
- Can be Singaporean, Singapore Permanent Resident or foreigner, but must reside in Singapore;
- Maintain arms length transactions with the founder(s) and the start up;
- Not be undischarged bankrupts; and
- Declare whether he/she (they) has (have) been convicted in a court of law, or if there are any pending criminal or civil proceedings against him (them);
With exception of item (i) and (ii), all criteria apply to non-accredited business angel(s).
Each accredited business angel in the Business Angel Fund will be required to sign relevant statutory declarations before a commissioner of oaths or a notary public affirming the above. The statutory declaration form will be provided by SEEDS Capital.
At least one accredited business angel from the Business Angel Fund or a nominee must take a Board seat in the investee company, mentor and guide the company, and chair its Compensation/Remuneration Committee.
Benefits to Business Angel Fund
SEEDS Capital will share with the Business Angel Fund, a pro-rated level of its net incremental realized gains in excess of a 10% IRR.
For business angels that are interested to learn more about the BAS, please contact:
Economic Development Board
Technopreneurship & Venture Capital Group
250 North Bridge Road
#28-00 Raffles City Tower
Singapore 179101
Tel: (65) 6832-6832
Fax: (65) 6832-6565
Email: bas@edb.gov.sg
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