Business & Economy Startups Know the purpose of Singapore startup grants before applying for them ...

Know the purpose of Singapore startup grants before applying for them  




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Grants are a priviledge, not an entitlement, which is an important mindset

The Singapore tech ecosystem is one of the few ecosystems that promote entrepreneurship and offers startup grants to its citizens, especially at an ideation stage.

Being part of the ecosystem for the last eight years, TRIVE has supported over 75 Singapore startups via the Startup SGFounder Grant and defunct iJAM.Reload grant programs, which we have seen a number have raised follow-on funding and seen some exits as well.

In our experience working and coaching many startup founders, we realised that there has been a number of misconceptions about obtaining a startup grant.

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Below are some anecdotes I hope to share with you on the purposes of startup grants before you consider applying for them.

1. A privilege, not an entitlement

A few years ago, I recalled once having a startup founder telling me off. Reason being was that I could not allow for her application of the iJAM.Reload startup grant to proceed. Her business idea did not make sense as it was very short-term focused and didn’t seem able to scale.

She huffed at me, saying that “this grant is meant for Singaporeans and I should have it regardless.” I had to correct her that the startup grants are a privilege, not an entitlement. I prompted informed her that and had to discontinue the discussion.

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One must be clear that startup grants are a privilege issued by the government to support the startups. It is then decided by the respective incubators and government agencies to decide whether the startup qualifies for the grant. Incubators share a duty of care and proper diligence in ensuring that the grant is issued to deserving entrepreneurs.

2. Not to offset operational costs

A case was mentioned to me where a startup founder requested for a speedy approval for the SGFounder grant. The reason: he needed to pay for operational costs for rent and his team that was coming up at the end of the month.

The grant is clear about building new capabilities to grow the company, not to pay for existing operational expenses. After going deeper, he was unable to articulate how he could build new products or core assets development. We had to discontinue the grant application.

3. Not to pay a cushy salary

There was a grant application a few years back who was a mid-career executive. He was applying for the iJAM.Reload $50k grant and asked the weirdest question, “What is the maximum that I can pay myself using the grant?”

I was taken aback and asked why the question. He mentioned that he already had a certain standard of living. He also justified that he is valued at the last drawn amount and ‘could not accept any lower salary’ which might affect his future chances of employment.

I am sure you can already start hitting out at the many potential points of this statement! Suffice to say, this person did not receive a grant.

Entrepreneurship is about risk-taking and not a step up in one’s career. If one is not able to financially afford being an entrepreneur, it is best to reconsider this path.

4. Grants are not immediately disbursed

I am sure everyone who has worked with the government agencies on grants, one can attest that the funds take some time to be disbursed.

Some entrepreneurs time their cashflow based on immediate disbursements. And soon after suffer from severe cashflow issues.

Allow me to explain. Grants are essentially Singapore taxpayers money and they have to be accounted for before disbursing. Hence it clears through a number of layers to be approved to ensure that the grant application is done properly.

So with all these considerations in mind that I have mentioned, so what should grants be used for?

1. Building up long-term capabilities.

One must clear that the grant should focus on investing activities, rather than operating activities in your cashflow statement. During the iJAM.Reload application, the grant were very specific to only allow the development of new technologies and product. Items like rent and electricity were not allowed as part of the budget.

In the Startup SGFounder Grant, it is also clear that you need to be focused on building a product.

2. A stepping stone to show MVP to potential investors and clients.

I am quite proud to see a few of my Startup SGFounder startups managed to create a MVP and demonstrated them to investors and clients. One admitted that without the grant of developing the product, it would have been very hard to convince his client and close the deal.

Use this chance of obtaining a startup grant to gain more traction or development to convince clients and investors to hop on board.

3. A good testing process to have clarity on the project scope.

Sometimes, being in a very young startup, it is difficult to formulate proper processes and structure. It is also hard to get going a clarity in direction.

Our Startup SGFounder entrepreneurs appreciated using TRIVE’s unique 14-point pitch deck to flesh out their idea. When applying for the grant, the guidelines gives a good direction and structure to aid newly minted entrepreneurs in their thought process.

4. Obtaining non-cash benefits.

Different Accredited Mentor Partners of Startup SGFounder Grants have their varied benefits when a startup founder applies. At TRIVE, those who apply get a variety of added S$80k in business benefits, free co-working space and access to over 100+ mentors.

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There is also a credibility benefit when one obtains their StartupSG Founder grant from a known incubator. So look and access carefully to all the different AMPs which have their strengths in certain industries or specialities.

The author is a pro-Singapore startup evangelist who has spent 8 years advising over 1000 1-to-1 advisories with startup founders. This is part of the Startup Advisory series. TRIVE is an AMP of the SGFounder Grant and runs a pay-it-forward incubator to support Singaporeans in their dream to build a startup.

Photo by Lily Banse on Unsplash

The post Know the purpose of Singapore startup grants before applying for them   appeared first on e27.

Source: E27

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