FAQs
Assessment Stage
What are the key business attributes that SEEDS Capital looks for in assessing the startup before it can be considered for potential funding?
The startup would be considered for investment if it possesses the following key business attributes:
- Has substantial innovative and/or intellectual property content developed or owned in-house
- Able to demonstrate a commercially viable business model from its products and/or services – this includes being able to secure some pilot/paying customers
- Able to articulate clearly its value proposition and potential for scalability in the target customer segment(s) and across international markets
- Has a committed and capable management team, with the relevant experience and business acumen skills (e.g. business, industry, technical capability) and receptive to guidance from co-investors
Does SEEDS Capital co-invest in startups in certain sectors only?
While there are some nascent sectors that SEEDS Capital focuses on, such as Health and Biomedical Sciences, Urban Solutions and Sustainability, and Advanced Manufacturing and Engineering, SEEDS Capital can also invest in other sectors. What is important is the startup should be able to demonstrate and evidence in the key business attributes.
However, firms with the following business activities (but not limited to activities in the listing) will not be considered for investment:
- Real estate development
- Consultancy
- Gambling
- HR Recruitment
- Tobacco related products
- Finance companies specialising in provision of loans and leases
- Other activities which are in violation of law, or against public interest
Does SEEDS Capital take shares in the startup? How much shares will it take?
As SEEDS Capital operates on a co-investment equity financing model, it will take shares in the startup. The amount of shareholding taken by SEEDS Capital is dependent on the valuation of the company.
On what terms would the co-investment be made with the Co-investment Partner into the startup?
SEEDS and the Co-investment Partner must invest on pari passu terms – on the principle of equal risk and reward.
Is there a limit to the investment quantum by SEEDS Capital at first or subsequent rounds?
The maximum investment amount that could be raised from SEEDS is S$2 million (for General tech) or S$12 million (for Deep tech) per company, typically over several investment rounds. Follow-on investments, up to SEEDS’ investment caps would be subject to company’s continued progress and business performance, as well as deal terms in subsequent rounds.
Who is involved in the final decision to support or reject an investment case?
For investments with appointed partners of SEEDS Capital, SEEDS Capital’s Investment Team will seek approval for the investment internally within SEEDS Capital.
For co-investors who are not appointed partners of SEEDS Capital, the Investment Panel in consultation with the investment team are involved. If your investment proposal passes through due diligence, our team will advise the startup on the schedule of the next Investment Panel meeting. This is where the startup and potential co-investor will surface and pitch their case to the Investment Panel.
Who are involved as the investment panel members?
The members of the investment panel are largely made up of private-sector individuals from diverse professional background and experience (i.e. venture capital/finance/investment, entrepreneurial, corporate expertise, legal, & senior management skills), including several executive personnel from SEEDS Capital/ Singapore.
What other information regarding the investment procedure should the startup be aware of?
The startup does not need to submit official/confidential documents and application form unless otherwise advised by the team.
Third-Party Co-Investor (excludes SEEDS Capital’s appointed partners)
How do I become one of SEEDS’ co-investment partners?
SEEDS is currently seeking strategic partners, who have the ability to lead funding rounds, and possess strong record, expertise and capabilities in the following areas:
a. Track record of investing in Deep Tech: Experienced in identifying and backing founders commercialising Emerging / Disruptive Technologies with transformative potential.
b. Technical and Domain Expertise: Specialised knowledge and capabilities related to Advanced Manufacturing, Pharmbio/Medtech, Agrifood Tech, Sustainability (such as Energy, Circular Economy, Urban Mobility, Water), Spacetech and, Quantumtech, to help startups navigate technical challenges and drive innovation.
c. International Networks: Global networks to facilitate market entry and expansion.
d. Early Growth Investment Capabilities: Ability to lead Series B/ C rounds to support scaling of Deep Tech startups’ commercialisation efforts.
SEEDS will be accepting applications till 11 September 2024. For more details, please refer to information pack and press release.
Is it necessary for my startup to bring forth a third-party co-investor when considering raising investment from SEEDS Capital?
Yes. SEEDS Capital operates on a co-investment equity financing model. The investment principle is based on a matching commitment from an independent co-investor. The depth of assessment by the potential co-investor and his/her professional background and ability to value-add will be taken into consideration.
Can third-party co-investors be foreign?
Yes, SEEDS Capital can consider foreign third-party co-investors. The same eligibility criteria will apply. Please see the webpage on Startup SG Equity for details on the eligibility criteria.
How does application process differ if the intended co-investor is an appointed partner of SEEDS Capital?
Where the intended co-investor is an appointed partner of SEEDS Capital, startups are encouraged to approach the appointed partners directly.
As with independent third-party co-investors, the appointed partners will also have their own criteria, carry out due diligence with regards to the startup in order to decide if they will proceed with the investment and surface to SEEDS Capital for SEEDS Capital’s decision on co-investment.
The final stage of assessment varies and will be conducted by:
- Our Investment Committee (for co-investments with our appointed partners) or
- Our Investment Panel (for co-investments with non-appointed partners)
Post-Investment Stage
What role will SEEDS Capital assume after its investment?
SEEDS typically retains a Board observer seat post-investment, which beyond governance also allows for a deeper understanding of portfolio company’s challenges and growth plans following which relevant support could be provided in tandem with other teams from within Enterprise Singapore. This may include leveraging Enterprise Singapore’s Industry Cluster and Global Markets teams for business facilitation, market expansion, manpower facilitation and capability development projects.
How does SEEDS think about exiting a company, in terms of the modes of exit, and timeframe?
SEEDS is looking at a holding period of about seven years for deep tech startups invested, although as a government fund we retain flexibility on when we need to exit companies. Exit options include (but are not limited to) trade sales, mergers & acquisitions, secondary sales of shares, and initial public offerings at fair market value.