Equity crowdfunding to go live next month

Accredited investors can choose from 10 start-ups on first fully licensed platform here

Singapore's first fully licensed equity and debt crowdfunding platform will go live next month, allowing accredited investors to choose from 10 start-ups.

While a number of platforms have matched investors to entrepreneurs seeking short-term loans here over the last few years, equity crowdfunding - in which entrepreneurs exchange equity or shares in their company for funding - is relatively new.

Crowdfunding platforms here need to obtain a Capital Market Services (CMS) licence before they can issue shares to investors.

FundedHere waited a year before its application was approved by the Monetary Authority of Singapore last week, said chief executive Michael Tee yesterday.

Accredited investors can fund a start-up with as little as $5,000, while FundedHere earns a fee of 3 per cent to 8 per cent on successful funding campaigns.

FundedHere screens start-ups on basic criteria such as the size of their paid-up capital and the founders' backgrounds before marketing them to investors, said executive director Agnes Siaw, but investor returns for equity crowdfunding deals are not guaranteed.

For this reason, the CMS licence allows only accredited investors to participate in equity crowdfunding.

Mr Tee said: "With every new venture is an element of risk, and we believe it has to be limited to sophisticated investors right now.

"I cannot say whether or not it will (eventually) open to the public. I think it depends on how we progress from here... and what happens in the market."

FundedHere hopes to register 1,000 accredited investors to its platform by the year's end.

It has reviewed more than 100 start-ups and short-listed 10 to qualify for fund raising when the site goes live on April 1.

These include Chloros, a green solutions consultant; Boing, a playhouse for children; Denova Sciences, which manufactures artificial skins; Snupped, which makes laptop sleeves; and Couper, a platform that helps mobile games sell more in-app purchases.

Mr Jimmy Lui, co-founder of Couper, said he has raised $255,000 to date and plans to raise $400,000 more next month to expand his team.

FundedHere is also working with partners in China and the rest of Asean to add more start-ups to its platform, Mr Tee said.

"The last time I visited Shenzhen, they told me there are up to 10,000 companies waiting to be listed in the China stock market, which are high-tech or somehow oriented to high-tech...If we can get a percentage of the action, it will be very very good for us."

FundedHere counts among its advisers Mr Andy Lim, chairman of private equity firm Tembusu Partners and a self-titled "crowdfunding advocate", who attended the launch event yesterday with his wife Lim Hwee Hua, former minister in the Prime Minister's Office.

A version of this article appeared in the print edition of The Straits Times on March 22, 2016, with the headline 'Equity crowdfunding to go live next month'. Print Edition | Subscribe