Small and medium enterprises (SME’s in Singapore), typically defined as organizations that…
Fundraising is a critical step for every startup or new business but it’s often the most nerve wracking.
The time and energy required to successfully raise funds is enormous. You need to meet the right investors interested in your product or service, which might be difficult for founders who have just begun their entrepreneurship journey. You may not have adequate connections to get your foot in the door. After all of the effort of securing your investment, issues with collecting KYC and problems with the administrative legalities can be incredibly frustrating. Unfortunately, this is something a lot of start-ups experience during their first fundraising round.
As an innovation hub in Southeast Asia, investors are willing to take a chance on new businesses in Singapore that have the potential to scale quickly. In fact, Singapore-based startups secured S$11.2 billion in funding in 2021, doubling the amount raised in 2020.
The benefits of having the right corporate services provider by your side
At the beginning of their journey, many founders choose the cheapest option for set-up as they are concerned about their costs. However, choosing the right corporate services provider for the long run will help your business scale quickly and give your investors confidence in your business. Another factor that can give you an advantage is using a fundraising platform or service.
1. Expediting a lengthy process
Fundraising often takes a lot longer than expected. Potential investors often ask their legal counsel to conduct due diligence before investing in a startup when it comes to fundraising. By the time the investor is ready to transfer their money, delays caused by a poorly prepared service provider can be frustrating. It is important to ensure your corporate secretary has sufficient capacity to be highly responsive during a critical time. An experienced corporate secretary has the knowledge of what kind of information or paperwork is needed to finalise the fundraising round.. They can be your secret weapon in expediting the lengthy process with ease.
2. Preventing unhappy investors
Singapore is a highly-regulated region to ensure that financial activities conducted in the area are done properly. Doing so will fix Singapore’s place as the premier financial and investment hub worldwide. One of those regulations is the necessity of the know-your-customer (KYC) procedure, including during your fundraising rounds. This protects all stakeholders involved and the business interests of companies, investment firms, and investors.
While the KYC process can be burdensome, it builds trust and mitigates risks for all parties involved. For founders, it ensures that the potential investors are legitimate and have the capacity to invest in one’s company. For the investors, they can ensure that the business is legal and registered, minimising the risk of fraud.
Conducting a KYC is a delicate process that is often irritating to founders and investors alike. A responsive and experienced corporate c secretary guarantees that the process is as seamless as possible.
3. Preparing resolutions
Issuing new shares for new investors is necessary administration during fundraising round. This process will be conducted once the Board of Directors and shareholders pass a resolution authorising the increase in share capital through issuing new shares to shareholders. Often, inexperienced corporate secretaries will require you to seek the help of legal counsel that comes with higher fees. A comprehensive corporate secretary service can help you minimise the expenses required.
Once everything is signed and agreed upon, including the KYC and resolution process, the startup is responsible for issuing a shares certificate as proof of ownership in exchange for their investment funds. As this could be time-sensitive, having a responsive corporate secretary is essential to answer all the questions investors may have regarding the certificate’s status. A corporate secretary’s job includes making sure that these certificates are issued promptly.
Fundraising is a significant step that many start-ups go through. A good corporate secretary’s goal is To offer a seamless fundraising experience. At Lanturn, we combine great service with great technology to offer end-to-end financial services and solutions for businesses. Lanturn has a proven track record in administering over S$200M in fundraising rounds for our clients, from initial seed rounds to Series C.
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