Last updated January 2024
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 raise funds successfully 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 entrepreneurial journey. You may need more 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 many 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. Singapore-based startups secured S$11.2 billion in funding in 2021, doubling the amount raised in 2020.
According to the Global Startup Ecosystem Report 2023, Singapore has secured the 8th position worldwide. Notably, it stands out by ranking first in terms of VC funding per capita. Singapore’s startups continue to attract significant investment, particularly in booming sectors like AI, fintech, sustainability, and healthcare.
Benefits of Having the Right Corporate Services Provider
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.
For more details on startup fundraising consultants, read here.
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. 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 knows what kind of information or paperwork is needed to finalise the rounds of fundraising. They can be your secret weapon in expediting the lengthy process with ease.
An experienced corporate secretary can significantly reduce the time it takes to raise funds, giving you a competitive edge and securing investments before momentum slows down. Avoid wasting precious resources on administrative delays. Instead, invest in a dedicated partner who comprehends the intricacies of fundraising and can propel you towards success.
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 rounds of fundraising. 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 secretary guarantees that the process is as seamless as possible.
Preparing Resolutions
Issuing new shares for new investors is necessary during your rounds of fundraising. 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. In addition to legal fees, navigating resolutions with an inexperienced corporate secretary can be a complex and time-consuming process, requiring multiple revisions and negotiations. As a result, valuable hours can be wasted and potential deals may be missed.
By availing of a comprehensive corporate secretary service, you gain access to skilled professionals proficient in seamlessly managing resolutions. This service not only ensures efficient handling but also aids in minimising expenses.
Issuance of Share Certificates
Once all agreements are signed, including the KYC and resolution process, the startup is responsible for issuing a shares certificate as proof of ownership in exchange for investment funds. Timeliness is crucial in this process, and having a responsive corporate secretary is essential to address any questions investors may have regarding the certificate’s status. Delayed or inaccurate share certificates can undermine investor confidence and put future funding rounds at risk. Time is of the essence, particularly in fundraising.
A qualified corporate secretary can streamline the certificate issuance process, providing investor proof of ownership within a faster timeline compared to internal or inexperienced alternatives. This expedites cash flow and minimises investor frustration, driving faster funding rounds and smoother transactions in the future.
Elevate Your Fundraising with Lanturn
At Lanturn, our team of dedicated corporate secretaries is fully committed to ensuring that your startup fundraising round is not just smooth, but seamless. We expertly blend top-notch services with cutting-edge technology to offer comprehensive corporate solutions for businesses at every stage, from initial startup to global expansion.
With a proven track record, Lanturn has facilitated over S$250M in fundraising rounds for our clients, covering everything from initial seed rounds to Series C funding. Trust us to be your strategic partner in achieving your fundraising goals.
Contact us today and let us elevate your fundraising experience together.
