Singapore: Equity and debt crowdfunding platform FundedHere receives approval to go live

Singapore-based equity and debt crowdfunding platform FundedHere has received a Capital Markets Services license from the Monetary Authority of Singapore (MAS).

FundedHere said it was the first equity and debt crowdfunding platform to be fully-licensed by the Singapore government and ready for fundraising. While it is  registering accredited investors, the website’s fundraising features will be operational from April 1, 2016.

At a press conference, the company’s CEO Michael Tee and Executive Director Agnes Siaw, said that FundedHere has registered approximately 500 accredited investors right now. Its goal is to register 1,000 accredited investors by the end of the year.

L-R: MIchael Tee and Agnes Siaw (CEO and Executive Director respectively)

L-R: Michael Tee and Agnes Siaw (CEO and Executive Director respectively)

Individual accredited investors are required to have a minimum of S$2 million in net personal assets, excluding the value of their personal primary residence, or earn a minimum of S$300,000 a year. Additionally, corporate accredited investors are required to have at least S$10 million in net assets, the company said, in a statement.

FundedHere has reviewed more than 100 startups, most of which are from Singapore. It has shortlisted about 10 startups, which it considers to have “potential to be crowdfunded”.

Explaining the criteria for startups looking to campaign on FundedHere, they said, first, no matter where it’s (startup) from, it will have to register itself as a company in Singapore. The team will then do due diligence on the startups, look into the background of the founders, and validate the companies by checking with its partners.

When asked about MAS’ criteria for awarding the Capital Markets Services license to FundedHere, Tee and Siaw noted that the company had to pay a minimum of S$500,000. “After that, every company is a bit different,” added Tee, explaining that regulators often look into the company’s financials, as well as its advisory team and its plans in the future.

“We need to do the business in the proper way,” said Tee, who also shared that FundedHere first began talks with MAS about 12 months ago. “We cannot take it lightly.”

Money matters

When approved by FundedHere, startups will be able to upload their project campaigns onto the website, and raise money through the online campaign itself.

All funds raised will be stored in an escrow account. If the project campaign proves successful, necessary checks will be conducted. When the checks are completed, the funds will be transferred into the project’s account.

For every successful campaign, FundedHere will take a three to eight per cent commission on the deal, in cash. However, it will also allow entrepreneurs to negotiate other forms of payment. For example, for various entrepreneurs who may not be able to pay in cash, the startup may allow entrepreneurs to pay in shares instead.

At the end of each successful campaign, there is also a five-day cooling off period, where investors can choose to recall their investments.

Siaw and Tee both stressed that the company will not involve itself in the day to day operations of the startups listed on its campaign platform. Instead, it will be up to each individual project owner to decide on details like how much to raise, how much equity to give out, and the sort of pitch deck to upload onto the platform.

The company also hosts regular networking events between the investors and startups registered with it. These startups include Couper, a mobile game monetisation startup that has previously received S$255,000 through various government grants.

Couper co-founder Jimmy Lui tells DEALSTREETASIA that the startup got to know about FundedHere through a Demo Day event at Singapore Management University, where the former was incubated at. At the moment, it is raising $400,000, and is talking to one investor who seems committed. The funds would be used to increase its number of staff members.

This regulatory milestone comes at a time when US-based crowdfunding platform AngelList is set to launch in Singapore in the next couple of months. AngelList is looking at hiring a team in the city-state, and are in discussions with MAS. Other competitors here include Fundnel, an online investment platform that targets small and medium enterprises (SMEs).

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