SCS Digital Media Chapter Talk 23 March 2012

“Raising Funds For Great

Ideas”

Bill Liu

Chairman & Managing Partner

Stream Global Pte Ltd

Content

Introduction to Venture Funding

Eco System For Funding

– Private Investors/Government Schemes

Investor’s Criteria

Funding of Innovations/Start-Ups

– Stream Media

– Taggo

– SyQic Capital- (IPTV)

– Others

Lessons Learnt

Financing Mechanisms at different stages of

the Start-Up process

High

Low

Level of Investment Risk Assumed By Investor

Seed Start-up

Early growth Established

Stage of Development of Entrepreneurial Firm

Commercial Banks

Equity Markets

Non-financial Corporations

Venture Capitalists

Business Angels

Founder, Friends, and Family

Source: Onasbrugge et. al. (2000)

Venture Capital Investing During Dot com Boom

Singapore’s Funding Eco System

Business Plan Competitions

Angel Investors (also Friends & Family)

Incubators

First Stage Funding – Venture Captial, Bank Loans

Government Support

–Equity, Debt, Tax Incentives

Growth (Late) stage funding

Business Plan Competitions Startup @ Singapore

– Since 1999: 2200 teams and 7000 participants todate

– Grand winner $30,000, annual competition, Organiser: NUS Entrepreneurship Centre

Lee Kuan Yew global business plan competition

– US$60,000, (1st Prize US$36K)

– biennial competition

– Organiser: SMU Institute of Innovation & Entrepreneurship

ideas.inc. Business Challenge (NTU)

1st prize S$15,000, (+ $15K for prototype for

semi-finalists). Finalists get YES grants of $50K

Incubators– lowering initial costs

Provide workspace and shared administrative resources

Help with fund-raising and marketing

General mentoring and guidance

About 100 incubators in Singapore

Singapore’s Hotspots

– Fusionpolis – Biopolis/Science Park – NRF TIS Scheme of 7 Incubators – NTU’s Technopreneuship Centre – NUS’ Entrepreneurship Centre – SMU Business Innovation Generator – The Enterprise @ Jurong East – iAxil @ Singapore Science Park – iHub @ Jurong East – Phase Z.Ro @ one-north – Soho @ Central – Technopreneur Center @ Ayer Rajah – Technopreneur Center @ Bukit

Merah – Technopark @ Chai Chee – Suntec City

"HOT" stands for

"Hub of Technopreneurs”

Private Investors

Angel Investors

Venture Capital

Where to find them?

BANSEA – Business Angels Network of South East Asia –Annual membership Fee $200 –Membership Benefits

Information on deal flows & overseas contacts Seminars & Networking Events

ACE - Action Community for Entrepreneurship

–Annual Events like BlueSky Innovation

SVCA – Singapore Venture Capital and Private Equity Association

DEALFLOW CONNECTION

–An online Interactive platform to match fund seekers (eg Start-Ups, SMEs, etc) with sources of finance –finance ranging from debts, equities, OTC, venture funds, private placements as well as financial institutions. –http://www.dealflow.org.sg

Government Schemes for

Start Ups In Singapore

NRF Technopreneur Incubation Scheme

(TIS)

Administered & Sponsored By National Research Foundation (NRF)

Start-Ups less than 5 years old and less than $5M revenue

Incubator, (eg Stream Global) co-invest with NRF in a start-up, where NRF funds 85% (up to S$500K) and Incubators funds the remaining 15% (S$88K)

Funding is in the form of convertible Bond Bond is redeemable by Incubator Within 3 Years @ 5%

interests p.a. Else NRF shall convert it into equity stakes in the Co. Founder must have substantial (> 50%) stake in the Co. 7 Incubators are into ICT, Digital Media, Clean Tech,

Biotech, etc (Another 8 Incubators just added!)

SPRING Standards, Productivity and Innovation

Board, Singapore

Focus is to champion enterprise formation

and growth

–Funding resources

–Network of valued relationships

Works with partners to

–Help enhance the productivity and innovation and capabilities of enterprises

–Increase access to markets and business opportunities

Startup Enterprise Development Scheme (SEEDS)

Administered By Spring $ match for funds raised with a third party investor Minimum of S$75,000 from third party/parties with initial funding of

$300K Maximum funding of $1 million SPRING SEEDS Capital will match $2 for $1 raised by the company SPRING SEEDS Capital and the third-party investor(s) will take equity

stakes in the company in proportion to their investments Start-Ups less than 5 years old Have paid-up capital of at least S$50,000, but not more than S$1

million Todate

– 185 Companies Received SEED Funding Since 2001 Totaling S$63M

–More than 50% of SEED Enterprises Have Launched Products/Services

Young Entrepreneurs Scheme for Startups (YES)

A S$25 million Entrepreneurial Talent Development Fund (ETDF) To encourage entrepreneurship among Singapore youths by providing seed money to co-fund their startups

Grant of up to S$50,000 to turn Innovation/Idea into a business Singapore Citizens or PR below 26 years 1st-time entrepreneurs & Co less than 6 months Holds at least 50% equity at the time of application & will

continue to do so for 18 months from time of funding

SPRING Spore will match S$4 for every S$1 raised through self-funding, schools or third-party sources, the grant is capped at S$50,000.

At least 50% raised comes from School/IHL

Media Development Authority (MDA) iJam (& soon iJam Reload)

Scheme supports startups in their exploration of feasibility of technologies and ideas that have the potential to create business disruption and bold new Industry‘ in Interactive Digital Media (IDM)

Up to S$50K for qualifying costs for IDM innovation/

Prototype for Singapore based start-ups

Funds facilitated by Mentor Companies (10 appointed)

Must exhibit R&D in either technology, creative, social or business model

Can further tap grants from other schemes , viz Development Assistance, Production, Marketing & Talent Assistance Schemes

IDA Infocomm Start-up Programme (iSTART)

iStart is a multi-pronged approach aimed to assist, facilitate and nurture Singapore's ICT start-ups by increasing the

depth and potential of our start-ups through various programmes and initiatives:

- Creating Business-Savvy Entrepreneurs

- Market Access for Start-Ups

- Leveraging International Technologies to Accelerate Go-To-Market

- Grooming the Local Developer Community

Creating Vibrancy and Providing International Platforms for Start-Ups

Business Loan Scheme For Low Income - MicoCredit Business Scheme (MCBS)

Person earning less than $30K p.a. & age > 18 years

Loans from $5K to $50K (no collateral needed)

8%+ p.a. interests

$5 M funding from Tote Board, administered by POSB

MCBS teaming up with Chinese Development Assistance Council, Mendaki & Singapore Indian Development A to Asociation to reach out to more Singaporeans

Tax Exemption

All startup automatically qualify for this.

Start-ups in operation for less than 3 years can benefit from the tax exemption scheme.

100% tax exemption on the first S$100,000 of profits for

up to 3 years. a further 50% exemption is given on the next $200,000

on a qualifying company's normal chargeable income

The program's objective is to encourage entrepreneurial efforts by relieving the tax burden of young start-ups.

IE Singapore Double Deduction for Overseas Investment

– Deduction of taxable income (two times foreign investment)

Malaysia Singapore Third Country Business Development Fund (MSBF) Jointly With Malaysian Industrial Development Authority (MIDA).

Local Enterprise and Association Development Programme (LEAD) – Supports SMEs developing new industries

Trade Credit Insurance (TCI) – Protects against the non-payment risk of buyers

Pathfinder program – Help nascent Singapore-based exporters increase overseas sales

LIS II – Loan Insurance Scheme

Government Schemes for

Growth Stage Financing

LEFS

LETAS

LIS

GFP

RFS

What Does A VC Look For?

$$

Growth

People

Product

????

What does a VC look for?

The management team

– More important than the idea, product

Business plan – realistic? executable?

Intellectual Property Rights – Barrier to entry?

Scalability, Market Reach

Free of Constraints and roadblocks i.e. legal and regulatory issues

Exit Plan- Trade Sale, IPO, M&A?

Global Mobile In-App Payment Solution

www.movend.com

MoVend: Mobile Vending Machine

We build MoVend to be the vending machine on mobile To enable mobile transactions at every corner of the world

Handling multiple currencies, exchange rate and business rules

• Various forms of SDKs and API to reach out to customers

Global m-commerce is complicated

• Various types of payments

“Arggg! Google In-App Payments API is being a royal pain..…” - Kyle @stockholmux on Twitter, 19-Feb 2012

• Developers spend on average 2-4 weeks integrating ONE payment SDK per application

• For China, Taiwan, Korea, Japan, Amazon and variety of major geographical appstores, each come with their own SDK, and the payment flows are different

Facts

How are you going to solve this problem?

What if there is a single, integrated platform?

Features of MoVend

Aggregate payment solutions around the world into one SDK

• Manage local currencies and flexible pricing

• Digital rights management in-built

• User management tools including parental control

Multi-platform Support

Today, MoVend supports

MoVend will also support

LEFS Local Enterprise Finance Scheme

Fixed rate financing (6.25%-6.75%) to

–Upgrade, strengthen and expand operations

SPRING administered loans upto $15M for

–Buying new machinery

–Upgrading existing equipment

–General working capital

What Does A VC Look For?

$$

Growth

People

Product

????

31

Our Key Differentiation

Providing mentorship to entrepreneurs to help develop and refine their strategies and business models

Assess and critique their technology, product and solution Determining the best practices & operational procedures Providing entrepreneurs with extensive network of contacts Fund raising & Value Creation What Are We Looking For? Committed and passionate Individuals with solid technical or

business background Innovative, differentiated or big ideas that has high growth

potentials Ability to build proprietary and strong IP

Our Role With Our Incubatees/Investees :

Get your fan discount when you pay. Simply give your mobile number to the cashier. Patents Pending

Free for merchants!

Sponsored by banks and financial institutions.

Credit Card Networks

Banks

Fans get bigger discounts Charlie Brown Café, Singapore

Because merchants get word of mouth advertising on Facebook

Fan clubs powered by PayPal

Merchants offer bigger discounts to fans, and get free Facebook advertising, sponsored by PayPal.

Merchants will soon be able to partner with a number of banks and financial institutions using Taggo.

Taggo word of mouth campaigns are far more effective than other methods

Jessica got an exclusive fan benefit at Jolt Fashion with ABC Bank. Sometimes the best things in life are discovered through friends.

10X higher click-through rates than

traditional banner ads.

20X higher click-through rates than

average Facebook ads.

VS

Value added advertising that promotes the bank and its retail partners

Jessica got an exclusive fan benefit at Jolt Fashion with ABC Bank.

Jessica Tan

- ABC Bank

Jessica escaped to Italy at Giovanni’s Pizzeria with ABC Bank.

Jessica Tan

- ABC Bank

Jessica is getting fit at Paradise Gym with ABC Bank.

Jessica Tan

- ABC Bank

Without Taggo, Facebook ads

only promote the bank.

Jessica Tan likes ABC Bank

ABC Bank

SyQic Capital Discovering Audiences, Uncovering Content

Building Subscriber Mass

SyQic operates and manages all aspects of video delivery over the internet to multiple devices, across multiple networks via its proprietary platforms:-

• Yoonic OTT IPTV – currently deployed for PLDT (Philippines) and Telekom Malaysia

• YooMob – currently deployed for Maxis (Malaysia)

All these deployments will build up subscriber mass quickly and efficiently, utilising telcos’ customer base and marketing resources

What It Does…

YooMob

YooMob offers viewing of live and VOD channels optimized for mobile streaming

High Quality streaming even at low bitrates to access the masses

Yoonic Storefront – The Content Hub SyQic is now working on engaging end-users directly by deploying its own Storefront

The Yoonic Storefront aims to be the centre of video distribution and consumption, linking the content providers with consumers

Leverage on the subscriber mass built up from SyQic’s current deployments with telcos for a headstart

Telcos will still be part of the ecosystem, benefiting from increased bandwidth consumption and consumers from other markets

SyQic’s Value Proposition…

The Ecosystem

YOONIC STORE-

FRONT

Broadcasters

Content Providers

Consumers

Supplies

content to

Yoonic

Storefront

Supplies

content to

Yoonic

Storefront

Yoonic Storefront will

provide CMS and

supporting services to

manage the content and

make it available to

consumers

Consumers will have the

opportunity to access a

variety of content

Telcos / ISPs

Provide

access and

QoS

Some Major Clients

PLDT

Smart Communications

Telekom Malaysia

Maxis

Indosat

Globe Telecom

The People

a Team that can execute

Management Team 40 years combined operations experience in Broadcast the TV & Radio industry

Operations Team Highly experienced operations & project management background

R&D Team Pioneer in P2P-CDN software & middleware development

Advisory Team Strategic stakeholders with relevant industry experience and well networked to

make things happen

Why did we invest?

The management team

– More important than the idea, product

Business plan – realistic & executable

Intellectual Property Rights – Barrier to entry

Scalability & Market Reach Potentials

Exit Plan- Potential Trade Sale & M&A (IPO?)

Why Some Ventures Fail To Get Funding?

Lack Clear Business Model

“Mee Too” Business, Little Differentiation

Unrealistic Valuation

Weak Team, Lack Leadership, Not Receptive To New Ideas/Advice

Business Not Scalable

Reasons for Start-Up Faling

Execution, execution, execution

– Commercialization of new technology is also an art!

Teamwork/Management Team

– Non: cohesive, co-operative and focused

Costs outstrip revenue

Unwilling to change course or take remedial action

Regulatory barriers/approvals

Stream Global’s Mission & Vision

Premier S’pore based

Venture Catalyst In

IDM & emerging ICT

2007

Vision

Mission Grow a STREAM of highly promising start-up companies based in ASEAN but with GLOBAL reach; focusing on Interactive Digital Media/Emerging ICT sector; partnering with passionate & capable entrepreneurs & delivering exceptional medium-term ROI to shareholders.

2008 2009 2010 2011 2012

Thank You For Your Attention!