Throughout all the e27 and networking events which Singaporeans and foreigners have attended, we noticed that anyone local, looking for funds for starting up, will initially tend to look towards the government assistance schemes aka G-RanTS! Singaporeans love engaging the government to get their hands on any kind of monetary assistance possible. Based on my interactions with some foreigners, they on the other hand look at things differently. They hear about all the wonderful tax breaks, starting up grants, rental subsidies, grants to buy computer equipments, grants to make your employees happy etc. and try to set up base here. Makes me wonder, do we (as a startup community) need such grants?
Do Startups Need Grants?
Startup grants were heavily discussed during unConference 2009 during the morning panel session where Dr Lai Kok Fung (Founder, CEO BuzzCity) mentioned that the startup team should focus on the product, get some private money, then hire a full time person to apply for such grants. Reasoning also, that if your proposal does not have a 100% fit into the obvious & not-obvious criteria, it will require guts, effort, time and resources waiting to get that seed money you think you desperately need at the start.
Start of discussion on government grants
More discussion on general incubator/investment topics
Startups Are Overly “Grant Focused”
I have seen business proposal submissions, that are willing to change just about everything (except the team itself) just to fit the criteria for such grants. Instead, we should be more focused on getting the startup some traction, getting the right team, doing rapid prototyping & iteration (technical co-founder is a MUST [read article on “How to pick co-founder” by VentureHacks, Naval Ravikant, Twitter Series A]), getting users, getting bugs squashed, getting attention & only when the time is right, getting the funding as well. Be self sufficient before looking for investors. As Paul Graham puts it, “Investors like it when they can help a startup, but they dont like startups that would die without that help”. There is more value creation since these entrepreneurs self learn everything at the start and retain such knowledge and skills for their second startup or share the knowledge back with the community.
When Grants Are Good
On the other hand, grants such as WoW! grant (Work-Life-Works!) is a good example where the government grant schemes works the best. The grant basically helps the company employees manage and balance their work-life responsibilities by subsidizing work-from-home infrastructure & equipment support. It does not delude the startup team into perceiving that the grant has to be obtained before anything can be done/started.
Government initiatives work best by providing side/fringe support & services and kudos to the various agencies helping to push for such schemes. However, there needs to be a change among general Singaporean mindset that most of these grants are good-to-have but definitely NOT a must-have! Who knows, perhaps without all these grants, there might be more investment vibrancy from the angel and VC community here.
Update: I feel the need to clarify here that, my statement above “Who knows, perhaps without all these grants, there might be more investment vibrancy from the angel and VC community here.” was meant to be an open-ended question rather than implication.