Correction: A previous version of this article included ‘Equity crowdfunding’ in the headline and once in the article, but do to legal restrictions from the Monetary Authority of Singapore it was changed to ‘investment crowdfunding’.
A major reason startups are attracted to accelerator programmes is the network of investors. Well-run organisations help the participating startups knock down a barrier to entry and facilitate conversation and meetings.
But not all startups in accelerators get (or want) traditional VC or angel investment funding. Now Marvelstone Group’s 10K accelerator programme and Fundnel have entered into unique partnership that will provide an alternative funding strategy for startups. In hindsight, it seems like a natural fit.
Fundnel is Asia’s first investment crowdfunding platform and 10K has entered into a cooperative agreement to foster the ability of 10K umbrella companies to leverage Fundnel’s services into their growth strategies.
“How we intend to partner up is by introducing interesting deal flows or opportunities that come to both of us, to each other. For instance, if a business comes along to Fundnel’s platform and Fundnel sees opportunities for 10K to help the business out, in more fundraising opportunities, networking, expertise and more, we are more than happy to offer our assistance, and vice versa,” 10K Asia CEO Joel Ko Hyun Sik told e27.
To get an idea of how Fundnel operates, let’s take a look at a current fundraising campaign on the website from a startup called Hawker — essentially a Deliveroo-like service for Singapore’s famous hawker centers.
The company is raising money under a revenue-sharing model in which investors will split six per cent of total revenue based on the amount donated. The minimum investment is rather small (S$250 or US$182) to get a stake in the company. Backers will get their share quarterly with a 1.15 times multiplier over a 12 month period.
Other companies that have received funding often offer convertible bonds or mandatory convertible bonds (forms of equity) as part of the investment deal.
The 10K accelerator platform operates as an arm of Marvelstone Group, a company that has been transparent about its strategy of acquiring companies that fall under its umbrella.
When asked by e27 if the Fundnel partnership would impact the overall strategy, Ko said,
“In terms of acquisitions, this partnership will not have direct impact in our strategy, but indirectly, we believe that this offers a more contained ecosystem for startups that are or will fall under both our platforms.”
Ko said 10K plans on further deepening the relationship with Fundnel moving forward.
The name 10K is a reference to the platform’s ambitious goal to accelerate 100 companies in 100 locations across Asia — totaling 10,000 startups.
Recently in Singapore, the Monetary Authority of Singapore approved the application of equity crowdfunding platform FundedHere to exchange shares in return for funding.