By Jacqueln Cheok, Business Times
SINGAPORE is poised to become an investment destination for venture capitalists (VCs) and an essential cog in the global innovation network – backed by a receptive government that enables but knows when to “get out of the way”, said Foreign Minister Vivian Balakrishnan on Monday.
He was making his pitch to over 200 VCs and business leaders at the South-east Asia VC Summit organised by Kauffman Fellows, a Silicon Valley-based leadership programme for VCs that has since 1995 graduated 400 fellows who collectively manage some US$250 billion in assets.
“Singapore is a smart switch that directs traffic, regulates and keeps things safe. Regulators here know their job – they ensure fair competition, a level playing field and good infrastructure – but don’t get in the way (of innovation),” said Dr Balakrishnan.
To the enterprising individuals in the room, he added: “If you’ve got something novel that can change the world, try it in Singapore first. It is literally a plug and play system . . . and a place connected like no other.”
Dr Balakrishnan also shared a conversation he had with a summit attendee, in which he reiterated that local investment companies GIC and Temasek were not political instruments. “In Singapore, we don’t mix politics with business . . . if political, it subverts the mission of building entrepreneurial companies here.”
Vinnie Lauria, founding partner of Golden Gate Ventures and a Kauffman Fellow, agreed that the time is now for starting up in South-east Asia. “Half a million people are coming online for the very first time in the region, presenting a double growth curve for Internet startups.”
Mr Lauria also stressed the importance of stable governance for investors. “Singapore has built a platform of trust. With all the risk in the VC business, we don’t have to worry about risks arising from regulations or the lack of transparency. Even foreign visa policies here are very progressive, leading to the creation of a global hub,” he told BT.
But a bubble is forming, with the recent large venture funding rounds and high startup valuations globally, he noted, owing in part to the influx of unsophisticated money and investors who know little about the new technologies. “Nothing super dangerous right now . . . but something’s got to give,” Mr Lauria said at the summit.
In 2015, Singapore-based venture capital funds raised some US$226 million for investment, compared to US$297 million and US$225 million in 2013 and 2014, according to data intelligence company Preqin.
“Cash is just a necessary part of the equation; VCs should offer more value add,” urged Jeff Clavier, speaker at the event and founding partner of Silicon Valley-based SoftTech VC.
Singapore can also do with a “pay-it-forward” culture, where successful entrepreneurs return to the ecosystem as mentors and angel investors to the younger upstarts.
Said Mr Clavier: “Good karma always helps.”
Singapore has nine Kauffman Fellows, among them Golden Gate Ventures’ Mr Lauria and Justin Hall, NSI Ventures’ Hian Goh and Jungle Ventures’ Amit Anand.
This story is a reprint of an article in the Business Times that appeared on January 26, 2016.