Capital raising for digital native businesses and investors
Who ever said it is easy to get funding for an existing business? Unless you are an established publicly listed or high profile and successful business, investors will not line up to give you their money.
And as a business owner, you are not likely to be gung-ho about giving away ownership of the company, even a small part, to investors whose only interest is making more money for themselves down the line when they want to execute their exit strategy.
Small and medium-sized privately held businesses often struggle to secure funding whether it is to keep the lights on or to fund new ideas or market opportunities.
Fintech Innovation spoke to Fundnel, a Singapore-based private investment platform, that sought to bridge the funding gap that limits the abilities of established private businesses to secure funds.
According to Fundnel’s co-founder and CEO (photo right), Kelvin Lee, many high-growth, mid-sized companies are unable to dedicate the time and resources toward raising capital from public and private investors. The whole process can take months (even years), and typically involves many different parties.
“If founders could raise growth capital for their companies without spending so much money and time with bankers, they would surely prefer to do so. This is where Fundnel comes in to fulfill the capital needs of such companies,” he adds.
In the last 10 years, there is less interest among companies in going public. Many are opting to stay private to maintain better control of its assets, whilst also narrowing the number of investors that the company is answerable to.
“In line with this trend, one of my key objectives when starting up Fundnel was to help companies to streamline and quicken the process to raise money from private equity investors. We have proprietary tools and third-party software partners that help us to reduce the “human” effort and increase efficiency by leveraging the automation that such tools provide to sort out company evaluation, and legalities such as company disclosure. This helps to eliminate unnecessary red tape and reduce the number of parties involved, resulting in an evaluation process that is quicker but just as detailed,” explains Justin Chow (photo left), co-founder and Chief Marketing Officer at Fundnel.
Top Business Degrees claims that only 9% of small businesses have a chance of surviving 10 years. This might explain why investors are cautious about putting funds under their care into any business – established or startup.