Once you decide to grow your company as a startup, the amount of money you need to support the scale-up often exceeds what your current business can afford. That is why financing from different types of investors serves as a short in the arm and may help your company take off not only through the capital injection but also through the added expertise and network.

Below are the nine types of investors that are most commonly utilised in the startup world.

1. Venture capital firms
2. Angel
3. Angel syndicate
4. Personal investor
5. Accelerators/Incubators
6. Banks
7. Government agencies
8. Retail investors
9. Family office
10. Corporate venture capital

1. Venture capital firms

Venture capitalists are private equity investors who make investments through venture capital firms (VCs). They invest in high-growth businesses in exchange for a share of the company’s ownership. 

People or organisations who finance these VCs are called Limited Partners (LPs), including pension funds, endowments, foundations, finance companies, family offices and high-net-worth individuals. LPs have limited liability up to the extent of their investment and do not involve in the day-to-day management of the fund.

Meanwhile, individual professionals who are responsible for making investment decisions for the fund are called venture partners, or operating partners. They also generally take board seats in your startup after the investment.

Cheque sizes:US$200K – US$350M+

Also Read: SEA tech founders playbook: A to Z of becoming a fundraising legend (Part 1)

2. Angel

Angel investors are individuals who provide capital to early-stage startups. They are usually wealthy entrepreneurs who have a yearly income of more than US$200,000 or a net worth of more than US$1 million.

This type of investment is usually made in the form of a loan or a stock purchase, together with the advisor role of the angel. Since the deal is often brought up in between the startup’s first round of funding and a venture capital attempt, it yields high returns when the company scales up but also imposes high risks as most businesses fail at this stage.

Angels often invest in groups and form a network to keep track of new deals within the industry.

Cheque sizes: US$10K — US$30K

3. Angel syndicate

According to an explanation by Keystone Law, an angel syndicate is defined as a group of investors who agree to invest together in a particular project. It can be set up by angels or investees with funds that are drawn from any source.

An angel syndicate is led by a lead angel investor who coordinates the syndication and sits on the board of the company after investment.

Cheque size: US$25K – US$100K

4. Personal investors

Friends and family often support founders with their money, which turns them into personal investors.

Personal investors take the lion’s share among all sorts of financing sources, contributing more than US$66 billion yearly and an average of US$23,000 per project.

Since the loans or investments come from a close relationship, it is important to separate family and business, as well as state clearly the contract and terms prior to officially employing this investor type.

Cheque size: US$2K— US$30K

5. Accelerators & Incubators

Accelerator programmes provide a set timeframe where firms spend from a few weeks to a few months working with a group of mentors and experts to supercharge their business and avoid mistakes. Some of the most well-known accelerators are Y Combinator, Techstars, and The Brandery.

Startup incubators start with businesses or even single entrepreneurs, and they will not follow any fixed timeline. While some incubators are independent, others are funded or maintained by VC firms, angel investors, government agencies, and large enterprises, among others.

If accepted into one of these programmes, the startups may receive from US$10,000 to Us$120,000 in seed financing to help them develop and market their product, and access to extra information and resources.

Cheque size: US$10K – Us$120K+

Also Read: SEA tech founders playbook: A to Z of becoming a fundraising legend (Part 2)

6. Banks

Banks are a traditional financing vehicle and ranked fifth among the most common funding sources for startups, according to Dealroom.

Leveraging the finance industry, banks often invest in fintechs that can add to banks’ service offerings. Some banks also set up their venture arms to focus on startup investments. In this method, banks can be considered corporate investors.

However, it is notoriously difficult for early-stage startups and small enterprises to access banks’ funding as the startup needs to provide proof of a revenue source or collateral before its application is authorised.

Cheque size: Not specific 

7. Government agencies

There are government initiatives that provide funding for certain projects. They will not compel the firm to give up any stock, but they will have an influence on its profitability.

Startups are often qualified for these grants and schemes based on the government’s qualifying requirements, which might be difficult for new businesses to overcome. With this in mind, entrepreneurs should carefully consider what those expectations are beforehand to fulfil during their development.

Cheque size: US$10K – Us$120K+

8. Retail investors

Retail investors can be understood as non-institutional investors that include almost everyone who uses a broker, bank, or real estate agent to acquire and sell debt, equity, or other investments.

These individuals are not investing on behalf of others. Instead, they are managing their own funds. Personal goals, such as planning for retirement, saving for their children’s education, or funding a significant purchase, are the driving forces behind this type of investor.

Business strategies to attract sums of funds from a large number of retail investors might be known as crowdfunding (as in early-stage companies) or initial public offering (IPO) (as in mature companies).

Crowdfunding uses social media and crowdfunding platforms to connect investors and entrepreneurs. This type of investment works best for social media-savvy and B2C firms, which can employ the network effect as well as the customer base. When customers enjoy a product or service and believe in its future development, startups may take advantage of the potential to get initial funding to launch their product.

The majority of crowd funders are between the ages of 24 and 35. The average amount raised per campaign in the crowdfunding sector will be US$127,466.

Cheque size: US$50M+

Also Read: Pitch deck for dummies: A compilation of top tips and advice from the community

9. Family offices

Private wealth management advisory firms that service ultra-high-net-worth people (HNWIs) are known as family offices. They offer a full package of services, from budgeting, insurance, charitable giving, wealth transfer, investment, and tax services, to managing the assets of an affluent individual or family.

Since family offices are growingly interested in investing in startups, working with them might be extremely different depending on who is in charge of the investment choices and processes.

For this type of investor, taxes, long-term intergenerational investment, status, and income may be more critical than for other types of investors who are seeking a faster exit.

Cheque sizes: US$200K – US$10M+

10. Corporate investors

An incorporated business that chooses to invest in another firm is known as a corporate investor.

Big corporations may profit from investing in startups by bolstering their own growth figures and diversifying their holdings.

Some corporations also put financing into outside startups through investment, merger or acquisition. Some even establish their own accelerator and incubator programmes, as well as an ecosystem, to help cultivate these prospects.

Cheque sizes: US$200,000 – US$67B

—

Ready to meet new startups to invest in? We have more than hundreds of startups ready to connect with potential investors on our platform. Create or claim your Investor profile today and turn on e27 Connect to receive requests and fundraising information from them.

Image Credit: 123rf

The post Finance your startup: 10 types of investors you should know appeared first on e27.

Every October, we celebrate World Mental Health Day to raise awareness of mental health issues worldwide and mobilise efforts in support of mental health. Over the past 18 months, understanding mental health and wellbeing has progressed significantly– not just in the media or in our social spheres but also the workplace.

This increased focus on mental health and wellbeing has signalled a vital realisation that employee health is critical for enabling business continuity and resilience. Many businesses are making great strides in putting workforce wellbeing at its core.

In the wake of the latest World Mental Health Day, it’s the perfect opportunity to reflect on how organisations have supported their workforce since the onset of the pandemic and how these strategies should evolve as the pandemic continues into its third year.

Moving towards an endemic COVID-19

As Singapore moves towards an endemic COVID-19, we see gradual changes in our daily lives. International borders are reopening, large-scale events are resuming, and we are slowly returning to the office with greater frequency.

As we prepare to live safely with a virus here for the long haul, the authorities have adopted a reactive strategy that involves constant adaptation and implementation of restrictions and measures for social and business purposes.

This transition will require a significant paradigm shift in how organisations view and manage workforce health and wellbeing.

A proactive approach to building resilience, wherein businesses can anticipate and react to future events swiftly and decisively, will better equip them with ways to tackle the next wave of health concerns– be it a real issue like influenza or a silent one like mental health.

According to International SOS’ Risk Outlook 2021, one in three business risk professionals predicted mental health as a primary productivity disruptor this year. Left unmanaged for 2022, this could have serious financial and business continuity repercussions.

Also Read: Why Khailee Ng puts mental healthcare support as key to successful founders-investors relationship

Most pressing amidst the changes in restrictions is the recognition that these ever-evolving restrictions can take a toll on employees’ mental wellbeing. Weathering through these changes will require agility and flexibility– but how can businesses offer this to employees, whether they are working on-site, remotely, or in a hybrid arrangement?

Education is important in helping employees understand that an endemic COVID-19 is not a step backwards from the past 18 months of trying to eradicate the virus with it.

Backed up with clear and open communication about the business direction, goals, and concerns will help allay fears, provide clear guidance, and instil confidence and trust in the organisation’s response towards future crises.

Acclimatising to business as usual

Looking ahead, a state of endemicity will enable us to resume business travel, on-site operations, and even attend or organise large-scale work events and conferences.

While these might be exciting for parts of the workforce, we must also keep in mind that other segments of the workforce might approach this with greater trepidation.

While it might be instinctive to view re-entry anxieties and fears as personal struggles, they can also impact productivity and trust in the organisation.

Business leaders have a critical role in supporting employees emotionally through these concerns and fears and taking steps to build a healthier and more resilient workforce. In working with clients on such issues, we have identified three crucial steps towards fostering an environment that prioritises mental wellbeing.

Begin with knowing your people, understanding where they are at, and how they can be supported. To provide organisations with insights into their workforce wellbeing, we have developed Emotional Health or Resilience surveys with tools that have been scientifically validated and can uncover individual concerns.

With these findings, organisations can understand how the workforce is coping with the ongoing situation and curate a tailored programme to address specific issues.

Once you are aware of how your workforce is faring, you can assess your workforce risk levels. The information from the surveys can help HR teams and managers identify employees who are more emotionally vulnerable and hence require more attention and assistance.

With that knowledge, they can create a safe space for all so that employees know they have a good support structure to lean on and can share openly about their emotional health challenges without fear of discrimination.

Also Read: Leaders, it’s time to talk about mental health

Businesses should not underestimate the power of emotional support services such as remote confidential counselling and telehealth assistance by a team of health experts. Above being able to provide clinically-proven support for affected employees, these third-party services offer employees easy access and greater security that their issues will be handled with discretion and professionalism.

These channels should be communicated widely and consistently. By implementing multiple, varied channels of support, employees can be assured that they can seek assistance and support so that they are comfortable.

Preparing for future crises

Raising awareness for mental health issues frequently will help to combat stigma and cultivate a workplace culture that is resilient no matter what comes. This can come in the form of conveying the types of support available and sharing resources on ways to deal with stress, manage workloads, and keep an excellent work-life balance.

With this positive workplace culture, the organisation also demonstrates its openness to support and actively encourage actions that promote mental and emotional wellbeing.

Different teams, including crisis management, HR, and business continuity, should work together to adopt a more holistic approach towards workforce wellbeing, ensuring consistency and sustainability.

While these teams have previously operated in silos, the pandemic has brought an added dimension of employee wellbeing into crisis management. Teams that can work together to address twin operational and employee well-being issues have tremendous success at crisis management.

Whether the next crisis is of a medical, political, or environmental nature, organisations with employee health and wellbeing embedded in their culture, combined with robust approaches towards crisis management, will be in the best position for recovery.

Also Read: Moving mental health out of Freud’s era and beyond the couch with big data

We are now at a pivotal moment in our battle against Covid-19 – and the steps businesses take to address employee health and wellbeing will have long-term implications on business resilience, continuity and sustainability.

Building an environment that places mental health as a core pillar of business resilience will foster a workforce that can weather challenges, bond closer and develop loyalty. With the adequate support and resources to build their mental resilience, employees, in turn, will make a healthy and robust organisation that’s poised for success.

–

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic

Join our e27 Telegram group, FB community, or like the e27 Facebook page

Image credit: archnoi1

The post How to tackle employee mental health to build a resilient workforce appeared first on e27.

Technology has been a lifesaver during the COVID-19 pandemic as it kept individuals, societies, and economies connected to one another. Among population demographics, Southeast Asia’s youth, which technology already inculcated into their daily lives prior to the pandemic, have been further pushed to the digital forefront.

Companies, especially those selling products and services to the public, have been quick to follow the market and adopt digital practices, given that the world will never return to the old-fashioned way once the pandemic ends.

Revolutionising insurance practices

One industry running to remain abreast with young customers is insurance. Realising the sheer breadth of this youth target market, which includes millennials, insurers have begun inching away from legacy business practices to become more digital. And there cannot be a better time, as COVID-19 has made consumers realise the importance of insurance as a buffer against life’s uncertainties.

Aware of the digitalisation trend within the insurance industry, personal finance comparison site, MoneySmart, recently released the report “Bots Versus Bodies — Insurers in Singapore Can Do More To Provide The “Phygital” Experience That Customers Really Want” which explored the struggle insurers face in refitting legacy processes and products to conform with the contemporary customer. On one side, insurers feel the pressure to add digital channels that enable customers to self-serve, i.e. independently find the information on or purchase an insurance product. Yet, the complexity of insurance products means that the presence of real-life advisors remains crucial, with the report revealing that 91% of respondents asserted overall satisfaction when an advisor assisted the insurance purchase.

Also read: Wealthech startup Kristal AI looks to democratise private banking

So, where does the equilibrium of the “phygital” — or intertwining of the physical aspects of insurance, notably advisors, with the digital, such as insurtech — experience lie? A survey on customers of four types of insurance products, namely “car, critical, hospitalisation, and home contents” reveals that this equilibrium shifted alongside the scale of the perceived complexity of an insurance product and its purchase stage.

Car insurance, for example, is on the low end of the scale, meaning that customers find these products relatively straightforward to understand. Hence, car insurance will benefit from gaining greater availability of convenient, self-service digital channels. The research shows a strong preference for digital channels among car insurance customers.

Right from the beginning of their purchase journey, 80% of respondents said they used financial aggregators, notably MoneySmart’s car insurance page, as their source of information given the ease of obtaining what they need, including insurance quotes. As many as 52% of customers even chose to get their car insurance online, with 92% saying that they were satisfied with the online purchase process. With financial aggregators also offering online applications, it is not surprising that customers seek this streamlined experience. 

Moving up the scale next is critical illness, followed by home content insurance. For the latter, the research makes it clear that there is more of a balanced need between bits and bodies. Customers strongly opt for self-serve channels to learn about the choices available in the market, with financial aggregators emerging as the top pick again at 88%. A benefit of financial aggregators such as MoneySmart’s home insurance listings is not only the consolidated information in one spot, but also the special offers insurers dispense for online buyers. Yet, 83% of respondents would rather make claims through an advisor given the complexity of the process.

The scale ends with hospitalisation insurance in which customers found the assistance of knowledgeable advisors deeply reassuring even during the shopping process given the importance and complexity of these products.

Maximising the best of both worlds

With regards to purchasing stages, customers overall turned to digital channels to gather initial information on insurance, with 73% visiting online financial aggregators. Yet, during the complex claims process, 65% of customers chose to submit paperwork via advisors to secure a successful outcome.

Also read: These startup champions are ready to build a new Hong Kong

However, a closer look at each stage shows that “bots” and “bodies” have a mix of roles in every stage. In the purchase planning stage, customers researched insurance products by visiting websites and discussing them with family or friends. Then, in the shopping around for the best product stage, customers start heading to advisors and websites that they believe would give unbiased insights. Next is the actual buying of the insurance product stage where, despite an even split between customers purchasing online and via an advisor, those who chose the latter reported higher satisfaction. In the last stage, which is making claims on the policy stage, customers overwhelmingly preferred advisors who could walk them through the complex procedures, thereby minimising errors.

However, despite the importance of a cohesive “phygital” journey, the report pointed out experiential gaps, whereby one of them appears early on in the consumer journey. Digital channels intended to facilitate the pre-purchase stage often lacked the simplicity to address customer queries, such as on premiums and coverages, in a straightforward language that customers would instantly comprehend. As a result, customers go back to looking for advisors who can personalise the explanation.

Bridging the gap with MoneySmart

MoneySmart shares a number of recommendations for insurers wanting to plug the gaps. First, to solve the lack of simplicity of digital touchpoints, insurers must craft content that speaks with clarity to a wider segment of the audience. Insurers can experiment with embedding bot algorithms that enhance the understanding of questions whilst extensively utilising templated answers. And with customers becoming more comfortable with video conferencing, on-demand video calls with advisors can give customers the exact answer needed.

Also read: QBO partners with e27 for Startup Venture Fund Pitch

With the pre-purchase digital touchpoint solidly serving customers, it is now time to turn eyes to the next stage, which is catering to customers of insurance products with advanced complexity. This class of customers crave a concierge experience in which advisors cater to the entire process of selecting policies, compiling documents, as well as processing and submitting claims. MoneySmart proposes improving interactions by offering seamless omnichannel touchpoints that blend the best of both bots and bodies, encompassing tailored digital content that provides comprehensive pre-purchase information, on-demand access to advisors through all platforms, and an efficient online application process.

The success of insurers in finding the perfect equilibrium for the products will ultimately lead to a stronger industry that knows exactly how to give customers the personalised experience that they want — “bots” that get the job done and “bodies” that help them get through it.

– –

Photo by Kampus Production from Pexels

– –

This article is produced by the e27 team, sponsored by MoneySmart

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

The post Bots vs Bodies: can insurers strike a balance between human services and tech? appeared first on e27.

Thailand-based listed agrifood major Thai Wah Group has formed a new venture investment arm to support B2B food and agritech startups in Southeast Asia. 

As per an official announcement, the subsidiary will have a US$3 million (THB 100 million) registered capital. It is expected to complete the registration in Q1 2022.

Also Read: How 73-year-old Thai Wah works with tech startups to break new ground in noodles production

As reported in TechinAsia, in its initial phase, the VC arm plans to invest in eight to ten early-stage startups over the next two to three years. It seeks to co-invest with other VCs in revenue-generating firms that are raising US$3-10 million in pre-Series A or Series A rounds.

Apart from funding, Thai Wah Ventures will also provide value-added benefits such as R&D, pilot development, and production roll-out. Thanks to the VC, startups will have a better grasp of the retail, wholesale, and cross-border distribution markets.

The major goal is to invest in food and technology enterprises in several sectors connected to Thai Wah Group’s core industries, including but not limited to farm technology, food processing and bioplastics.

The company says it is in talks with some of Asia’s VC firms to co-invest in the selected startups, aiming to assist at least four portfolio companies in becoming unicorns in the medium term.

“Not a single person or company can do everything themselves if they want to make the right move and fast. We believe open innovation will help us develop the right solutions faster,”Hataikan Kamolsirisakul, head of Strategy and Innovation at Thai Wah Group, told e27 in an interview last year.

Founded in 1947, Thai Wah Group provides B2B food ingredients, starch, tapioca starch and flour within a global food supply chain business. 

Touted as Asia’s largest distributor of vermicelli noodle goods, the firm claims that it has 13 operations in Asia and its business stretches across 30 countries in Asia, the US and Europe.

Also read: Agritech ecosystem in Thailand: More than 60 per cent of startups have not raised external funding

Thai Wah Group has been selected in the Stock Exchange of Thailand’s Sustainability Investment list over the past three years. It is also a part of the United Nations Global Compact program since 2020.

According to AGFunder, Southeast Asia’s agri-foodtech startup ecosystem is one of the world’s fastest-growing marketplaces. In 2019, the area secured a total of US$423 million in funding across 99 deals.

—

Ready to meet new startups to invest in? We have more than hundreds of startups ready to connect with potential investors on our platform. Create or claim your Investor profile today and turn on e27 Connect to receive requests and fundraising information from them.

Image Credit: Thai Wah Group

The post Thai Wah Group sets up VC arm to invest in food and agritech startups in SEA appeared first on e27.

ARC Group, a Shanghai-based boutique mid-market investment bank with offices in Singapore and Jakarta, has launched a US$20-million SPAC opportunity fund, called ARC Opportunity Fund.

An open-ended fund, a SPAC opportunity fund invests money as risk capital with sponsors to create new SPACs. (Special purpose acquisition companies or SPACs are blank-cheque companies that provide an alternative way to list in the public markets.)

A top executive of ARC Opportunity Fund told e27 that the fund has already made the first close at US$12 million (almost 60 per cent of the target size). The Limited Partners include family offices and entrepreneurs based in Malaysia and Indonesia.

Also Read: Can SPACs avoid another reverse merger crisis?

“Going public via SPAC mergers has seen tremendous interest in the past few years and has boomed on Wall Street since 2020, raising more than US$83 billion in 2020 and over US$125 billion in 2021 so far. However, its popularity has begun to wane as many SPACs trade below their initial IPO price,” said Chittransh Verma, managing director of ARC Opportunity Fund.

Typically, a SPAC is created by a sponsor who invests 5-6 per cent of risk capital. With this investment, the sponsor will become a 20 per cent holder of the SPAC after IPO. Once merged with a target company, the sponsor gets 5-6x returns on an average in a period ranging from one year and a half to two years.

“The capital required to invest as a sponsor in the SPAC risk capital makes this structure generally accessible to only ultra HNIs. ARC Group has identified this gap and decided to bridge it by making this market more accessible to a broader set of investors,” he said.

Headed by CEO Abraham Cinta and Verma, ARC Opportunity Fund will invest alongside high-quality SPAC teams globally.

According to Verma, the fund will invest by assessing sponsors’ ability to merge with the target company, and it has created a framework to select sponsors. “We can invest in 10-12 SPACs across varied sectors, geography, and sizes with each fund. We will target Asian sponsors who want to create SPACs. 90 per cent of them would be in the US market. However, we are also exploring options to work with sponsors looking to create SPACs in Singapore.

Also Read: The hidden danger in SPACs. Is the hype worth the risk?

ARC Opportunity Fund is yet to start investment from this fund.

Founded in 2015, ARC Group has been focused on providing public market solutions to mid-market companies with offices across Asia. The group has been a financial advisor in over 30 SPAC transactions.

—

The post ARC Group launches US$20M SPAC opportunity fund, hits first close appeared first on e27.