South Korea’s early-stage accelerator-cum-VC fund Bigbang Angels has formed a global investment fund in Singapore in partnership with early-stage investor Farquhar VC.

Bigbang Angels and Farquhar VC will collaborate on investments into deeptech startups and accelerate the internationalisation efforts of early-stage ventures in South Korea and Singapore.

Farquhar will work towards enabling Bigbang Angels to establish a Singapore-based VC fund for global investments.

Bigbang Angels and Farquhar have been informally supporting each other with venture acceleration efforts in both countries. As Korean and Singapore startups are seeking to access other global markets (e.g. the MENA and the greater ASEAN regions), Dr Michael Hwang, CEO of Bigbang felt that this is a timely opportunity to synergise the capabilities of both organisations.

Also Read: Singapore’s Farquhar VC joins StockViva’s US$5M Series A investment round

According to Farquhar Chief Investment Officer Jason Su, Singapore startups such as Fairphonic and MyFirst achieved sharper product-market fit in North Asia, thanks to the nurturing efforts from the K-Startup Grand Challenge.

Farquhar looks forward to enabling the BBA Global Venture Fund to allow deeptech startups in both countries to scale to greater heights.

Established in 2012, BigBang Angels (BBA) is a Korean early-stage cross-border VC and accelerator which has invested in more than 100 startups in Artificial Intelligence, agtech, and other verticals.

Established in 2020, Farquhar is a Singapore-based VC fund that has invested in over 20 startups and achieved two exits. It is in the midst of making the first close of its second fund FVC Green Future Fund.

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Singapore-based impact investor Silverstrand Capital has announced an additional €15 (US$15.7) million investment in Netherlands-based aquaculture investment fund Aqua-Spark.

Silverstrand first invested in Aqua-Spark in 2020.

As part of the deal, Silverstrand’s Principal Kelvin Chiu will take a seat on Aqua-Spark’s advisory board, while its Head of Impact will join the investment committee.

Aqua-Spark is a global sustainable aquaculture fund with over 300 investors in over 25 countries. It has grown the amount under management (AUM) to over €450 (US$470) million since its inception in 2013.

Also Read: Silverstrand launches startup accelerator with a mission to protect, restore biodiversity in SEA

The fund’s portfolio comprises companies such as eFishery and Calysta. With the help of these companies, Aqua-Spark claims to have reduced the use of wild resources in feed by the equivalent of 58.6 million fish, upcycled 49.3 million kg of industrial waste, and improved the traceability for 40.4 million kg of food.

“With the global population having passed 8 billion people, smarter and more efficient methods for growing nutrient-rich food are needed,” said Amy Novogratz and Mike Velings, Co-founders of Aqua-Spark.

“Fish supply 17 per cent of the world’s protein, and by 2030 the planet is expected to eat nearly 20 per cent more fish. With our ocean approaching the brink of species collapse, this increase must come from sustainable sources: aquaculture,” they added.

Also Read: Silverstrand, The Meloy Fund back Indonesian agri supply chain startup Koltiva

As a single-family office with an impact investing mandate focused on combating the biodiversity crisis, Silverstrand is focused on advancing regenerative food systems and natural climate solutions.

In October, Silverstrand Capital invested US$10 million in Australian VC firm Carbon Growth Partners.

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Singapore-based VC firm Iterative has announced the close of its US$55 million second fund.

The LPs include Cendana, K5 Global, Village Global, and Goodwater Capital.

Silicon Valley founders and executives, such as Dropbox’s Arash Ferdowsi, Bukalapak’s Achmad Zaky, Andreessen Horowitz’s Andrew Chen, former YC COO Qasar Younis, Foursquare’s David Shim, and Airbnb Asia’s Kum Hong Siew, also invested in the second fund.

Iterative’s Fund II seeks to invest in seed-stage startups, write larger cheques, and make follow-on investments. Fund II will invest up to US$500,000 each in over 100 companies across pre-seed to Series A. 

Also Read: Iterative Capital, Eduspaze fund Indonesian language learning platform LingoTalk

Iterative positions itself as Southeast Asia’s answer to Y Combinator, enrolling the region’s founders into its accelerator programme, where it helps startup founders refine ideas and launch their products in the market.

Since launching its first fund in 2021, the VC firm has backed over 65 companies in five cohorts. Its portfolio companies include Singaporean fintech startup Spenmo, Pakistani travel startup GoZayaan, Singaporean proptech startup Propseller, and home services startup Sendhelper (acquired by PropertyGuru in October 2022).

Iterative’s portfolio firms have raised US$163 million in follow-on funding from investors such as Insight Partners, Tiger Global, Monk’s Hill, Wavemaker, Hustle Fund and others. 

Iterative’s total portfolio is currently worth US$1.2 billion.

Iterative is now accepting applications for its winter 2023 batch.

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It’s no secret that Asia is home to some of the world’s most advanced fintech markets, and they’re looking to make an ambitious move with the help of the Dubai International Financial Centre (DIFC).

Fintechs from Singapore and wider Asian markets are looking to establish themselves in DIFC and make sizeable investments in our ecosystem.

The fintech expansion

Sheer market size and high adoption of digital financial services have seen the Asia-Pacific landscape advance rapidly across both its younger and more mature economies. As they’ve progressed, however, global macroeconomic conditions are driving them to seek new opportunities to scale beyond their regional borders and into new economies with demand for ambitious fintech products and services.

Also Read: A new breed of fintech payment is here to slay the game

The fast-growing Middle East, Africa, and South Asia (MEASA) market consists of 72 countries, more than three billion people and a nominal GDP of US$7.7 trillion. These statistics sum up DIFC’s strategic importance as a preferred gateway for businesses with innovative financial services technologies continues to grow.

Just as Singapore serves as the hub for ASEAN nations, Dubai is their bridge to expand reach and capture opportunities in our emerging geographies, but with a familiarity that aligns with their sophisticated multi-national environments.

That’s why, in 2018, the Monetary Authority of Singapore (MAS) and the Dubai Financial Services Authority (DFSA) signed a fintech agreement that allows referrals of innovative businesses between the two authorities.

This agreement reflects the commitment and collaborative spirit of both regulators to support the continuous development of fintech and innovation to deliver new and enhanced financial services to manage risks better, reduce costs and increase efficiency.

In fact, some of Singapore’s top financial institutions already have their regional head offices in Dubai, including DBS Bank Ltd., Bank of Singapore Limited, Taurus Wealth Advisors Limited, Lighthouse Canton Capital (DIFC) Pte Ltd, Uti International (Singapore) Private Limited, and Singalliance Pte Ltd). Singaporean fintech, such as WeInvest, has participated in DIFC’s fintech Accelerator programme.

The latest hotspot

Over the last two years or so, Dubai has been attracting exceptional interest from fintechs across the globe for a variety of reasons. In the first nine months of 2022, the number of fintech and Innovation firms joining DIFC exceeded the total that established operations during the whole of 2021.

Widely, the UAE’s globally recognised management of the pandemic, strategic investment and business-friendly structural reforms, long-term residency schemes, and innovation-enabling regulatory environment has drawn entrepreneurial talent from every corner of the world.

In particular, the UAE has introduced various new long-term visa options and incentives for tech entrepreneurs and professionals to develop the country’s technology sector such as the Golden Visa programme offering 10-year residencies and the five-year Green Visa for freelance professionals.

The UAE is a stable, thriving and globally ranked talent hub. The nation ranked number one in MENA and #22 globally in the 2020 INSEAD Global Talent Competitiveness index. The country holds the top spot for ease of doing business in MENA while filling the time-zone gap between East and West, according to the World Bank’s Doing Business 2020 Report. Dubai also ranks in the top three best cities for ex-pats to live in globally, along with Miami and Lisbon.

Also Read: How is fintech different in Asia

Within DIFC, our comprehensive fintech and innovation proposition has created unparalleled opportunities for success for startups, global players and unicorns.

Our continually growing support ecosystem includes access to education, entrepreneurship and accelerator programmes, mentoring and networking, operating and regulatory licenses, and funding and expertise through venture studios – all under one cost-effective roof – presenting the ultimate platform to innovate and scale.

As more rigid governments struggle to reconcile legacy systems with the new age, DIFC’s progressive business-friendly and innovation-enabling regulatory regime, along with Dubai’s general openness and encouragement for innovation, is most appreciated by disruptors.

This approach means that they can engage in meaningful dialogue with regulators directly to look at ways to collaboratively consult on new models that may define the future of finance.

As a global capital for financial services and a leading hub for financial technology and innovation, our centre is also a space with significant access to sources of capital that have a greater appetite for risk and innovative and inclusive business models.

Between January and September 2022, DIFC-based fintech firms secured over AED2 billion (US$559 million) of funding, according to DIFC fintech Hive’s 2022 fintech Report.

Funding activity for fintech nearly doubled in 2021, and startups in MENA raised $998 million in 2021, a 78 per cent increase from 2020.

Most importantly, even as client growth continues to be strong across all sectors, fintech is now DIFC’s fastest-growing sector, outpacing all other sectors.

As we remain firmly committed to developing initiatives to further differentiate our strong reputation for fintech, we are looking forward to welcoming the influx of innovation and talent from Asia’s fintechs into our region and sharing their entrepreneurial spirit to help shape the future of finance.

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The Japan External Trade Organisation (JETRO) x Techstars Startup City Acceleration Program will showcase a diverse selection of startups that focus on educational technology, new style of social media, web 3 and block chain development, environmental and agricultural carbon-dioxide solutions, and more with a Pitch Day on 12 January 2023.

Since 2021, JETRO and Techstars have partnered to launch four cohorts of the Founders Catalyst Program as part of JETRO’s Startup City Acceleration Program. Through this project, cohort startups undergo a series of masterclasses and cohort-building sessions that help participating founders build and grow their businesses. Moreover, they will be able to access the necessary tools that will help them navigate the challenges within their own startups.

Also read: Is “teleporting” between workspaces truly possible?

Each startup will be able to connect with Techstars’ global network of entrepreneurs, investors, and corporate partners. This platform offers chances for startups to seek professional business advice and may even lead to potential partnerships and connections between founders and mentors.

Past Techstars Founder Catalyst programs have contributed to hundreds of business and investor connections and seeded countless relationships between participants and mentors. The insights, and strategies, and other perks that Techstars created are helping innovative startups grow, become stronger, and catch the attention of global networks.

Here’s a peek at the 20 startups of the JETRO x Techstars Startup City Acceleration Pitch Day

1. AndLaw Inc.
Solving blockchain interoperability. Their product Futaba is an infrastructure service that specialises in cross-chain data acquisition where developers can easily deploy nodes and send chain data securely.

2. Artics
Building an app called “artics”, a social media platform that allows you to find and collect music, movies, art paintings, novels, comics, and any book you love. Users can also upload their own artworks.

3. Audiostock Inc.
Audiostock is a service that allows users to buy and sell licenses to use their music for projects. The company is revolutionising music distribution to create a world where the sound you create reaches the people you want to share with, and everyone can use the music with peace of mind.

4. Soundol (Bivio)
Soundol helps audio content creators (musicians and podcasters) earn money. Soundol is a platform similar to Spotify but removes the middleman, enabling musicians and podcasters to earn directly from their fans via monthly subscription plans.

5. Blue Farm Inc.
Blue Farm Co. is a company that is engaged in the double cropping of organic green tea and carbon credits by DXing tea plantations in mountainous areas. Through the provision of their services, they aim to contribute to the realisation of a sustainable society by helping companies become ESG and carbon neutral, as well as solving the problems of aging farmers and abandoned farmland.

6. CULTA Inc.
CULTA Inc. will become the global market leader in Speed Breeding Technologies for horticultural crops. They are presently the only company in Japan using AI/ Machine Learning, Genomics, and Phenomics, all for the betterment of Agriculture. They will produce high-quality cultivars and develop the Seed to Table Model to improve productivity and profitability for farmers.

7. Equmenopolis Inc.
Equmenopolis Inc. creates LANGX, a language learning experience platform to help people learn and speak English using highly interactive conversational AI technology.

Also read: All that you need to know about the term sheet for approaching investors

8. FRESS
FRESS started off as a mental health platform that truly believes in people’s health inside out. The company aims to change the Japanese snack industry through its variety of products, particularly plant-based and additive-free snacks such as granola bars. Their products also include hemp, to benefit mental and physical health from them.

9. Global Stage Inc.
At InterEd, they focus on empowering students to take action on global issues through STEAM, global competence, and entrepreneurship. Their program challenges students to understand complex problems and work collaboratively to address them through innovative technologies while learning critical content and skills.

10. Goldfinch LLC
Goldfinch’s product, LingoTV, is Language learning version of Netflix that helps people learn languages from watching anime and videos.

11. KAUCHE, Inc.
Cowche is a share-buying app that allows you to enjoy shopping at a great price by group-buying with “share-buying companions” such as friends, family, or someone on SNS. KAUCHE Inc. creates an exciting shopping experience for both customers who shop and partners who want to sell products.

12. KJ COMMONS
KJ COMMONS is an ikigai Tech company that creates services and contributes to the evolution of the system (maximisation of ikigai). They work at the crossroads of business, art, and technology.

13. MatchHat
MatchHat is a web app that helps creators find collaborators for their passion projects from any city in the world. They have built MatchHat for global creators, artists, and filmmakers. Collaboration for creative projects can take place remotely where, for example, a filmmaker in London is collaborating with a researcher in Tokyo on an AI robot companionship film project.

14. Omotete, Inc.
Omotete is developing unfre., a service that makes menstrual pads retrievable in bathroom stalls everywhere, and aims to be THE provider of lifestyle solutions to consumers. unfre. is a BtoBtoC service, with their core customers being the end-users, facility owners, and advertisers/marketers.

15. PaylessGate Co., Ltd.
PaylessGate provides a set of authentication technologies using Bluetooth for the real world. With their App installed, users can register any type of service for authentication including tickets, IDs, smart keys, payments, etc.

16. Pit-Step, Inc.
Blockchain Novel is an NFT marketplace for collaborative fiction writing. Users create stories and Illustration covers and sell/buy them as NFTs.

17. PITTAN, Inc.
PITTAN lets people to analyse health conditions through onsite, easy, sweat amino-acid analysis methodology, and people can take personalised healthcare services. Their machine is so small, that it could be used also in space in the future.

Also read: The Big Leap roadshow kickstarts in Jakarta with a panel on the Gen Z market

18. Progummy Inc.
Progummy is an educational programming application for children that can be operated intuitively. It is the first visual programming application to have a collaborative editing function. This makes it possible to conduct group work in which multiple people work on a single program at the same time, which was previously difficult. Furthermore, teachers can easily monitor the progress of their students, which has been a challenge in online instruction. Currently, it is being used by several domestic programming schools for a fee.

19. Specialist Doctors Inc.
Specialist Doctors Inc., designs and develops web3 games to help middle and high school students achieve their first dream, such as a system that encourages gratitude and altruistic behavior and raises self-esteem, an AR function that allows people to talk to their minds and find their true selves when they are disturbed by anxiety, and a system to motivate people to see their future selves through AR, among others.

20. ZUU IFA. Co. Ltd.
Japan has big individual assets of about US 2 Trillion but does not have enough financial products to invest. ZUU IFA tries to connect the opportunities to invest US VC, PE and other unique asset class.

The team behind the JETRO x Techstars Startup City Acceleration Program – Global Scale

The Japan External Trade Organisation (JETRO’s “Startup City Acceleration Program” is an online program in partnership with the Cabinet Office of Japan. In this program, JETRO collaborates with six major accelerators to cultivate overall growth across the Japanese startup ecosystem, serving as an entry for some of the best Japanese startups to take on the global market. Through the program, startups will receive first-hand mentorship, matching opportunities with foreign investors, and new business partnerships, among many other exciting opportunities.

The Techstars worldwide network helps entrepreneurs succeed. Founded in 2006, Techstars began with three simple ideas—entrepreneurs create a better future for everyone, collaboration drives innovation, and great ideas can come from anywhere. Now, they are on a mission to enable every person on the planet to contribute to, and benefit from, the success of entrepreneurs. In addition to operating accelerator programs and venture capital funds, they do this by connecting startups, investors, corporations, and cities to help build thriving startup communities. Techstars has invested in more than 3,100 companies with a combined market cap of more than $150B.

To join the pitch day, RSVP here.

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In September, global funds network Calastone opened its office in Singapore. According to Ross Fox, Managing Director and Head of APAC, in an email interview with e27, this office will serve as a new regional headquarter for Asia Pacific –it will also reaffirm the company’s commitment to Singapore and the region.

“With 70 per cent of fund flows in Singapore already managed by Calastone’s network, we are well-positioned to enhance the city-state’s unrivalled status as a pan-Asian asset management hub,” he said.

Judging from the numbers alone, Calastone is not a new player in the field. It has worked with over 3,500 fund managers, asset servicers, and fund distributors spanning 54 countries and territories and processes over GBP250 billion (US$299 billion) monthly investment value.

In helping the industry, the company’s Distributed Market Infrastructure (DMI) combines the connectivity of its global network with technologies, such as distributed ledger technology (DLT) and cloud.

If we look at the finance industry’s future and the role of new technologies such as tokens, how exactly does tokenisation help fund managers? Most importantly, what is the prospect of Asia Pacific when it comes to this matter? How can Web3 companies embrace this new opportunity?

Barriers to token adoption

Before understanding how tokenisation can help the works of fund managers, first, we need to understand the common pain points faced by players in the fund management ecosystem. Fox lists at least four points with a lack of resources and capabilities to get better actionable insights around their clients and difficulty in freeing themselves from legacy technology as the top struggles.

Also Read: ‘Tis the season to be giving! 4 ways Web3 is transforming the fundraising sector

Apart from that, there is also the pressure to be more transparent and fierce competition from big tech and challenger banks. This is where Calastone steps in with their DMI to help fund managers.

“Our DMI is a next-gen infrastructure powered by the very latest technologies, including DLT and cloud. It can through the power of these technologies, enable participants to distribute and trade tokenised assets,” Fox explains.

“We are directly tokenising collectives of assets for distribution to the mass market. End-investors invest in digital tokens representing customised exposure to baskets of underlying assets managed by asset managers. Calastone’s tokenisation model meets both the demands of investors and asset managers for a product that is more personalised, cost-effective, flexible and aligned with the service levels modern customers receive from other natively digital services such as e-commerce and streaming media solutions.”

What is the most common barrier of entry for fund managers to adopt tokens? How can we eliminate this barrier? According to Fox, adoption is a key challenge for tokenised investments.

“Having the existing ecosystem is therefore key. At Calastone, for example, we’re already connected to the world’s leading financial organisations, so they can adopt new investment models such as tokenisation at a pace that suits them. Where other companies are building new products in isolation, we can use all our existing connectivity and infrastructure to enable asset managers to distribute new, token-based collective investment products globally from day one,” Fox elaborates.

“Regulatory considerations will be also key. Our model for tokenized collective investments is being developed with these considerations in mind, and we are bullish on the prospects of regulators around the world being open to it.”

Also Read: The Philippines can be ‘Korea of Web3’, says Axie Infinity Co-Founder

Why Asia Pacific is the future

When it comes to its readiness to embrace tokenisation, how does the Asia Pacific market fare?

According to Fox, the potential application of tokenisation in asset management has come a long way in the region. Aside from funds, the enterprise adoption of DLT has continued to progress. He gave examples of companies such as Unilever, and SAP that are teaming up to explore adoption of tokenisation in supply chains or Industrial and Commercial Bank of China (ICBC)’s 40 blockchain applications.

This provides exciting progress, especially since the regulator aspect is also catching up in the Asia Pacific.

Fox also shares how fund managers in the region differs from the rest.

“Modern investors want more personalised, low-cost investing, and desire access to bigger pools of assets, with a user experience that could parallel the lifestyle apps that we are familiar with. An optimised, modern user experience looks like this – instant purchases, ability to invest in real-time, access to fair prices and a broad range of investment assets tailored to their objectives and circumstances,” he says.

Calastone is currently working with several major global asset managers in building its tokenisation model, and it is currently being presented to regulators.

“In 2023, we expect the first stages of this new model becoming a reality as our work with asset managers crystalises. As the model evolves further and regulatory frameworks are established, the opportunities will grow exponentially, as accessibility increases,” Fox closes.

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Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.

Image Credit: Calastone

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Global investment and education company Seedstars has launched Seedstars Capital, an investment platform for emerging VC fund managers, with the support of Swiss-based investment holding company xMultiplied.  

The platform provides emerging and diverse managers with local expertise and unique strategies with the necessary resources to launch new funds and develop their investment firms. 

Additionally, it provides investors with a diversified allocation solution to the asset class within emerging markets.

With the platform, Seedstars expects to drive over US$500 million of new funding into emerging and diverse managers, who will create more than 10,000 new jobs and generate over US$20 billion of additional GDP across emerging markets in the next ten years. 

Despite the exponential growth of the VC industry across emerging markets in recent years, most early-stage VC funds raised are small in size (i.e. below US$50 million assets under management). These funds were raised by an increasing number of new and diverse teams with limited track records and resources, reducing the amount of capital LPs can deploy to these skilful and highly talented managers.

Also Read: 5 lessons from 5 years in venture capital

Seedstars seeks to bridge those market inefficiencies by working alongside new and diverse managers in developing their strategies, providing the resources of its large community of limited partners, mentors, experts, physical locations and the tech and administrative infrastructure. 

Benjamin Langer, Partner of Seedstars Capital, said: “We believe the VC industry needs to be more open and inclusive, and we find highly talented managers across emerging markets. Unfortunately, most lack the scale and resources to attract institutional LPs and depend on local funding to deploy their strategies and create the impact they long for. For LPs, the growing number of new managers makes it difficult to identify the best-performing and most impactful strategies. By pooling their assets and bringing them under our community, we can accelerate the growth of rising managers while offering limited partners the visibility and investment vehicles they need to increase their allocation to the asset class.”

The first fund launched by Seedstars is Seedstars International Ventures, an industry-agnostic pre-seed and seed-stage emerging and frontier market fund. Recently, the fund announced its first close, garnering support and commitments from notable LPs such as IFC, Visa Foundation, Rockefeller Foundation and Symbiotics. 

The platform also works with Seedstars Africa Ventures, a regional-focused fund to back companies in the African continent. The fund has partnered with French private equity and asset manager LBO France to address the investment gap existing in the region.

Moreover, Seedstars is currently working towards launching funds focused on edutech, supply chain, climate tech and other impact sectors with outstanding rising managers in emerging markets to be announced soon.

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The term sheet, sometimes referred to as the letter of intent or memorandum of understanding, is a preliminary document containing a summary of key terms agreed between parties to be used as a basis for preparing definitive agreements.

In the context of equity financing, the unassuming yet impactful term sheet can either make or break negotiations in a funding round.

In this article, we shed some light on the term sheet for Singapore startups looking to secure equity financing from external investors.

The big picture

Here is how the term sheet fits into the big picture and why it matters.

While the term sheet is usually drawn up at the start of talks with investors and is intended to be only preliminary to kickstart the funding process, it records the parties’ starting positions on key terms, which sets the tone for negotiations on the definitive agreements.

This is the case even if the term sheet is not legally binding as it is meant to signify the parties’ good faith in seeing the transaction through, much like a gentlemen’s agreement. In the course of the funding process, the term sheet will often be cited as a reference point, and a sharp deviation from its terms may risk rocking the boat.

Also Read: While traditional funding penalises a biz at its worst time, Jenfi gives them more leeway

As such, the term sheet should not be taken lightly, especially if it is legally binding, as it may end up being the only contract that parties can rely on if they fail to reach a consensus on the definitive agreements.

The use of the term sheet does not usually come into the picture until the company is ready to raise significant funds from external investors, where each funding round is typically demarked as series A, B, C and so forth.

This is because venture capitalists and other sophisticated investors coming in at such rounds with higher stakes often demand a greater level of assurance upfront through the term sheet compared to earlier investors at pre-series funding rounds.

It is common for the lead investor in a series funding round to dictate the form of the term sheet based on the lead investor’s preferred template or the previous term sheet used by the company in its last funding round (which goes to show the lasting effect of a term sheet in setting precedent for future funding rounds).

The life of the term sheet is intended to be a short one, surviving until such time the definitive agreements are executed to supersede and replace the term sheet. The main definitive agreements based on the term sheet for a series funding round will usually be the share subscription agreement and the shareholders’ agreement, from which other transaction documents may follow.

Binding or non-binding?

The term sheet can be legally binding or non-binding on the parties, the company and the incoming investors. While a legally binding term sheet may seem attractive to the company to secure the investors’ financial commitment as early as possible, the company should be wary of agreeing too soon to terms that it has yet to discuss with its key shareholders, especially if such terms adversely affect their rights.

The company ultimately needs to perform a balancing act to negotiate the terms with the investors whilst ensuring that such shareholders will be on board with such terms. If a longer runway is required for this, a non-binding term sheet may be more appropriate to give the company the flexibility it needs to adjust the terms down the line.

It should be noted that a non-binding term sheet can still contain certain binding terms, such as confidentiality provisions to keep the details of the proposed investment confidential (including any information disclosed for the purposes of the investors’ due diligence on the company) and exclusivity provisions often requested by investors to restrict the company from concurrently entertaining third-party offers for a limited period of time.

The key terms

The key terms in the term sheet typically revolve around three areas:

Also Read: With a looming recession, is office space really a wise investment?

• the deal economics (e.g. the investment amount, the class and number of shares to be issued and the ownership percentage they represent, and the valuation of the company used to calculate the share price);
• the rights attached to the class of shares to be issued (e.g. any dividend preference, liquidation preference, conversion right, redemption right, or anti-dilution protection); and
• specific investor rights and requirements (e.g. any board seat, inclusion in the quorum for meetings, reserved matters, information rights, pre-emption rights, right of first refusal, right of the first offer, tag-along right, drag-along right, founder liability, or founder restrictions).

Below are general tips on how start-ups and their founders can navigate some of the more contentious key terms. The information in this article is provided for informational purposes only and does not constitute legal advice which should be sought on a case-by-case basis.

Valuation

Ensure parties are negotiating with the same valuation metrics in mind (whether pre-money, post-money, or on a fully diluted basis) and look out for provisions which allow investors to adjust the share price in their favour or otherwise be compensated for any changes to the pre-agreed valuation of the company.

Dividend preference

Investors may ask for an annual dividend rate, a percentage of the share price, on a cumulative / non-cumulative basis and a compounding / non-compounding basis in priority to any earlier class of shares.

Also Read: Term sheet negotiation: 3 ways you can win investors

Consider negotiating for a non-cumulative basis (whereby dividends are declared and paid for any profitable year and do not accrue for non-profitable years) and a non-compounding basis (whereby the dividend rate will only apply to the share price and not together with any accrued dividends) in favour of the company.

Liquidation preference

The liquidation preference determines how the investors will cash out of the company upon the occurrence of a liquidity event, which the investors may try to define as broadly as possible to include not only the winding up of the company but also a trade sale or even a change in control of the company.

The liquidation preference is usually set to a multiplier (e.g. 1x or 2x) of each investor’s initial investment amount in priority to any earlier class of shares and can be participating (giving the investor upside benefits via a double dip to receive the multiplier amount and participate in remaining proceeds of the liquidity event in proportion to its ownership percentage on an as-converted basis) or non-participating (giving the investor downside protection via a single dip to receive either the multiplier amount or convert its preference shares to ordinary shares to receive its pro-rata share in the total proceeds of the liquidity event).

As the liquidation preference can set a precedent for future series funding rounds and eventually affect the exit strategy of the founders, who are usually at the bottom of the liquidation waterfall, consider keeping the liquidation preference minimal at a 1x multiplier on a non-participating basis.

Anti-dilution protection

Where the company issues preference shares to investors with a right to convert such preference shares to ordinary shares (whether at the investors’ option or upon the occurrence of certain events such as an initial public offering of the company), the investors may ask for anti-dilution protection so as to be compensated in a down-round where the company subsequently issues new shares at a price lower than the conversion price offered to the investors.

This is achieved by adjusting such conversion price downward based on any of the following formulae (ranked from least to most company-friendly):

• full ratchet (where such conversion price is adjusted to the lower price in the down-round);
• narrow-based weighted average (where such conversion price is adjusted by considering only outstanding ordinary shares in issue and/or issuable upon conversion of the investors’ preference shares); or
• broad-based weighted average (where such conversion price is adjusted by considering all outstanding ordinary shares calculated on a fully diluted basis).

The broad-based weighted average formula is most commonly used by companies as it results in fewer ordinary shares being issued to the investors upon conversion of their preference shares and consequently less dilution of ownership percentage of the founders and other shareholders with no anti-dilution protection.

Consider introducing exceptions to the anti-dilution protection, such as share issuances pursuant to the company’s employee share option scheme or the exercise of any options, warrants or convertible securities.

Reserved matters

Investors receiving only a minority stake in the company will often request reserved matters to allow them to veto and hence control certain matters relating to the company (whether at the board or shareholder level) despite having no general voting power over such matters as a minority shareholder.

Ensure the reserved matters are not likely to impede the founders’ ability to operate the company’s business. In particular, consider setting less rigid reserved matter consent thresholds by tying them to shareholding percentages rather than particular investors and qualifying any reserved matters to exclude low-risk recurring activities of the company.

If the founders lose board or shareholding control over time (which is inevitable the more investors the company onboards), reserved matters can similarly be used by the founders to retain some control over the company by adjusting the reserved matter consent thresholds in their favour.

Drag-along right

A drag-along right benefit specifies majority shareholders looking to sell their shares to a third-party buyer by compelling the remaining shareholders to participate in such a sale on the same terms, thus increasing the marketability of the company’s business for a trade sale.

Consider aligning the triggering conditions for the drag-along right with the founders’ exit strategy to allow the founders to cash out on such conditions, e.g. by prescribing a minimum sale price or determining whether the drag-along sale should cover all and not only some shares or extending to an asset sale.

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At e27, we have kickstarted a new articles series called work-life balance to learn more about tech enablers and executives and their lives beyond working hours.

As the Marketing and Content Manager, Sheryl Chen leads marketing, content strategy, partnerships, and community programmes at at Qualgro. Previously, she was a Programme Manager at Google Cloud for Startups, covering events, programmes and partnerships across JAPAC.

Chen holds a Bachelor’s in Sociology and a Minor in Entrepreneurship from Nanyang Technological University.

She is a regular contributor of articles for e27 (you can read her thought leadership articles here). 

In this candid interview, Chen talks about her personal and professional life.

How would you explain what you do to a 5-year-old?

This is tough! I still struggle to tell my relatives what I do during Lunar New Year gatherings, but I recently had a crash course on Baby Shark, so let me try.

Baby Shark wants to create a company that solves some of the world’s most significant problems, from the Pacific to the Atlantic Ocean. His solution knows no bounds. Baby Shark needs seashells to start his company to expand from his Sea Hometown to the Global Oceans.

Baby Shark seeks help from a V.Sea, a school of fish, which gives him seashells, dishes out advice, and helps him meet other sea creatures to help him in his quest.

The V.Sea, a school of fish, has many different roles, all of which are important. Some of them give out seashells, some advise the other sea creatures on where to look for the best food, and some make sure that the school of fishes are in the best shape to perform their roles.

My role at the V.Sea is to help Baby Shark look good when he is ready to put his best fin forward, so the world will know of the fantastic work that he has done! Baby Shark also has friends who have big dreams to change the world, and I hope to help them.

PS: Pinkfong, please hit me up if you want to do a series on popular but unconventional careers (e.g., data scientists, project managers) so we can tell the wee ones that there is more to life than being a doctor or lawyer.

What has been the biggest highlight/challenge of your career so far?

My biggest challenge was to pick myself up after being displaced thrice.

My heart is in pain with the current spate of layoffs. I am not a stranger to them. I’ve experienced my restructuring and was made redundant three consecutive times. This is something that I wish nobody had ever experienced, and each time I see news of mass layoffs, my heart breaks for the affected individuals.

I hold no grudge against the organisations I worked for and still keep them in high regard. They were all business decisions, and I tried my best in each role.

I spent a lot of time grieving each role and the future I thought I had, and each time felt like a kick in the gut. I didn’t know who I was outside of work and struggled to find meaning and value in life. I had days where I was unable to pull myself out of bed. I regret not reaching out to industry friends to ask for help or introductions earlier.

Also Read: Blockchain promises to be as foundational and indispensable as the internet: Amit Ghosh of R3

I started going to therapy, and we worked on building a sense of self outside of work and reframing my self-talk to be kinder to myself. Most importantly, how I shouldn’t let these setbacks define my career.

It took me a few years to be ready to share what happened to me, and only when I started sharing my vulnerabilities did I learn that it was more common than I thought and LinkedIn feeds (primarily) only show the glitzy side of peoples’ lives.

To anyone who is struggling and needs a listening ear, I’m here if you want to talk. Take all the time you need to grieve and heal. When you’re ready, pick yourself up, knowing that you have people around to support you. Know that what happened to you didn’t come from lack but was a factor of market conditions and business decisions.

How do you envision the next five years of your career?

I still see myself connecting people to people, people to ideas, and people to resources. It’s what sparks joy in me.

What are some of your favourite work tools?

Notion, EverNote, Trello, and Notability for iPad for time boxing (or old-school pen and paper work too).

What’s something about you or your job that would surprise us?

I unintentionally went viral twice.

The first time was because I stood up to a racist commuter on the bus. The second time was on TikTok when I filmed two cats at the right place at the right time.

Do you prefer WFH, WFO, or hybrid?

Hybrid. I still appreciate WFO because of the productivity, sharing, and cross-pollination of ideas. However, WFH is still better for me when I need to be creative and ideate.

What would you tell her if you could reach out to your younger self?

Your identity shouldn’t just be limited to what you do at work.

A friend once sent me this HBR article: What Happens When Your Career Becomes Your Whole Identity.

The article asks the reader five questions:

• How much do you think about your job outside of the office? Is your mind frequently consumed with work-related thoughts? Is it challenging to participate in conversations with others that are not about your work?
• How do you describe yourself? How much is this description tied to your job, title, or company? Are there any other ways you would describe yourself? How quickly do you tell people you’ve just met about your job?
• Where do you spend most of your time? Has anyone ever complained that you are in the office too much?
• Do you have hobbies outside work that do not directly involve your work-related skills and abilities? Are you able to consistently spend your time exercising other parts of your brain?
• How would you feel if you could no longer continue in your profession? How distressing would this be to you?

If we take a step back, we should also see that having a job is one of the many roles you play in your life. You can be a manager at work, but you are a daughter, wife, girlfriend, or mother.

I want to challenge you not to limit your identity to your roles. Sure, these are essential aspects, but what’s more important is the traits that make you who you are.

Also Read: Try to look at the world through a beginner’s eyes: Joey Alarilla of Playfix.io

So instead of How is Sheryl like? She’s a super hard worker, and she tries her best in everything she does. She’s executed xx conferences, worked with xx speakers, and put together xx minutes of stage content which achieved xx NPS score and xx audience turnout.

I would reframe it to Sheryl is exceptionally empathic, and I know she will always have my back. She’s also super compassionate, and she even gave herself a crash course on caring for neonatal kittens so that she could foster a two-day-old kitten. She’s also a great cook, and her memes are impeccable.

Can you describe yourself in three words?

Empathic, compassionate, resilient.

What are you most likely to be doing if not working?

Find me where the animals are!

After my third layoff, I started volunteering at a local no-kill shelter. They are home to over 100 dogs, 300 cats, and a couple of terrapins.

I upkeep my animal TikTok account, taking advantage of the following I gained from my one-hit wonder to educate the public to adopt and not shop. But content creators know how tiring churning out content is hence the word ‘try.’

What are you currently reading/listening to/ watching?

Unfortunately, I have a very short attention span for non-fiction books, so I toggle between a few books.

During a recent event we hosted, my portfolio company founders recommended a few books they keep returning to. I immediately carted the books out. 

They are: 

• High Output Management by Andrew S. Grove
• The Great CEO Within by Matt Mochary

I’m reading ‘You’re About to Make a Terrible Mistake’ by Olivier Sibony, a Senior Advisor at Qualgro. He talks about why organisations make terrible mistakes due to cognitive biases and how to create processes and environments to make better decisions.

I read fiction books like candy, and my all-time favourite author is Jeanette Winterson because she makes me feel all my emotions.

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Singapore-headquartered insurtech startup Igloo announced an additional US$27 million to close its Series B round at US$46 million.

The InsuResilience Investment Fund II, initiated by German development bank KfW and managed by impact investor BlueOrchard Finance led the capital extension, along with WAM, Finnfund, La Maison, and Series B lead investor Cathay Innovation.

The Series B raise was started with US$19 million in funding in March this year.

The additional funds will provide Igloo with a comfortable multi-year runway. With 50 per cent of Igloo’s team committed to R&D, the company plans to double down on attracting the best engineering, product, design and data talent across all geographies.

Igloo is also in the process of identifying and closing on various M&A opportunities.

Also Read: ‘Microinsurance will play a pivotal role in accelerating financial inclusion in SEA’: Raunak Mehta of Igloo

Incorporated in 2016 by Wei Zhu (ex-CTO of Grab), Igloo leverages big data, real-time risk assessment, and end-to-end automated claims management to create B2B2C insurance solutions for platforms and insurance companies.

It primarily targets the gig economy segment by providing “comprehensive and competitively-priced” insurance for delivery riders, through its Foodpanda partnerships in Thailand, Singapore, and the Philippines, as well as Lozi and Ahamove in Vietnam.

Recently, Igloo launched a Weather Index Insurance product in Vietnam – one of the top five rice-exporting countries. The product utilises blockchain-based smart contracts to automate claims payouts calculated using pre-assigned values for losses due to weather events or natural calamities.

In 2020, Igloo raised an undisclosed Series A-plus funding round, led by InVent. It also counts ACA and Openspace Ventures among its investors.

“Women are a major contributor to the economic activity in SE Asia and Igloo’s technology-led impactful model plays a critical role in securing their financial resilience by making insurance accessible to the most vulnerable and underserved segments,” said Rajat Arora, Head of Asia at WWB Asset Management.

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