Archive 29/09/2016

8 Minutes Online Survey on Financing Technopreneurs

Dear Malaysian Startup,

Take a few minutes for a good cause.

The Malaysian Techno-preneurship scene has never been this exciting before. With an objective to understand what work and what doesn’t when it comes to financing your tech startups, Jamal Nassar a doctoral candidate at INCEIF is embarking on an academic research on “Financing Technology Startups in Malaysia & The Role of Islamic Finance”.

As we all know, technopreneurs are busy building & breaking big things, so we have designed a short and easy to fill online survey. It is expected to reasonably take 7-8 minutes.

The purpose of the questionnaire is to measure financing, innovation, government role and potential role of Islamic Finance.

The survey also attempts to measure the financing practices of the various Malaysian ethnic groups with a purpose of shared learning outcome.

The outcome will be used for shared learning proposes and to contribute to the overall tech startup ecosystem and entrepreneurship in Malaysia.

If you have already filled this survey,please help us spread the word to other startups in the ecosystem… this is for all Malaysian Startups to participate in.

Please click the following link to Start the Survey Now:

https://docs.google.com/forms/d/1pvHSLEr96NuaMHzN3Vy6z3p8quS3vtEICDxWdx4iQjk/viewform?edit_requested=true

Your individual participation will make an impact this survey.

Thank you,

For more information about this Survey, please contact:

Jamal Nassar @ tojamalnassar@gmail.com, 1200042@INCEIF.org.

Give the generation in Malaysia a Eco environment with education and business

Current Status Concept / Business Plan
Amount Invested RM 500,000
Funding Required RM600,001 to RM1,000,000
Description Ideas:My business ideas is from me and my family after visiting hokkaido, Japan. The researcher found that there is most of the young generation had lack of the knowledge about recycle the rubbish such as plastic bag, paper and also aluminium. As a researcher from the reservation, I found that Malaysia is a very not opened country compare to other asia country. The population and the education in rural area is really limited and very less than city like KL, Penang and JB and most of the young generation going to cities like singapore for more job and financial opportunities. We should encourage them to do that. We need a clean environment and non-pollution environment. We should support those young generation to do more about recycling and provide more machine like vending machine, and recycling machine as in a shops to make peoples , adults, youngster have a power to do recycling and not to throw rubbish all the corner even in city or rural areas, Malaysia is lack of the education for that.

Business: To own the eco business in every corner in malaysia, we should start from the attitude and personality of everyone for even poor or rich peoples. The researcher proposed to start the business which is open a shop and set up half shop of vending machines which provide drinks or snacks for customers. And another half of shop which is for recycling machines. For those recycling machines, we can bring out the knowledge of doing recycle and we can contact recycle factory to sell or as a raising funds. In the shop we also educated the process of recycling in the wall. After do recycling, the machines will print out the rewards or points to exchange things in certain retails like convenient stores 7-eleven, 99 speedmart and more.

Products: Vending Machines and recycling machine which is really well-known in Japan.

Business Opportunity The opportunity for angel investors and the researcher is very powerful and we had solved the pollution in Malaysia, even a oldster will do the collect for the recycling items. It will expand the market once the business is running. The market is for youngster like 12 years old to 21 years old and also educated adults and oldster is for all persons. Everyone can be our clients or customers. But the one of things is even television, radios, internet, newspaper and marketing strategies should very huge amount like rm100,000 to invest. We hope that the artists like Radio DJs can help us to promote too. The social network should also have to maintain like facebook, instagram, and twitter. So that, others country will look up for us and have confident with us. The shop can be 24 hours or business hours depends on the security for the cities or areas.
Revenue / Business Model For the vending machines, we can earn much more even better that buy in convenient shop and we no need the workers salary. It is just a machine and we just collect the money. On the others hands, the recycling machines will collecting the unwanted items and we can sell to recycle factory and it is another revenue for both of the business model. The vending machines normally we can insert the snacks , sweets, toys, foods and beverage for everyone can effort to purchase. One vending machines is around RM10,000 and we purchase 5 vending machines for one shop left side and 3 recycling machines for around RM 10,000 per machine at right side. After they eat or drinks , the items could be known as recycle items. So that, they can do recycle in the same time or later. The middle of the shop we can put the long tables and long chairs for our customers. The shop should be provide wifi services for students to do assignments. The shops can be at university areas like subang ss15, rural areas, big cities, bintang walk, bangsar, all the corner of kuala lumpur and selangor.
Management Team Management Team would be as below:-
1 of managing director – angel investor
1 of operation director – The researcher
10 of branch manager – 10 employees to collect revenue
3 of accountant – 3 employees
5 of customer services – 5 employees to support end-users
3 employees of marketing department -provide the marketing ideas to promote eco systems.
Company Background Date you start the business: Start of 2017, January.
Investment made to date: Before January 2017.
Subscriber: Students, Adults, oldster.
Sales for a months: RM 6000 for vending machines, RM 10,000 for recycling items.
Profits: RM8,000**
Milestone achieved to date: Now or later.
Funding Milestone Amount of funding required: RM500,000
Proposed use of fund: RM100,000
milestone expected to achieve at each funding stage: RM 500,000
% Equity Allocation 2 percents.
Expected ROI 70 percents.
Risks and Mitigation Risks and mitigating factors:
1. Malaysian did not received the recycling information from us.
2. Malaysian lack of education background especially in rural areas.
3. Malaysian youngster have a broken or imperfect family like divorces.
4. Malaysian lack of knowledge for green environments.
5. Malaysian don’t like to do rubbish categorize for recycle.
Exit Strategies The is a very perfect ideas for government of Malaysia to support green Eco friendly environment in our country.
There is no exit opportunity for investor, it is a very important turnover green world for Malaysian.
It will raise up the currency of ringgit Malaysia if it is successful.
Investor can exit the opportunity after 10 years which is 2026.
Company Name 23sen Products store Sdn. Bhd
Website/Facebook http://www.facebook.com/23sen
Business Address 1, Jalan Bukit Lentang 9
Contact Person Frankie Tan

Stevia Plantation on 300 Acres of Land Located at Lojing, Gua Musang, Kelantan

Current Status Concept / Business Plan
Amount Invested None
Funding Required RM5,000,000 or more
Description The company (Agrostevia Worldwide (M) Sdn Bhd) is planning to set up a stevia plantation on 300 acres of land located at Lojing, Gua Musang, Kelantan under a new SPV called Agrostevia Plantation Sdn Bhd. The company had done it before 5 years back in Sepang and the project was a success. Since the project was planted under the commercial land, it was taken back by the developer and now the company has identified a 300 acres of land at the said location (owned by Yayasan Anak Yatim which is leased from Kelantan Government). The off takers have been secured and the cost of the project on 100 acres of land is RM13 million (300 acres is RM39 million but the investor can choose the number of acres they wish for) and the owner is currently looking for a partner(s)/investor(s) to fund the project. Should the investor(s)/partner(s) be interested to invest, the procedures are as per below:-

1.       If you agree to invest, then, the representatives of the three parties (investor(s), Agrostevia Worldwide (M) Sdn Bhd, Yayasan Anak Yatim) will meet and discuss on the company’s formations and conditions.
2.       All parties involved in the Stevia Plantation project would then visit the land intended for the plantation.
3.       The company secretary/lawyers would later prepare the following documents/agreements:-
a.       Share holding/equity of each party in the new company.
b.      Registration of Agrostevia Plantation Sdn Bhd with the ROC.
c.       The Lien documentation/agreement on the portion of land on which the plantation will be located (which the Yayasan Anak Yatim leased from Kelantan Government).
d.      Open a bank account for the company.
e.      Your party shall deposit the agreed investment into the bank account.
4.       Agrostevia Worldwide (M) Sdn Bhd shall prepare a new projection Cash Flow and Profit & Loss in accordance to the investment amount your party will make. Thus, we would like to know the amount your party intends to invest in Agrostevia Plantation Sdn. Bhd. (which shall be formed when all parties have agreed on the terms of the Joint Venture Company).
5.       Then the stevia project would commence operation as soon as possible.
6.       Plantation Management and technological aspects would be provided by the Agrostevia Worldwide (M) Sdn Bhd, capital investment would be the investors’ responsibility, and Yayasan Anak Yatim would provide the land required to locate the plantation.
7.       The new plantation company would purchase the stevia plantlets from Agrostevia Worldwide (M) Sdn Bhd to ensure quality stevia leaves are produced.
8.       Agrostevia Worldwide (M) Sdn Bhd would sign a guaranteed purchase agreement with the new company to purchase all the dried harvested stevia leaves.

Business Opportunity The barriers are:
1. Tropical Climatic and Sunlight (photoperiod)
2. Fertilizer
3. Watering requirements
4. Early flowering due to stress
5. Propagation
6. Weeds

We have overcome all the above barriers.
1. We introduce the misting watering system to lower the temperature, provide gradual watering, induce temperate climate, reduce stress and prevent early flowering.
2. Built Sheds for our nursery to reduce direct sunlight and maintain moist temperature to encourage plantlet propagation with 100% success.
3. Produced Organic fertilizer with lesser Nitrogen and introduce zeolite.
4. Provide artificial lighting to ensure plants are exposed to the required photoperiod.
5. Dig a water retention pond and pump up water to retention tanks for the misting system.
6. The beds are covered with “silver shine” a plastic cover to prevent weeds from growing.

PROBLEMS WE SOLVED
• Assist Governments and WHO to combat growing NCD (non communicable diseases) population from rapidly increasing and help control escalating global medical costs. The regional medical cost for diabetes is estimated to be RM382 million in 2013. The Ministry of Health had recently accepted stevia as an alternative to sugar.
• Provide an alternative to sugar and produce healthy food and drinks sweetened with MySweet stevia.
• Overcome manufactures’ problems by reducing product ingredient cost by up to 58% especially those products that uses high sugar content.
• Lower inflation problem by reducing retail price of products and result in a win-win-win situation for the consumers/manufacturers/governments.
• Revive abandoned agricultural land by introducing stevia contract farming projects to boost production and rural farmers’ income.

MARKET POTENTIAL
• “Global Stevia Market Analysis & Opportunity Assessment, 2014 – 2020” (BUSINESS WIRE) LONDON, Mar 10, 2015 — Future Market Insights (FMI) announced its latest report, the global stevia sweetener market is projected to account for US$565.2 Million of the overall sweetener market by 2020, registering a CAGR of 8.5% during the forecast period where Demand exceeds Supply.
• Global NCD population is 30% of World population (2.2 billion), 45% of Malaysian population (13.5 mil) and 50% Malaysians are obese /overweight (15 mil).
• Potential to be the next new export commodity for Malaysia (432,000 tons@RM120 billion). (Our Palm Oil export 18.1 million tons in 2014@ RM43.2 billion) by 2020 (stevia =RM280,000/ton > Palm Oil =RM2,386 /ton ).
• The huge market of the Global food and beverage industry (US$150 million)
• The huge Global market for organic and HALAL industry (US$85 million)
• The market for dental/Global Toothpaste to reach US$12.6 Billion, cosmetic and herbal medicinal products industries (RM10 bil/year).

Revenue / Business Model Revenue for the investor(s)/partner(s)
1. The stevia crop once planted could be harvested every 45 days beginning from the 7th month for 6 years.
2. Every harvest would yield about one ton per acre which would be sold to Agrostevia Worldwide (M) Sdn. Bhd. for RM10,000.00 on a ‘buyback’ contract.
3. The approximate gross income would be RM1,000,000.00 per harvest and we could harvest the stevia crop 8 times per year, which will bring a gross revenue of RM8,000,000.00 per year. ( 4 HARVESTS only i.e. RM4 million for the first year revenue )

Revenue for Agrostevia Worldwide (M) Sdn Bhd

1. The stevia purchased from the Agrostevia Plantation Sdn Bhd will then be sold to the off takers (already secured).

Management Team The current management team consists of a Managing Director, a Technical Manager and a Plantation Manager with more than 5 years of management experience in the stevia industry.
Company Background Agrostevia Worldwide (M) Sdn Bhd is a modern commercial stevia plantation and the production of stevia based products, with more than 5 years of management experience in the stevia industry. Established in 2010, with a paid-up capital of RM250,000.00, the company constantly develops innovative stevia planting techniques, mechanized plantation management powered by solar energy that is globally recognized.

Our vision is, “The production of stevia extract/sweetener, a future Global food commodity on a Mechanized/Robotic plantation”. Given the demand growth of clean-label food sweetener ingredients, we believe we have created a natural, organic and GMO-free whole food-commodity platform that will disrupt the traditional food production landscape. The company is recognized by the Ministry of Agriculture (MOA), the Malaysian Agricultural Research and Development Institute (MARDI), and the National Agricultural Training Council (NATC).

What are we trying to do and why?
1. The production of stevia, a future Global food commodity, on a Mechanized/Robotic solar powered plantation. We create innovative planting and management with GPS technology in a fully mechanized plantation.
2. Our Stevia Rebaudiana Extract comes with the following qualities:
• ‘0’ calorie sweetener extract good for diabetic, high blood pressure and obese patients.
• Stevia extract (green) can be used to make dental, cosmetic and herbal medical products.
• Stevia extract (white) can be used to make healthy food and drinks at a lower cost of
production.

Funding Milestone The total project cost for 100 acres is RM13 million. The fund will be use for land preparation, ploughing, making bunds and covering it, preparing plantlets and organic fertilizers, management costs, farm equipment, water pump, generator, water tanks and piping, agricultural machinery and maintenance equipment. From the 4th to the 6th year, the average net income per year would be estimated >RM5 million.
% Equity Allocation Since the project will be under new SPV (Agrostevia Plantation Sdn Bhd), it will be more than 50% stake
Expected ROI Estimated to be roughly 200% to 300% within 30 months
Company Name Agrostevia Worldwide (M) Sdn Bhd
Business Address Suite 8-1-1, Block B, Jalan Semarak Api 2, Diamond Square, 53000 Kuala Lumpur, Malaysia
Contact Person Khairul Ikhwan Bin Jamaludin

Fiesto Mart convenience store which using Vending Kiosk as a platform

Current Status Concept / Business Plan
Amount Invested RM 500
Funding Required RM600,001 to RM1,000,000
Description Fiesto Mart is a convenience store that uses a standard grocer business process but which use an alternative retailing platform, it offers better opportunities than regular ones by using high-tech vending kiosk as a replacement of an actual physical store. The strategy allow us to provide good priced, high-demanded products that can be bought anytime and instantly. Fiesto-mart project mission is to be the leader in introducing innovative, quality vending kiosk and grocer concept equipment to the market. Through close customer contact and excellent relationships, we will meet the needs of our customers wherever we can. Fiesto-mart is a privately-held Bumiputra corporation under Fiesto Tech company and planning on setting up an office together with a small warehouse in Bangi, Selangor.
Business Opportunity -Some residential area do not have a convenient store nearby, so residents have to ride to go to their nearest store. Fiesto mart provide a platform for resident to shop within their walking distance so they can grocery shopping instantly and conveniently.
-Most of convenient store in Malaysia open from 9.00am to 10.00pm, research shows that 71% of Malaysian worker works during office hours. So that leads majority Malaysian workers approximately 5 hours to go to convenient store before it closes. Fiesto mart will provide a platform for resident to shop any time, any day of the week. Shop that open 24 hours a day so the resident do not have to make time to shops for grocer.
-When emergency situation occur within a residential area, no immediate respond can be made. However, Fiesto Mart provide a platform which provide emergencies product like medicine and emergency kit for the times needed.
-With a right capital and good execution, this project can change our nation economy and grocery industry. It will be as huge as Speedmart, 7-eleven and even Tesco.
Revenue / Business Model We selling products to our customer by placing automated equipment as a retailing platform nearby their home with a good pricing and availability. This project have a multiple revenue:

-selling products in the vending kiosk to our customer.
-advertising slots from 19-inch screen provided in our machine.
-providing touchNgo top up service with tax.

Management Team Ahmad Fitri Hakim
-Degree in Information System
-Business Management, software and hardware analyst, advanced computer skills, strategy planning.
-2 years stand-alone company, handled over 15 IT projects.
Syazwan Amanie
-Degree in Finance
-Marketing, growth strategy, Finance.
-2 years experience as a stockbroker and financial consultant.
Muhammad Hariz
-Diploma in Metallurgy Engineering
-Technical support and Maintenance.
-Whole life experience with family business, currently taking Degree in business administration.
Muhammad Al-fateh
-Diploma in Business Administration
-Supply-chain management, researcher and graphic designer.
-Handled IT company for almost 2 years, whole life experience with family business.
Syed Ali
-Diploma in Accounting
-Accounting and Operation
-Created and Managed accounting for a company
Company Background Fiesto Tech Network is a new privately-held Bumiputra corporation that focus on innovation of existing business. We analyze existing business, find problems and go for an opportunity for its enhancement. We started from an IT solution and development standalone company named Rogue Epic registered in 2014, as the technology evolving, we find IT industry future are not as golden as it used to be. So we starts fresh, find new industry, and found a perfect project to boost our company ahead. However, since we start from scratch and recruit people for this big project, we do not have any money to pursue the project. All research, strategies and actions required are ready, all we do not have is money.
Funding Milestone OCTOBER: Mechanism training and equipment import process (RM420,000)
NOVEMBER: Warehouse,distribution, operation set up(RM150,000)
DECEMBER: Market testing and implement TouchNGo R&D system,beta-testing (RM130,000)
JANUARY: Product in the market.
FEBRUARY:
MARCH-APRIL: Product in the market.
% Equity Allocation to be advise
Expected ROI 5-7%
Risks and Mitigation People with money can easily copy the idea and have a better business network. We planned the growth of the project perfectly. With enough fund, we can gain a huge competitive advantage, we also found a perfect location and distribution route so we can dominate entire Malaysia, Singapore and Indonesia quickly and effectively.
Exit Strategies to be advise.
Company Name Fiesto Tech Network
Website/Facebook http://www.fiesto.my/fiestomart.php
Business Address No.60, Jalan 6/6b, Bandar Bukit Mahkota, 43000 Kajang, Selangor Darul Ehsan
Contact Person Ahmad Fitri Hakim

Labuan: Asia’s near-secret haven for an offshore corporation

Labuan is the “secret weapon” of Asian companies like AirAsia that want the benefits of a tax haven with the perks of a legitimate offshore corporation.

Reporting from: Kuala Lumpur, Malaysia

I’m sitting at the Kuala Lumpur Airport Low Cost Carrier Terminal, and directly in my view out onto the tarmac is the Air Asia jet that will take me the 50 minutes or so to Singapore.

It’s not the first class travel I’m used to, but for $11 plus a few taxes, it was a hard deal to pass up. Even on my way to the gate, I checked the ticket kiosk for tomorrow’s departures — still just $11 one-way, a rarity for low cost carriers.

What most of my fellow passengers probably don’t know is Air Asia’s secret to maintaining such low fares.

On the other half of Malaysia lies an obscure offshore financial center that has quietly been attracting a small following of businesses since establishing itself 23 years ago. The autonomous region of Labuan is Asia’s well-kept secret and is home to several thousand international corporations, including Malaysia’s Air Asia.

Malaysia’s Offshore Jurisdiction

Labuan is an interesting place. As an autonomous region of Malaysia, it is given wide latitude to govern its own affairs. Yet it is also part of Malaysia, which allows it to avail itself of a number of benefits of Malaysian sovereignty. Those benefits include tax benefits for foreigners.

Back in the 1980s, Malaysian leaders got together looking for ways to attract businesses seeking economic freedom. Hong Kong was the 800-pound gorilla in the Asian offshore sector at the time, and Malaysians wanted in on the game. So they declared Labuan, a small island off the coast of Borneo near Brunei, as the latest offshore jurisdiction.

The idea was simple: offer low and no-tax corporate structures for Asian and foreign businesses and attract investment to the region.

Thanks to Hong Kong’s continued economic freedom under Chinese rule, as well as other jurisdictions like Singapore, Labuan has remained largely under the radar. Yet, it has become more popular with some Asian businesses. And its connection with Malaysia makes it an interesting proposition to consider.

How to set up an offshore corporation in Labuan

Setting up a company in Labuan is straightforward. You can do so with only one director and one shareholder; foreigners qualify to be both. Your offshore company can be incorporated in just a couple of days.

For example, Labuan has full access to the sovereignty of Malaysia. That includes access to Malaysia’s nearly seventy dual taxation agreements with other countries. A foreigner using a Labuan company can therefore elect to be taxed in Malaysia rather than at home using the tax treaty.

And tax rates in Labuan are low. Holding companies — those that hold fixed assets or collect dividends, royalties, or other passive incomes — are free from tax on all earnings sourced outside of Malaysia. Whatever you earn is yours to keep, and there are no other superfluous taxes or fees.

For businesses that trade with the public (i.e. an internet business or an airline), there are two options: your company can elect to be taxed at either a flat rate of 3% or to pay an annual tax of 20,000 Malaysian ringgit (around US $6,600). That’s all. Unlike countries like the United States where you can make a one-time election which you’re then stuck with, Labuan allows companies to elect the best option for them in each tax year.

Have a new internet business that only generated $10,000 it’s first year? Choose the 3% tax rate and pay $300. Have a booming operation bringing in millions? Choose the flat tax payment of $6,600 and keep the rest.

Like any other offshore jurisdiction, the government does require you to pay an annual fee of around $750. It’s more expensive than a place like Seychelles, but it comes with a better image. The government also requires you to file an annual report with a statement of your accounts. This puts Labuan in line with other stable offshore centers like Hong Kong which require a bit of extra reporting. If you’re looking for something more than just a boiler plate locale, this can work to your advantage and may be worth the extra expense.

How does Labuan compare to other offshore jurisdictions?

Unlike places in the Caribbean where many banks could raise some cause for concern, Labuan is home to a long list of familiar banks, from DBS to Bank of America and JP Morgan to BNP Paribas. It’s a serious financial center, as opposed to some others where hack lawyers quickly churn out corporate paperwork like a mill and charge for introductions to questionable banks.

The good news is that anyone can come to Labuan and open an account. It’s more open even than Hong Kong, where banks often play coy about opening a bank account with them.

Also, because Labuan is part of Malaysia, you’ll enjoy being at the confluence of Asian and Islamic culture. Kuala Lumpur has declared its interest in becoming the world’s Islamic finance capital, and having access to these two spheres of influence can be very helpful.

Despite the Islamic influence in Malaysia, Labuan mostly uses common law, and non-Muslims are not subject to any Islamic finance dictates. The only real restriction is that you can’t settle transactions in ringgit.

In addition to companies like Air Asia, many wealthy Asians — especially Chinese — have begun to learn more about Labuan as another option for conducting business overseas. If you’re looking for an offshore company with a bit more flexibility than some of the banana republic jurisdictions, it might be one worth considering.

by Andrew Henderson (http://nomadcapitalist.com/)

Capital Pitching Session #7

Wednesday, October 19, 2016 (8:00 PM to 10:00 PM)

AMPM Cafe 
11A, Jalan USJ21/5, 47630, Subang Jaya (AMPM Cafe is a 3 storey shophouse beside the Main Place Mall, USJ 21. It is 5 minutes walk from USJ21 LRT Station. The meeting room is on 2nd Floor.)

Why Join Us?

To SMEs and Start-ups Entrepreneurs, do you need to find investors? Would you like to pitch to investors from one of Malaysia’s most active Entrepreneur-Investor matching platform with multi million Ringgit of deals closed each year? Come and pitch in CAPITAL Pitch session!

To Investors, are you looking for alternative investments, investing in high growth SMEs and perhaps the next Grab? Come and listen to bold and visionary entrepreneurs in CAPITAL Pitch session!

To All Others (you can be both an entrepreneur and an investor or maybe you just want to network and learn), come and network with entrepreneurs and investors who will inspire you to take the next bold step.

Pitching Rules:

1. Entrepreneurs are allowed to pitch for 5 minutes and then take questions and for another 5 minutes.

2. Language should not be a barrier. You can pitch in any language you prefer: English, Malay, Chinese or “Rojak”.

3. Your pitch deck should at least cover the followings:

(a) Your business overview and the market potential.
(b) Background of your management team – track record, experience etc.
(c) How much you plan to raise and potential return on investment (ROI).

It’s essential that you have a descriptive, concise and well rehearsed elevator pitch. The audience will vote for the top pitch. The winner will be invited to speak and answer questions for another 10 minutes.

Regardless whether you are selected or not, the organizer will follow up on your investment proposal if it is interesting enough.

Agenda:

8:00pm Introduction, Event briefing
8:15pm Pitches and Questions&Answers (6 pitches)
9:15pm Crowd voting
9:20pm Sharing by guest speaker about funding & investing
9:40pm Winner’s presentation (1 winner)
9:50pm Closing & Networking

To Pitch

There are only 6 pitching slots per session based on “first come first serve” basis. Submit your pitch deck to the organizer: colinphang.capital@gmail.com to book your slot by 12 October 2016.

The session is free but we ask that you register in advance as space is limited. RSVP now to pitch, listen to pitches and network.

Private Investor : Jason Chee

Preferred Investment Amount RM50,000 or less
Preferred Investment Opportunity technology, tourism and hospitality related, logistic, big data
Will NOT Invest In Restaurant, food
Preferred Location Doesn’t Matter
Public Profile Currently an equity portfolio manager with 7.5 years of experience in ASEAN and Global mandates.
Started angel investment with 3 in portfolio – Venzee.com, ahlijasa.com, qourier.com. Venzee successfullly raise US$4.5m in series A, Ahlijasa is in the midst of finalizing seed, and qourier is trying to raise SG$300k for 12 month runway.
I was a software engineer prior to my asset management career.
Able to provide advice on business model and strategy, investor relation, network to listed companies.
NAME Jason Chee
Address Singapore

Crowdfunding, venture capital, angel investing?

Crowdfunding, venture capital, angel investing – there seem to be so many different ways to get funding for my business. Which one is best and are there any downsides to letting other people own a share of my company?

Eleanor Lawrie of This is Money replies: You could feel like a kid in a sweet shop when it comes to the different forms of investment on offer for your small business.

But while the offer of ‘free money’ may sound tempting, it’s important not to seek outside funding too quickly, get into anything you don’t understand, or give away more of your business than you want to.

Here we look at how to choose the right time to look for an external backer, the different forms funding can take – and how to successfully pitch to investors.

When is the right time to look for outside investment?

While many small businesses would like to take their time expanding, it’s important to be flexible in order to take advantage of opportunities as they arise.

Bivek Sharma, head of small business accounting at KPMG, says: ‘Slow, organic growth can be appealing, especially compared to the alternative of taking on debt or giving up equity, but competition complicates the picture.

‘If competitors secure cash injections and invest in talent, technology or materials that put them in a better position to jump on new business opportunities, they can quickly eat into the territory of the more cautious.

‘For most young businesses, the reality of growth opportunities is that they are often fast and erratic, not slow and steady. In these moments, outside investment rounds can be a great asset.’

If your business is keen to grow and is seriously considering outside investment, there are a few questions to ask first:

Why do I need outside funding?

Sharma says: ‘Being clear in your own mind about exactly why you need extra capital can give you a great steer on which funding route will best suit your business.

‘For example, a start-up may need seed funding to help establish their concept, before going for a larger round when looking to scale-up.

‘Established businesses may need investment that is focused on scaling, whether that’s for additional staff, equipment or new technology.’

How much should I ask for?

Once you know how you would put the money to work, you can start to calculate a good amount to ask for.

Sharma says: ‘Having an appropriate figure in mind is important when approaching investors. Ask for too little and you may need to generate further rounds of funding, which can damage the business’s credibility.

‘Apply for too much and you run the risk of being turned down or out-pricing potential future backers.’

Which type of funding is right for my needs?

Funding options have increased exponentially in the past few years, and it’s worth taking time to consider which route would suit your business best. These can really differ in terms of the amount on offer, the speed of the process and the strings attached.

SMEs need to consider what they are prepared to give in exchange for a cash injection, whether that’s paying interest on a loan, or giving away equity in the business.

Bivek says: ‘My advice is to ignore the hype and focus on your own needs and goals. Just because some businesses raise millions through crowdfunding doesn’t mean it’s right for everyone. Consider every option and whittle them down.’

Peer to peer lending/crowdfunding

Early stage companies may want to investigate peer-to-peer (P2P) platforms such as InvestDen and Funding Circle, which match growing companies directly with organisations and individuals who want to lend to them.

The idea is that, by cutting out the banks, individuals who lend to you get a better rate of return. At the same time, your business may be able to borrow at a cheaper rate than the banks offer – if you have a good credit score.

These loans are collated so that lenders’ money is put into a bucket of different companies or individuals put together by the platform to even out their risk profile.

The risks of this type of financing are borne mainly by the lenders as their money isn’t protected by the FSCS. However, SMEs who borrow through peer to peer lending need to treat it the same as they would a bank loan – you won’t necessarily be accepted, and if you don’t pay it back on time your credit score may be affected and you may be chased by a debt collection agency.

Meanwhile, crowdfunding lets individuals financially back your product or service. On some sites the aim of this is to help charitable or socially conscious projects get off the ground, and the backers get nothing back other than the satisfaction of seeing it come to life.

But usually, businesses offer something in return, like equity (shares) in the business, or debt (bonds or mini-bonds).

Once on the crowdfunding platform, you have a set time-frame to attract the funding you need. In most cases you will not receive any of the investment if you fall short of the target, but you are usually allowed to raise more than your target. This means it’s important not to set a target higher than you can realistically raise.

Crowdfunding can be a useful marketing exercise in itself, helping to raise the profile of your business while (hopefully) attracting your desired level of funding.

Angel Investors

Angel investors tend to be successful or affluent business people who want to financially back promising companies, usually in exchange for debt or equity. These investors will sometimes also offer guidance and support, and will often have expertise in the sector they are investing in.

Sharma says: ‘Angel investors can be a good option for the super ambitious, as they often provide a sizeable lump sum. They frequently act as business mentors too, and are happy to invest time to guide start-ups.

‘Making sure you are eligible for the Seed Enterprise Investment Scheme (SEIS) can make the investment considerably more attractive to these investors, and can mitigate the higher risk involved with large amounts of money.’

Venture Capital firms

Venture capital firms usually offer much bigger sums than angel investors – usually at least £1million – but are likely to expect a higher rate of return and/or more equity in your business.

Sharma says: ‘A more established high growth company with excellent potential, for example one with valuable intellectual property, may be well-suited to venture capital. This can work well if your aim is to increase value in a short time, for example, if you’re aiming to sell the business in three years.’

While this level of funding can have a huge impact on your business, venture capitalists can also take a long time to decide whether to invest, so this method may not be a good choice if you need funding quickly.

Businesses also have the option of selling their intellectual property – the ideas behind their product or service – often in the form of a patent or copyright that they have already secured.

Corporate investment

It may sound counter-intuitive, but small companies can sometimes attract funding from more established firms in the same industry. For example, in the 2000s, McDonald’s took a 33 per cent stake in upmarket sandwich chain Pret a Manger and Google invested $1billion in fellow search engine AOL, as part of a strategic alliance.

Sharma says says: ‘If you have a disruptive product, consider speaking with the companies you are looking to shake-up – they might be keen to buy a stake in the business as a defensive measure.

‘Just make sure a corporate investor is keen to share in your success, rather than simply neutralise the competition.’

What makes a winning pitch?

Once you’ve worked out which form of investment is right for you, the next step is to make sure you nail your funding pitch.
The best way of doing this will depend on your audience. For example, crowdfunding investors are unlikely to be experts in your field, so you need to be clear in your pitch about what your business has set out to achieve and why this represents an exciting opportunity for them.

Meanwhile, venture capitalists or angel investors are likely to ask probing questions about the inner workings of your business – so you need to be prepared for that and make sure you know all your facts and figures.

However, there are a few tips all small businesses would do well to bear in mind, regardless of who they are pitching to.

Sharma says: ‘You should be able to explain your business in one or two simple sentences. Being able to succinctly describe your product or service, and the problem it solves, is critical to securing investment.

‘For certain sectors, such as technology, it can be helpful to give a demonstration, or talk through a prototype, which will help potential funders to visualise a complex idea.’

While backers may think your idea is good, they will also want to know pretty early on what’s in it for them financially.
Sharma says: ‘One of the most important things to get across is how you plan on generating revenue. The bottom line is that backers look for a financial return, so you need to prove that your idea is a promising investment.

‘Lastly, excite investors! Enthusiasm for a venture, plus expression of your own expertise and tenacity can be a great asset.’

By ELEANOR LAWRIE for www.thisismoney.co.uk

Underwater Drone prototype development

Current Status Concept / Business Plan
Amount Invested RM300,000 ++
Funding Required RM1,000,001 to RM2,000,000
Description We are currently at 70% of R&D stage and seeking for external fund to fund our prototype making, testing and manufacturing.
Business Opportunity Across Malaysia, we are being surrounding with ocean and we have a lot of businesses going on with it. For Q1 of 2016 report by BMI Research; 85 oil field are active. Further more, we have more than 20 international ports, more universities are offering marine subject and so the scientific research related to marine, our diving industries are growing even faster, underwater footage is very demanding and RC hobbyist are currently showing the trend of pioneering new things. By these data, Our market research has shown that low cost ROV are highly demanding. Currently, ROV is only for big industry’s related company. The cheapest ROV is around 50,000USD and yet the owner still has to hire ROV’s Pilot. 9 out of 10 marine industry’s player do not have the capacity to afford this almost compulsory tool. They would prefer rental and the cost is still expensive. What we are offering is an affordable user friendly ROV for everybody.
Revenue / Business Model Based on the size of market and defined market area, sales projections for the first year are RM3,700,000.00. We project a growth rate of 20% per year for the first three years. On start up, we will have six trained staff to provide ROV services and expect to hire four more this year once financing is secured. To begin with, co-owner Pupa digital studio will be scheduling appointments and coordinating services, but we plan to hire a full-time marketing group this year as well. Already, we have served 40 potential clients and we plan to aggressively build our client base through internet, newspaper, local television and direct mail advertising. The enthusiast on-site professional underwater technologist is sure to appeal to the target market throughout the Malaysia (before we go international).
Management Team PUPA DIGITAL STUDIO have been in diving industry for almost 16 years. Headquartered in Cheras, Selangor. The company is owned by partners of MOHD NAHAR BIN MOHAMAD and SHAHRIZAN SALLEH. NAHA has extensive experience in diving industry (technical and recreational) and been there since 2000 while SHAHRIZZ (Honda’s top salesman award 2015) has worked in sales and marketing for 15 years and counting.

Even though PUPA DIGITAL STUDIO are production and broadcasting related company, we are proactive at finding new opportunity to expand our business venture. For years we have been shooting underwater and this new product finding are 200% related to us and our company’s mission and vision.

The management of PUPA DIGITAL STUDIO consists of co-owners NAHA and SHAHRIZZ. Both partners will be taking hands-on management roles in the company. Beside that, we are being supporting by our recently appointed staffs for research and development program of “Ayer Satu”. Siti Noor Amani Mohamad, a master’s degree holder in Science Mathematics from Universiti Malaysia Terengganu is our coding and formulation engineer. Siti Mardhiah Mohamadon, a bachelor in Aircraft Engineering Technology (HONS) is our software engineer. Nor Athira Azli, a diploma holder in Architecture is our CAD designer.

Together, we were working very hard to achieved our first milestone of the R&D.

Company Background PUPA DIGITAL STUDIO has started business since 2008 but registered as company on 2014. Working originally as freelancer, we decided to form a company to move further. Our nature of business are videography, photography, editing, outdoor event, consultation and assisting marine research. Even though we are most likely film production company, but we are always been optimise about opportunity and development. This propose project we see as our next venture. We have invested to this project R&D for about RM300,000.00 ++ and its 70% done.
Funding Milestone SEPT-OCTOBER: Chassis fabrication, special part ordering, assembling process. (RM600,000)
NOVEMBER: Prototype’s lab testing before prototype meet the real environment.
DECEMBER: Heading to real ocean. Testing the prototype to the limit and fine tuning. Final step is to send for manufacturing and certification.
(RM1,300,000.00)
JANUARY: Product launching. Event, Internet, TV, Newspaper. PRE-ORDER
(RM100,000)
FEBRUARY: Sales And Marketing.
MARCH-APRIL: Product in the market.
% Equity Allocation to be advise
Expected ROI 7%
Risks and Mitigation Big company with fund might copy this and do better promotion. That’s why we seek larger fund to make sure we are able to play this game.
Exit Strategies to be advise
Company Name Pupa Digital Studio
Business Address NO 12A Lrg CP4/38, Tmn Cheras Perdana, 43200 Cheras, Selangor,
Contact Person mohd nahar mohamad