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Leading Change Across Asia

Entrepreneurs

Since 2001, BANSEA has worked with thousands of entrepreneurs to fine-tune their business plans and provided mentoring and investment opportunities to fantastic teams and ideas. Regardless of where you are from, we welcome a conversation with you if your company is domiciled in Singapore or in the Southeast Asia region.

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Investment

If you meet our criteria for investment, please proceed to submit your business plan for evaluation. Our FAQ answers some of the most frequently asked questions that we receive.

1. Submission to BANSEA

2. Review and selection by the board

3. Invitation to BANSEA meeting and distribution to BANSEA angels

4. In-depth assessment and intelligence gathering

5. Decision

Portfolio Companies

Criteria

Type: Operating Companies

Excludes: project financing and business ideas

Stage: Seed, Pre-series A, Series A

Companies with a clear business model, business plan, governance structure, and dedicated team.

Sector: Any sector as long as there is an innovation angle

BANSEA members do not traditionally look at traditional businesses or real estate.

Region: Singapore or Southeast Asia

Or remote companies with a clear strategy to enter SEA markets.

Capital Required: 100K SGD to 1M SGD

For larger amounts, BANSEA could team up with a network of capital sources.

Management team
  • Is your team experienced, driven, coach-able, and willing to cede some control and decision-making authority to outside investors?
Target Customer
  • Do you have a clear market segment?
  • Is there a demonstrable and significant demand for your proposed solution or product?
Market size
  • Are the projected revenues in your product category large and growing?
  • Can this be a several hundred million dollar market?
Competition
  • Have you identified potential competitors?
  • Do you understand your company’s differentiation points?
  • Will true barriers to entry help your company to maintain a competitive advantage?
Technology
  • Have you proven the concept behind your product or technology?
  • Can this be confirmed with data or by objective experts?
  • Have you built a comprehensive business plan to commercialize the technology?
Protected intellectual property
  • Have you protected your intellectual property?
  • Have you performed an exhaustive search to be sure that you are not infringing on patents or trademarks held by others?
Sales strategy
  • Do you have a plan to achieve widespread market penetration for your products and services?
  • How will you do this as efficiently as possible?
  • Will you create an internal, direct sales team, or will you rely on external channel partners?
Profit potential
  • Can you demonstrate how consistent margins and cash flow growth will be achieved?
Capital needs
  • Do you require between $100,000 to $1,000,000 to finance growth activities, including product development, recruiting key staff, launching sales and marketing activity?
Financial projections
  • Have you developed reasonable financial projections – including an income statement, cash flow and balance sheet and supporting spreadsheets – based on logical, realistic assumptions?
Exit strategy
  • Do you have a clear exit strategy that will enable angel investors to generate a return of at least ten times their initial investment within five to seven years?
Business plan
  • Have you developed a comprehensive business plan that articulates your key business strategies for how you will grow your venture?
Is an Angel Investment right for me?

It is important that you understand who we are, how we operate, what we look for in potential investments, and what we expect in return. We encourage you to read the entire section of “For Entrepreneurs” if you are new to angel investing and are interested in raising funds through BANSEA.

Angel groups benefit entrepreneurs through exposure to a wider set of potential investors, and a structured process that facilitates a relatively quick and efficient investment decision. Angel investing represents a significantly large and growing portion of early stage capital available to startup companies.

What is an Angel Investor?

Angel investors are wealthy individuals who invest in high risk, early stage ventures by reserving a portion of their total investment portfolios to provide emerging companies with seed and startup capital through direct, private investments. Their goal is to achieve higher returns than the typical public markets provide. Most angels are active investors – who contribute their time and experience, as well as offer introductions to valuable contacts essential to the company’s success – because they enjoy the thrill of helping entrepreneurs grow their businesses. To maximize the value added, most angels specialize in industries or technologies they understand, and invest only in companies within close geographic proximity.

What is an Angel Group?

Angel investor groups vary in structure, from formal to informal. Formal groups follow strict participation requirements that guide members’ minimum investment activity and event attendance. Some groups pool members’ capital to make investments on the group’s behalf, while others allow individual members to invest in specific deals of interest.

A typical angel group’s investment ranges widely from $100K to $1M per deal, depending on how many group members are interested in the deal. While no two angel groups operate exactly alike, most angel groups maintain a local or regional geographic focus in order to maximize members’ ability to actively engage in the growth of their investments.

Angel groups often have web sites that provide directions for business plan submission. After screening business plans for top-quality deals that match the group’s criteria, these groups organize regular monthly breakfast or dinner meetings for members to hear pitches from companies selected to present. If the group (or members of the group) decides to proceed, interested members commonly collaborate on due diligence and deal negotiation. Based on the group’s structure, investments are either made directly by individual members, or by the group as a whole. Most groups apply standard terms to their investments, with some flexibility to negotiate.

Angels typically invest between $25K and $100K per transaction individually, and from $100K to $1M as a group. They invest in one to four transactions per year. Angels are generally patient with an average term for holding an investment of 8 years. For the risk and added value angels provide, they seek returns of at least ten times their investment.

What are angels looking for?

Angels evaluate based on management team, market opportunity, growth potential, as well as other factors. Angel groups invest in comapnies that offer exceptional opportunities for high returns on investment. This usually implies early stage ventures with the potential to achieve high growth, strong market position and sustainable advantages. Angel groups generally invest in companies that they believe have the potential to grow to more than $50 million in annual revenue within five years. This should be either in a developing market or in an existing market with international scope.

Screening of your application

Our Screening Committee will screen your application, review your business plan and decide on 1 of the following 3 outcomes:
1) Your company will be invited to present at the forthcoming Networking Event.
2) Your company is not invited to present at the forthcoming event but your business plan will be disseminated to all members.
3) Your application will be rejected with no presentation nor business plan dissemination.

A key determining factor is whether your idea could be of interest to our members.

Presentation to membership

Following the successful screening process, you will deliver a 10-minute powerpoint presentation and address questions for an additional five minutes at our forthcoming event. A syndication will be formed to conduct the following phases when interest is high for presented deals. Alternatively, individual members could liaise directly with you for further dialogue.

Due Dilligence

The syndicate will verify the statements made in your business plan, presentation and financial projections. The syndicate members will research your team’s background and track record. If you play an active role in facilitating this process, it will help to expedite a final investment decision.

Term sheet negotiation

After successful completion of the due diligence process, the syndicate will present a term sheet that defines the structure of the investment deal – including type of equity and board of directors representation – using industry standard terms and provisions.

Funding and Beyond

When all parties are satisfied with the terms and language contained in the term sheet, the deal can be executed. But remember, closing the deal is only the beginning of the angel funding process. Now you have access to a network of value-added contacts and experienced professionals who can provide essential guidance for the growth and success of your venture. Adhering to the responsibilities at this stage will enable you to get the most from your angel relationship.

Is an Angel Investment right for me?

It is important that you understand who we are, how we operate, what we look for in potential investments, and what we expect in return. We encourage you to read the entire section of “For Entrepreneurs” if you are new to angel investing and are interested in raising funds through BANSEA.

Valuation

Your valuation must fit within our risk/reward expectations for the investment. Typically, we look for pre-money valuations well below $3 million, from as little as $250K. It takes unusual situations (e.g. a company with existing revenues, issued patents and demonstrated growth) to get us to consider a pre-money valuation higher than $2 million.

Full-dilution

In determining valuation we take into account the effect of all commitments to issue shares, which is called the fully-diluted number of shares. More specifically, the fully-diluted number of shares includes all shares that you would issue if all unconditional and contingent commitments to issue shares were to be given effect (e.g., exercise of options and warrants, conversion of preferred shares, exchange of debt for equity, etc.). Moreover, we expect a reasonable number of shares to be already reserved (and counted as part of full-dilution) for filling out the key management slots and for other employee stock options.

Pre-money valuation

The pre-money valuation, simply put, is the value you put on your company before getting the capital you seek. To compute: multiply the fully-diluted shares immediately prior to the proposed financing (e.g., 2 million fully-diluted shares) by the price/share of the proposed financing (e.g., $1/share) to yield the pre-money valuation ($2 million, in this example). If you add the proposed financing amount (e.g., $500K) to the pre-money valuation you get the post-money valuation ($2.5 million in this example).

Pre-money valuation based on percent of company

Some entrepreneurs are more used to thinking in terms of offering some percent (e.g., 20%) of their company for some amount (e.g., $500K) of financing. Numerically, divide the proposed financing ($500K) by the offered percentage (20%) to get the post-money valuation ($2.5 million), and subtract the money ($500K) from the post-money ($2.5 million) to get the pre-money valuation ($2 million). Note that these are just two different ways to compute the valuation; and hence, as expected, yield the identical results.

Investment value vs. company valuation

It is important to keep in mind that early stage investors will likely have their equity interest in your company diluted (made smaller) by later investors. For example, if angel group members invest $500,000 at a pre-money valuation of $1 million (and thus end up owning 33% of the company), and then a venture capital firm invests $5 million the following year at $5 million pre-money valuation, the original angel group investors will now own only half as much of the company, even though the company value has increased more than three-fold. As a result, because of the early stage at which we invest, you should know that angel group members generally receive 20-40% of the company’s fully diluted equity in exchange for their investment.

How many companies does BANSEA process per month?

BANSEA receives numerous business plan submissions each month. Our funding process involves a thorough screening process where about 3 companies per month are selected to present to our members at our forthcoming networking event for funding consideration. To stand out from the rest of the crowd, ensure that you meet our investment criteria and are fully prepared with a polished business plan and presentation.

If your company fits the investment criteria, and your answers to the above questions are “yes”, please upload your case using the link below and send us an email to [email protected] Please also include any additional documentations such as business plan, presentation deck and information memorandum.

Click here to submit (a new window will open).