Last year, the global startup investment reached approximately US$285 billion, representing a 38% decline compared to the US$462 billion invested in 2022.
Despite the overall decline, certain sectors, particularly artificial intelligence (AI), saw increased investment, with nearly US$50 billion directed towards AI startups, which was a 9% increase from the previous year.
Closer to home, according to the 2023 Startup Survey conducted by InvestHK, the number of startups reached a record high of 4,257, up 272 from the previous year. These startups employed 16,453 persons, an increase of 10% compared to the previous year's figure.
However, with US$285 billion sloshing around looking to be parked in startups,
This month, I moderated at an event on the market trend of investment / popular projects to be invested and the technologies of most interest to investors in Asia.
Sitting on the panel were Albert Yip, Hon.DBA, FCPA (Aust.), MSc(IS) | Chairman at Syndicate Capital Group | Chief Strategist at L&Y Law Office; Simon Yuen, Founder & CEO at Surich Asset Management Ltd, JY Chan - Partner at Wings Capital Ventures and Johnson Chng, Managing Director (International Business) at CPE.
During the discussion, these points stuck out:
- There is very little private money going into startups in the early stages.
- Many startups are stuck in series A funding rounds and are unable to progress to series B or beyond and close due to lack of funding
- Investors today require a high level of transparency before they provide funding
- Founders need to be found by investors
Another point made was about the options there are for startups to find funding. If your startup has a CFO or a financial background, it can be significantly easier to navigate the funding landscape. If not, it can be significantly harder to look for funding, prepare a pitch deck, present, secure funds and the proper mentorship that goes with it.
Here are a few options open to startups to fill funding gaps.
Relevant Posts
- Navigating the funding landscape
- Finding Funding
1. Funds Sniper
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Funds Sniper is a comprehensive platform that grants access to over 18,000 private equity and venture capital funds worldwide. The platform also connects users with more than 20,000 professionals managing these investment vehicles, making Funds Sniper one of the largest search engines in the global alternative investment sector.
This is perfect for startups looking for funding, growth stage companies, M&A professionals, financial advisors, funds of funds and more. Participation or their need for co-investments
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2. Venture Capitalists
Venture capitalists (VCs) are a significant source of funding for startups that have progressed beyond the initial stages. They typically invest substantial amounts in companies that show growth potential and a viable business model.
3. Angel Investors
Angel investors provide seed funding to startups, often in exchange for equity. They are usually affluent individuals who seek to support promising business ideas.
4. Accelerators and Incubators
These offer structured support for startups, including mentorship, resources, and sometimes funding. These programs help startups refine their business models and connect with potential investors.
5. Crowdfunding
Crowdfunding platforms allow startups to raise small amounts of money from many people, which also serves as a marketing tool to validate business ideas and build a customer base. Be warned, as of 2023, US$7.26K was the average funding per campaign (source).
6. Private Funding Schemes
Various private funding schemes exist in Hong Kong, including those from financial institutions and private equity firms. These schemes can support startups in specific sectors or stages of development.
7. Startup Funding Schemes and Support Offered by the HKSAR Government
The webpage (https://www.startmeup.hk/startup-resources/government-funding-scheme-and-support/) goes into greater detail on the various government funding schemes and support available for startups and businesses in Hong Kong.
The key highlights are:
1. Supporting Research & Development:
- Enhanced Tax Deduction for R&D Expenditures
- Funding schemes like Enterprise Support Scheme (ESS), Innovation and Technology Support Programme (ITSP), and more
2. Nurturing Tech Talent Pool:
- Schemes like Development Fund for the Travel Industry, Maritime and Aviation Training Fund, STEM Internship Scheme, and more
3. Government Co-Investment with Private VCs:
- The Innovation and Technology Venture Fund (ITVF)
4. Facilitating Technology Adoption and Patent Application:
- Schemes to support technology adoption, IP protection, and public sector trials
5. Marketing Development and Business Upgrading:
- Funding for trade/industry organizations, export marketing, and business upgrades
6. GBA-focused Schemes:
- Funding for Greater Bay Area youth employment, entrepreneurship programs, and experiential programs
7. SME Loan Guarantee and Export Credit Insurance
8. Industry-specific Funding Schemes:
- Covering sectors like construction, design, green tech, travel, and more
9. Support from Organisations like HKSTP, Cyberport, and HKPC
10. FinTech-related Funding and Regulatory Sandboxes
11. Initiatives for Innovation Solutions for Public Service Needs