echelon 2010 Wrap Up Part 2 – Singapore vs. Hong Kong vs. Asia

At first blush, there is a lot in common between Hong Kong and Singapore. Both are small countries with large populations, started as a trading port, and turned into financial hubs. But, looking into the startup ecosystem and communities of both, there are still many similarities, but it seems like Singapore is perhaps 5 years ahead of HK on the development timeline. 

Seed Funding

Similar: Both have government funding available along with various ways of helping to incubate or otherwise support startup companies. 

Different: In Singapore, if you ask, you can usually get $50K SGD ($300K HKD) for starting a company. In Hong Kong, the best we have at this level is the FFF (Family, Friends, and Fools). If Hong Kong is going to grow a vibrant and robust startup ecosystem, we need to find some way to fill this seed funding gap. 

Angel and VC Funding

Similar: There is access to angels and VC funding in both places.

Different: From feedback from several Singapore financiers and entrepreneurs, there is ample seed funding, but it is difficult to find the next round of funding. It seems like this is the reverse in HK, which is why I think making seed funding more available will be quite effective.

Incubation and Mentorship

Similar: There are several programs available in both places and there are mentors in both places.

Different: I think the HK programs at Cyberport and Science Park may be better than what is available in Singapore based on the discussion I had there, however, I think the active mentorship that is available in HK is difficult to access, especially for those in these programs. The incubation programs here are probably great for companies that either have an established business they are building off of, or that have already gotten funding in place. What is lacking is active participation both between the incubators and their companies and also between the incubatees themselves. In Singapore, there is more openness between companies there, especially within incubation programs.

I think there is a very good opportunity for a private incubation program in HK that provides seed funding and mentoring which would compliment the government programs that are available.

Startup Community

Similar: Both locations have active startup companies that have some community connecting them.

Different: It seems like the Singapore community is just better established at this point. I think this also has an effect on the number and quality of startups since you would not get that feedback loop going into a younger startup, which helps to mentor them by example. I think this will continue to improve in HK, but we really have to keep actively pulling together as a community.

Asia as a Whole

Similar: To one extent or another, being in a startup company is not that well supported by families. For instance, in Japan, apparently it is common for young entrepreneurs to hide the fact from their families. It seemed like it is pretty common for many entrepreneurs from the region to have been educated overseas or they are ex-pats.

Different: It seems like each market has varying levels of government support and cultural tolerance to failure. I would guess that as we develop a positive track record for startups in the region, that it will become more accepted, and so many of the other aspects may become easier (ie. it is easier to find Family funding if they know about the company you are founding). Actually, even for me, an American in HK, my in-laws don’t really know that much detail about what I’m doing because my wife finds it difficult to explain it to them. 

So, what can help? I think following the Lean Startup methods is a good start. It will help to have people fail in a safe way and find success among the remains of those failures. For HK, it seems like it is building an active community and also making it easier to find seed level funding along with active mentorship.

Thanks for reading this, if you have any different views, please chime in the comments.

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  1. Casey Lau says:

    Another great post. Now I really regret not attending. It seems we have a long way to go here, and it makes the start-ups we have even more special!

  2. Jonathan Buford says:

    I think the startups we have right now are building the foundation to mentor the next round, which is why it is so important for us to be a community. Yeah, I’m sure that you would have had a great experience going. Well, there is next year at least. They are possibly re-naming it again apparently.

  3. Julian Lee says:

    Although I’m in the PE industry here in HK, I’m somewhat surprised to hear you say that VC/Angel funding is widely available here in HK – my impression at least is that there is relatively little true risk capital available, since practically everyone I know in the PE space in HK is focused on China.One thing that I was pleasantly surprised about at Echelon was learning about the extent of the funding options available in Singapore – if I hadn’t seen the funding handbook they passed out at the end, I would never have guessed that there were so many early stage funds in Singapore.

  4. Jonathan Buford says:

    I think that at the moment, the majority of the funding that is more available is in the range of angle and VC rather than early seed stage. It seems like those that do have funds available are not willing to take the risk on even remotely seed stage, but are waiting for when a company has revenues. I would not necessarily say that there is abundant amounts of either, but that at least for the demand, there is enough for the time being. However, without some seed level funding, it will be difficult or slow for many companies to reach the point that they are looking for Angel or VC level funding.Also, I think the government programs do compliment this stage, and with some seed stage funding available, it may be possible for many smaller companies to bypass needing further funding if they are just remaining small and sustainable businesses. In this respect, I think there is a very good opportunity right now for a shrewd investor to make some late seed stage funding available and be able to have a relatively safe opportunity and potentially excellent return.