Singapore is renowned as one of the leading start-up hubs in Asia (and the world). Home to more than 4,500 start-ups, it’s a haven for investors and entrepreneurs thanks to its favourable tax system. The ease of establishing a business in Singapore has also earned it one of the highest global ‘ease of doing business’ scores.
As the country’s reputation for attracting start-ups continues to rise, so too does the growth of its start-up network. Along with local, regional, and global stakeholders, venture capital firms play a pivotal role in supporting this flourishing ecosystem. In 2023, venture capital firms in Singapore produced a funding value that reached 6.1 billion U.S. dollars.
As a financial and innovation hub, Singapore presents tremendous opportunities for those looking to step into the start-up arena. If you’ve ever wondered how to start a venture capital firm, this blog is for you.
You might be starting with capital or investment experience, however, as this blog will show, having a carefully curated team is the key to success.
Join us as we spotlight the skilled professionals who can level up your venture capital game to give your firm a distinct edge.
Singapore venture capital firms operate in a dynamic yet challenging environment.
While these firms are instrumental in fostering innovation and entrepreneurship in Singapore, they face several obstacles that can hinder their ability to successfully raise, deploy, and manage capital.
Some of the primary challenges include:
High competition for quality deals – As more venture capital firms emerge, competition for the best deals becomes more intense, driving up valuations and driving down the number of under-priced opportunities.
High valuations and risk management – Valuations have grown exponentially with the influx of capital and competition in Singapore. With inflated prices comes the risk of overpaying for equity stakes in companies with a lack of proven revenue streams.
Limited exit opportunities – Venture capital firms typically generate returns through acquisitions, mergers or an initial public offering (IPO). With a small IPO market, exit opportunities can be limited (and less lucrative) in Singapore compared to more mature markets like the United States or Europe.
Regulatory and compliance challenges – Although certain processes in Singapore have been streamlined to favour businesses, venture capital firms still need to navigate a host of complex financial and operational requirements. Small firms may lack the resources to effectively manage these regulations.
Critical talent shortages – There is a growing demand for talent in areas such as artificial intelligence (AI), blockchain technology, and advanced analytics.
Without specialised talent, the growth potential of these start-ups (and their venture capital investment) is limited.
Miki Doan manages Robert Half's market-leading Financial Services division, providing bespoke recruitment solutions across sectors including Fund Management (Private Equity/Venture Capital/Hedge Fund/Family Office/Asset Manager), Fintech, Real Estate and Banking. She has a proven track record of identifying, placing, and integrating mid to senior level hires into vertical functions such as Finance & Accounting, Investment & Portfolio Management, Corporate Governance.
She says assembling the right team will make it easier to navigate Singapore’s challenging venture capital terrain.
“If you’re looking at how to start a venture capital firm, don’t discount the power of people. You might have the capital ready to go, but the right talent is the key to staying competitive in this thriving industry,” says Miki.
“In my experience, the most successful venture capital firms are those who are committed to building a strong talent network. Solid networks can be true ‘game changers’ in deal sourcing – they also provide the expertise needed to scale businesses.”
“Recruiting a skilled local team that understands the market is crucial for success and sustainability. The right team, with diverse experience and expertise, will enable your firm to stay disciplined in their investment strategies, build regional networks, and maintain strong legal and compliance support to rise above the competition in this ever-evolving ecosystem,” says Miki.
Let’s take a look at the key professionals that you’ll need when starting a venture capital firm in Singapore.
Chief Financial Officer (CFO)
A CFO works to ensure the firm's financial health and strategic growth. Overseeing financial matters, including fundraising, reporting, and compliance, a CFO helps the firm to efficiently manage its capital.
Key responsibilities include:
Fundraising
Monitoring the performance of the venture capital portfolio
Optimising fund allocation
Guiding decision-making
Providing insights on financial risks and opportunities
Adhering to regulatory requirements
Investor management
Chief Operating Officer (COO)
Managing day-to-day operations, including human resources, legal, and administrative functions, a COO helps to ensure that the firm runs effectively and efficiently. A COO plays a fundamental role in scaling the firm's operations as it grows, ensuring that its structures and processes remain efficient, compliant and adaptable.
Key responsibilities include:
Spearheading the firm’s operational strategy
Overseeing functions such as investor relations, legal and regulatory compliance and internal processes.
Aligning the firm's operational activities with its strategic goals
Facilitating collaboration between teams
Streamlining deal execution and portfolio management.
Legal Counsel
In Singapore’s complex realm of venture capital, a Legal Counsel is an inherent part of any successful venture capital firm. These critical experts work to ensure that the firm operates within the guidelines of Singapore’s many financial and legal regulations, providing legal advice on fund formation, investment agreements and compliance matters.
Key responsibilities include:
Mitigating potential legal disputes or regulatory issues
Drafting and reviewing investment agreements
Conducting due diligence on prospective deals
Managing regulatory filings with authorities like the Monetary Authority of Singapore (MAS)
Navigating jurisdictional requirements and international laws regarding cross-border investments.
Portfolio Manager
Responsible for monitoring and managing existing investments, a Portfolio Manager works to ensure that portfolio companies are poised to deliver strong returns. A key member of any venture capital firm, a Portfolio Manager will oversee the performance and growth of the firm’s investments, providing guidance to portfolio companies and facilitating exits.
Key responsibilities include:
Monitoring the progress of individual start-ups
Providing strategic guidance
Identifying potential risks and opportunities within the portfolio
Tracking key financial and operational metrics
Brokering strong relationships between the firm and its portfolio companies
Data Analyst
Providing critical insights to their venture capital firm, a Data Analyst uses data to identify investment opportunities and track portfolio performance. Their ability to simplify complex data and metrics allows the firm to make smart, well-informed decisions.
Key responsibilities include:
Analysing the market trends, financial data and performance metrics of existing and prospective portfolio companies
Leveraging data to help manage risk and identify high-growth opportunities
Using data modelling to forecast venture capital trends
Providing insights into market dynamics
Technology Specialist
Responsible for the implementation and maintenance of a firm’s technology systems, a Technology Specialist provides essential operational support. Assessing the viability of potential start-ups, these experts provide crucial guidance about whether the technology systems are scalable and sustainable enough to compete in the market. In tech-driven sectors like fintech, AI or biotech, their insights are invaluable.
Key responsibilities include:
Conducting technical due diligence on prospective investments
Guiding portfolio companies on technology development and implementation
Staying abreast of emerging technologies and future investment opportunities
Testing the technical quality of prospective start-ups
Identifying weaknesses in technical foundations and applications
Head of Compliance
The success of a Singapore venture capital firm hinges on compliance. As such, firms look to a Head of Compliance to ensure that they adhere to all relevant regulatory requirements, including those related to fund formation, investment activities, and reporting. In Singapore’s tightly regulated climate, a Head of Compliance is instrumental in ensuring that the firm operates within legal boundaries.
Key responsibilities include:
Remaining abreast of regulation changes and compliance laws set by entities like the Monetary Authority of Singapore (MAS)
Developing and implementing policies to prevent legal breaches
Conducting regular audits
Ensuring that the firm's investment practices comply with anti-money laundering (AML) laws, data privacy regulations and other legal requirements
Mitigating breaches and penalties
If you’re wondering how to start a venture capital firm, you might be unsure where to begin. Miki says recruitment efforts must be your priority.
She says, “The talent you choose to engage could make or break your firm - if they come with a strong network of industry contacts, entrepreneurs and investors, it could be invaluable for sourcing deals and building relationships.”
“Be careful and considered when it comes to talent – be inquisitive and don’t be afraid to dig deeper into what they can bring to the table. Proficiency in English and other relevant languages, such as Mandarin, is another major asset, especially when communicating with investors and entrepreneurs from diverse backgrounds,” says Miki.
Recruiting the right mix of professionals is critical to the success of a venture capital firm. With so much at stake, the right experts can help to guide smooth operations, strategic investment decisions and sound compliance.
Miki recommends partnering with Robert Half to optimise the recruitment process.
She says, “At Robert Half, we have a range of venture capital recruitment solutions available. We’ll work with you to simplify the process to get your firm up and running sooner. Our team of dedicated experts will recruit the most skilled local candidates - not only to get your firm started but to help it succeed.”
In the world of Singapore start-ups, it’s not the quantity of your capital that matters – it’s the quality of your people. When it comes to how to start a venture capital firm, know that talent is the key to success. Each expert plays a unique role in helping the firm thrive, from managing operations to mitigating risk and identifying opportunities to implementing technology systems. Together, the right talent will be instrumental in navigating the complexities of Singapore’s dynamic venture capital ecosystem, giving your firm a sharper edge.
What is the minimum number of staff required to start a venture capital fund in Singapore?
The minimum number of staff varies depending on the size and scope of the fund. At a minimum, a venture capital fund generally requires at least two to three key roles to operate effectively. These could include a Fund Manager or General Partner (GP), a Chief Financial Officer (CFO) and a Legal Counsel or Compliance Specialist. Depending on the complexity of the operations, additional staff members may be required.
What qualifications and experience are necessary for the investment team?
An investment team is typically required to hold academic qualifications as well as relevant industry experience. They are generally expected to have a degree in finance, business, economics, or engineering, or an advanced degree such as an MBA. Practical experience in sectors like private equity, investment banking, management consulting, or entrepreneurship is also highly valuable.
Are there any specific regulations or requirements regarding the nationality or residency of fund staff?
In Singapore, there are no specific regulations requiring venture capital (VC) fund staff to be of a particular nationality. That said, primary personnel, such as fund managers or compliance officers, are expected to be either Singapore citizens, permanent residents, or foreign professionals with appropriate work passes.
