Setting Up A Fund
 

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A fund is a means of fundraising for a specific investment purpose.  

Investors may start funds to pool investments from fellow-investors to invest in specific projects, or would-be projects that check the investors' boxes such as return-on-investment and risk-level.  It is a complex matter with many moving parts.  In addition, returns usually take at least 5 years to realise.

 

A large team of professionals including accountants, lawyers, analysts are involved.  In particular, a "general partner", usually a licensed venture capitalist, has to be appointed.

 

Think of it as pooling money to build a dormitory for foreign workers, via-a-via a luxurious bungalow neighbourhood for wealthy families.  The considerations are poles apart.  Amongst many factors, cost and return-on-investment are two salient considerations.


 

Issues Faced by Investors Seeking for Capital Gains

  • Legitimacy issues regarding fundraising (anti-money-laundering, countering the financing of terrorism etc)

  • Tax concerns/savings

  • Post-investment management issues related to encumbered companies.  See here.
    and more.
     

Benefits For Investors

  • Ability to aggregate investors to form a later pool of funds

  • Legal-wrapper

  • Professional management; no external cost

Fundraisers (company owners) may also set up funds to attract investors to invest into their own projects, if they have access to investors.
 

Issues Faced by Companies Seeking to Fundraise

  • Finding and meeting investors

  • Convincing prospective investors, especially foreign investors, about legitimacy of investments

  • Propriety of investment management

    and more.

     

Benefits For Companies

  • Dedicated fund to back operations
  • Legal-wrapper
  • Professional management; no external cost

 

Please reach out to us at ventures@smaths.com if you are keen to find out more.  
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Frequently Asked Questions

This is NOT an offer.  The company reserves the rights to amend or remove any information, rates or terms contained herein.  Information provided above DO NOT constitute legal advice.  

  1. What are the benefits of setting up a Fund?

    • Easier to woo investors (Legitimacy and propriety of management)

    • Turn-key Admin Support 

    • Access to network of ​AI/IIs for future fundraising rounds
       

  2. Who is it for?

    • For Accredited Investors "AI" and Institutional Investors "II".

    • For companies seeking to fundraise.
       

  3. How much does it cost to set up and maintain?

    • Professional fees usually involve 3 cost components, (1) mandate fees, (2) management fees and (3) success fees. 

    • The mandate fees are usually fixed (or retainer-based) while the management and success fees are usually taken at a percentage of the Assets Under Management (AUM).
       

  4. What is AUM?

    • The amount of money raised by the fund, which should be no less than USD2,000,000.
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  5. How is fund managed by who?  By a team:

    • Fund Administrator - usually an accounting firm; must possess "Corporate Service Provider" licence from Accounting & Corporate Regulatory Authority (ACRA).

    • General Partner - usually a venture capitalist; must possess relevant "Fund Manager" licence from the Monetary Authority of Singapore (MAS).
       

  6. How can SV help me if I am seeking to set up a fund for my investor/company?

    • For AI/II: SV is able to help in both aspects - Fund Admin and General Partner.

    • For companies: to look for investors.

  7. What is the timeline?

    • Usually within a month, subject to Know-Your-Client (KYC) checks and approvals from Authorities.
       

  8. I am keen to find out more.  How should we proceed?

    • Please contact us at ventures@smaths.com.  We will get back to you within 1-2 working days.​