Venture Debt Fund 1("VDF1")
(Launch date:20/02/2020)

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"VDF1" is a seed-fund that provides short-term convertible loans to SV's prospective investees .  Designed to be an easy-to-apply and fast-to-receive loan, startups such as students, fresh-grads and mid-streamers will receive funds within 5 days of application submission.  This includes the due-diligence process.


 

Easiest to Qualify/Apply

 

Fastest to Approve.

  • Step 1.  Fill up the application form here and e-pitch via zoom - 30 minutes

  • Step 2.  Submit documents here - 15 minutes

  • Step 3.  Receive funds - < 5 working days (due diligence included)


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Unlike regular loans, NO interest is charged.  No processing fee either.  In return, prospective investees give up a percentage of their companies to the fund when the latter "converts".

Venture debt = interest-free loan + strategic help

A Venture Debt ("VD") is a debt-based investment suitable for SG startups or even pre-startups seeking seed capital to start, grow or save their companies. 

 

Instead of paying interest, prospective investees incentivises the shareholder with small amounts of equity.  As shareholder, SV becomes "part of the family" and contributes to value-add the company, especially in terms of future fundraising efforts.
 

  • Purpose of VDF1:

    • In general, due diligence for any investor may take up to 6 months to complete. 

    • The purpose of the VDF1 from SEED Ventures is to provide prospective investees immediate cash relief to tide them through due diligence by another investor.
       

  • VD Investment Details*:

    • Amount:​ between $5,000 to $20,000 for between 2% to 20% of the investee's shares

    • Interest rate: 0%

    • Repayment tenure/amount: Equal instalments over 3 or 6 months (longer tenures possible in certain circumstances)

      Benefits​​:​​​  Advice, cashflow, capital gains and connections
       

  • How It Works:

    • Fill up the VDF application form here.

    • e-Pitch for VD investment via Zoom

    • Receive investment within 5 working days*

       

  • Key Benefits:​​​​

    • Strategic involvement from SV in the form of:

      • Distribution

      • Board of directors

      • Sales

      • Additional cash investments (apart from the VD)
         

  • Conditions*:

    • Singapore incorporated companies only

    • At least 1 local director

    • Person Guarantee required

    • Engagement of SV's preferred vendors (FOC service)
       

  • Who Should Apply:

    • Students, fresh-grads and mid-streamers

Frequently Asked Questions

  1. What is a "convertible" loan?  Any example?
     

    • A type of loan that can be changed into an equity investment.

      Example:

    • Let's consider a $10K loan that can be converted into 10% of shares. 

    • The loan tenure is 5 months with an interest rate of 0%. 

      >> Unit economics: $2K for 2% of shares per month

      Assuming that the loan is converted after month 4:

       

      • Total loan repaid after month 4: $​8K.  >> Outstanding loan = $2K.

      • When converted, the outstanding loan of $2K is converted proportionately into 2% of shares.

      • The investor is now a shareholder (and no longer a creditor) who owns 2% of the company.

      • The company is no longer a debtor with the $2K outstanding balance (loan is used to pay for the shares).  It retains 98% of the company.

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  2. Is a "conversion" guaranteed to occur?

    • No.  SV may not necessary elect to convert.  It has until the end of the loan tenure to decide to do so.  This right to convert goes away as soon as the loan is repaid.

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  3. Is it a personal loan?

    • No.  It is a corporate loan that only companies can apply for.  A company must be incorporate BEFORE the application can be processed.

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  4. How does it compare with a loan from a bank or a finance company?
     

    • On top of high interest rates of up to 48% (excluding fees), such institutions typically require 2 years of track record and collaterals to back a loan.  VDF1 requires none of the above.
       

    • As shareholder, SV will do its part to value-add the company (the borrower).  Banks and finance companies do not offer strategic help.

       

  5. Why is SV doing this?  What's in it for SV?
     

    • SV is a venture capital investment company that invests for capital gains.  Naturally, it is always on the look out for sound investment opportunities.

       

  6. Is it a grant?
     

    • No.  It is a debt that has to be repaid.

  7. Will the $20k be the only investment?  What if more investments are needed?
     

    • It depends on the investment opportunity.  More investments may be possible.
       

       

  8. How much equity am I expected to give up?
     

    • Usually between 2 to 20%, depending on the investment opportunity.  Maybe even more.  The terms are mutually agreed upon before the commencement of the agreement is ratified.

       

  9. Why such a short loan tenure?
     

    • The VD is designed to deliver quick cashflow relief to address short-term cash crunches, particularly during due diligence.  
       

    • The loan tenure is considerably sufficient, given that due diligence for new startups takes less than 3 months.
       

    • Longer tenures of up to 12 months may be granted in certain circumstances.

       

  10. On the matter of conversion, who decides?
     

    • The investor decides.  

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  11. Why is the pitch necessary?
     

    • For the investors to understand the investment opportunity better.​


       

  12. I am not local but am willing to incorporate a company in Singapore.  Do I qualify?
     

    • Yes, you may apply so long as all requirements (local directors, guarantors etc) in the checklist are satisfied.​

       

  13. How likely am I to receive a venture debt investment?
     

    • Plausible, if your business is scalable and enjoys recurring income streams.  

       

  14. Must it be for venture debt?  Can I pitch for a higher amount or even an equity investment?
     

    • Yes, you may.

    • However, prospective investees must be mindful of the high standards of winning pitches and should pitch for a venture debt deal as a foot-on-the-door move.  
       

    • We recommend startups to pitch for equity investments ONLY if they have traction.

  15. Ok I am interested.  What should I do now?
     

    • Please fill up the application form.  Click here.  Our staff will get in touch with you within 24 hours. 



      *Terms and conditions apply.  The Company reserves the rights to modify information contained herein without prior notice.  This is NOT an offer.