Imagine having a platform that you can tap on to draw funding for your startup, seek mentorship, and obtain business incubation support? StarHub has created just that. The telco has recently established Crowdtivate; a stage for entrepreneurs to promote their products or services effectively in the marketplace. The Crowdtivate website will begin full operation next month to serve a range of various functions alongside crowdfunding.

First of all, what is crowdfunding?

Crowdfunding is the system of financing a project or a business venture by collecting modest contributions from a large number of people. It is well-known in the United States where small business owners pitch their business plans online in a bid to inspire others enough for them to pledge cash to support their venture.

I see. What can I expect Crowdtivate to do for me?

Entrepreneurs who market their goods and services on Crowdtivate will be jointly managed by StarHub and Crowdonomic, an existing crowdfunding platform in Singapore. Their startups will receive various forms of support in terms of business management, marketing assistance, and software development at no cost.

Why would StarHub do this?

Telcos like StarHub are facing an urgent need to identify innovative ideas and solutions, and have realized that tapping on the masses may present them with a way to address the need. The popular vote for a certain business proposal may indicate to StarHub of the large potential in the growth and success of that prospective business. Such an indication is especially significant to StarHub as the telco is actively looking into how it can improve its own services by incorporating novel ideas and solutions from entrepreneurs.

“We’re looking at forming patnerships,” said Mr. Mock Pak Lu, the Chief Technology Officer of StarHub. This paradigm of collaboration is a fresh departure from the usual practice of large corporations acquiring small firms to possess their services. StarHub has embarked on this route of partnering with would-be entrepreneurs so that they can continue to have a stake in the business and build it to success.

singapore telcos crowdfund startups

That sounds great. But is StarHub alone in this?

Apparently not. StarHub is currently engaged with other telcos in the region in the common pursuit of spurring entrepreneurship by channeling capital among other forms of assistance for them. One such telco that has gone beyond its traditional perimeters of business model to sow seeds of enterprise among prospective entrepreneurs is SingTel.

SingTel has founded Innov8 Sparks, which is a venture capital firm that has partnered with telcos in Australia, Thailand, Indonesia and the Philippines to support entrepreneurs to grow their businesses regionally. To date, it has offered assistance to 130 startups by providing workspace, market data, and business contacts among other resources. One such startup to have emerged successful is Zap, a Philippines-based company that has gained immensely from building a wide network of industry connections.

Hmmm. What’s in it for the common public who contribute money for the businesses?

It depends. In crowd-lending services, which are different from crowdfunding, funding is obtained from people who lend money to the business in expectation of some returns. These returns are a form of interest on the money people have invested in the businesses. This asset class is beneficial for people who wish to make modest-sized investments of about $100, where they can also indicate the interest rate they wish to earn from the money they lent.

Is there a platform for small businesses to benefit from Crowd-lending?

Yes! A local startup called MoolahSense has established an online platform to pair small companies with potential bankers, who are pretty much every person in the crowd. All an entrepreneur needs to do is register and provide some information about themselves and their companies for lenders to scrutinize before indicating the amount of loan required and the interest rate he is willing to incur. MoolahSense will then match them with a registered lender within 2 weeks. However, the requirement is that the loan amount has to be at least $30,000 or 70% of the requested loan amount, whichever higher. Once a match is identified, an automatic contract is prepared for both lender and borrower to sanction the loan and disburse monthly repayments to the lender.

You said that entrepreneurs who wish to borrow money need to provide some information. What kind of information is required?

Entrepreneurs who wish to borrow money from MoolahSense need to provide evidence of annual net revenue of at least $100,000 along with two years of trading information and one year of financial statement. Their companies’ credit worthiness and corporate data will each be cross-examined by  the Credit Bureau and ACRA respectively. Only then the entrepreneurs can obtain unsecured loans from crowdlending that ranges from $30,000 to $300,000, at one to three years of repayment period.

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