Funding options for Malaysian entrepreneurs

From what I gather from the blog stats, there is a possibility that you are an entrepreneur living in Malaysia; and you are seeking for funding. Anyway, whether you are one or not, here are some funding methods:

Grants

• Cradle Investment Programme (RM50, 000)
• MDeC Creative Multimedia Cluster IP Creators Series Grant (for Animation, Games, Comics, etc) (RM50, 000)
• MDeC Pre-Seed Fund (RM150, 000)
• Ministry of Innovation, Science, Technology (MOSTI)’s InnoFund (RM50, 000 – RM250, 000)
• Ministry of Innovation, Science, Technology (MOSTI)’s TechnoFund (RM500, 000 – RM3, 000, 000) [requires partnership with research institute]
• MOSTI eContent Fund [for content companies such as games and animation]
• Multimedia Grant Scheme (MDeC) (RM1,200,000++) for MSC Status Company [technology sector] only

The above list are grants, which means you do not need to pay the grant administrator back (there will be conditions and you should always ask first). Of course government grants are public funds. Use them well and responsibly.

Pre-Seed Funding

To start up your venture, Cradle is a good choice. All you need is a good ICT idea and a rough business model. Do not wait, apply online immediately – then you will learn what they want to know in the application. But pay careful attention to your application because they take a long time to respond to funding requests; it took them six months to get back to us (there are no communication in between). Cradle is managed by MAVCAP or Malaysia Venture Capital Management Bhd – that means that Cradle is a step towards larger angel or venture capital funds.

After your Cradle grant funding period with is over, you can apply for a larger Cradle grant (rumour) of RM250,000. After that you can grow through your revenues and/or Angel or Venture Capital investment.

While waiting for your grant approval, you should design (not develop) your product, look for potential customers, pitch your idea to EVERYONE regardless of status. It will pay off. You will find out new things about your idea, have a better idea on which are of the plan and yourself that you need to improve on.

If you are in the content industry (games, animation, comics, mobile contents), MDeC have an IP Creators Series Grant. This content grant just started last year. Click on the link above to find out more. We used the proceeds from this grant for our game Quasr.

MDeC’s pre-seed fund is also new and has the largest funding size among the other pre-seed grants. Note that you cannot have a registered company (Sdn. Bhd.) when you seek this funding. That is what stopped us from applying. Well, don’t register your company until you really need to – like when you get a term sheet from a venture capital investor.

Seed Funding

Once you got your product’s prototype out, you will need further funding to continue development and go-to-market. If you are building web-based applications, you might even have your BETA website up; but you probably wont get much money back from that. You need time to build traffic, improve features, polish and marketing. At this stage you will need to hire at least a few full-time employees (plus your army of cheaper part-timers who believe in your vision while getting your grant or even before that).

To fund this stage of growth, you can either get more grants (that you are eligible for), seek debt or equity funding.

If you have some ICT projects from some other company/government (like when another company give you a project to accomplish, or when a publisher give you a green light for a publishing contract) and you need to have cash-flow to finish the project, you can seek out Malaysia Debt Ventures (MDV). Check out their website for more information, and after that call them up!

If you are starting a venture like YouTube.com or Second Life, you will need a reasonable amount of seed capital for development (payroll, consultation, tools and licenses) and hardware servers when your BETA products are out. To finance this you can seek out Venture Capital Investment, where you will have to give up a significant % of shares for the money they inject into your company.

If you need anything below 1 million, private (professional or non-professional) angel investors (rich man who wants to invest in startups) might be able to do the job.

Debt and Equity Investments

• Malaysia Debt Ventures (MDV) (Project Venture Loan of RM2 – RM120 mil) [For ICT projects with a contract]
• Malaysia Venture Capital Management (MAVCAP) (Equity/Shares/Ownership venture capital investment).
• Business Angel Network – South East Asia (BANSEA)
• Malaysia Venture Capital Association

Do not limit your funding to Malaysia, you can also go to Singapore – which I am going to write about next. We are seeking Singaporean investment and will draw a roadmap for that as well.

Roshan & Slade Loging off…

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• How to activate your creative state? by Slade
• It’s just a sign of you building a company
• Slade went mad