Deals and exits needed to draw VC and PE funds

SIMPLER rules and incentives will encourage more venture capitalists (VCs) and private equity (PE) funds to set up shop in Singapore, but it is more important to ensure a steady stream of attractive deals and lucrative exits, market players say.

VCs, who typically invest in startups, say deal flow is key and that they want less compliance here, along with more sources of funding such as from government institutions. For PE funds, which usually go for more mature companies, consultants say greater clarity on tax and a more vibrant local equity market for initial public offerings (IPOs) would likely attract more funds.

The Committee on the Future Economy (CFE) says in its report that more "smart and patient" growth capital - that is, long-term capital that "brings along ideas and expertise" - is needed for local enterprises to scale up, and suggests that the government partner private-sector funding sources such as banks, VCs and PE funds, where appropriate, to invest for growth.