If you are looking to launch a business in Hong Kong, then one thing you’ll need to consider is how you are going to finance it.
Here are some of the more common types of financing you might come across, and how each of them works. Each entrepreneur has different needs, and so it is up to you to determine what is right for you.
Seed Capital Funding
Seed Capital - This is often referred to as the first round of financing. Seed capital funding
usually occurs in the first stages of a new business, perhaps where the project has yet to begin. Angel Investors usually play a key role in this stage, as the higher risk/reward attracts these investors more than Venture Capitalists, where a group decision will usually require an evaluation of activity to date, such as financial data. Generally, seed capital is not a large amount of money, usually slightly higher than basic grants and loans: this type of equity financing falls in the $100-$300,000 Hong Kong Dollars range.
Depending on your own personal circumstances there is also a start-up grant available in Hong Kong that is designed to help individuals that are subject to social exclusion and poverty. This fund is called the Social Innovation and Entrepreneurship Development Fund (SIE Fund). Grants are quite hard to get, but it is an option if you meet the requirements of this specific grant.
Funding Your Business Using Venture Capital
Venture Capital - This type of investment usually follows as the next step. It involves significantly more money and virtually always requires the investors to be involved in part of the overall running of the company and its decision-making process. The average range for this step is often in the one million Hong Kong Dollar plus range and is invested as a type of Private Equity. Obviously, the overall aim is that the investors will generate a good return via the growth of the company and ideally the eventual Initial Public Offering (IPO) of the company. Venture Capital Investments
are usually made in exchange for a percentage of the company's shares, which will provide a strong return on investment if the company is successful.
Other types of investment funding methods for businesses in their later stages include Hedge Funds and Collective Investments.
Angel Investment Funding
Ultimately, there are various types of equity financing, and the Hong Kong Investment Network has a wide range of investors that might be suitable partners for your new business.
If you are an entrepreneur looking to launch a new business in Hong Kong and are struggling to finance your idea, then the Angel Investment Network can help. You can sign-up and add your business proposal onto the network and prospective angel investors can view your project and fund it accordingly if it is something that is of interest to them. You can find investors based close by in Hong Kong, China, across Asia and further afield around the rest of the world.
Investors looking to fund business projects in Hong Kong can use the Hong Kong Investment network to hunt down projects, start-ups and businesses looking for funding.