How winning entrepreneurs rise above uncertainty to accelerate growth

Pol de Win, Senior Managing Director and Head of Global Sales and Origination, Singapore Exchange Limited (SGX) — which is a partner of the EOY 2020 and 2021 Singapore awards — said: “It takes a lot of courage and ambition to start a business, but the sobering truth is one in three start-ups fail within three years. Being able to stay resilient, to adapt and respond to the challenges of their entrepreneurial journeys, is what is important.” 

“In this new age of entrepreneurship, building an “unstoppable” business or product requires ambition that’s free of doubt or fear, and the ability to push on. This push also requires access to significant financial resources,” he added.

Unlocking access to capital

Indeed, access to financing and expansion into new markets are among the biggest concerns of entrepreneurs. On the former, Pol said SGX’s new special purpose acquisition companies (SPACs) framework is focused on offering credible listing vehicles that result in successful, value-creating business combinations. He further anticipates that SPACs will continue to rise to prominence as an avenue for raising funds in Asia — alongside traditional IPOs. 

Similarly, the joint initiatives that Singapore announced in September last year between various government and private agencies will provide the financing needed by companies to boost growth. These include the establishment of the Anchor Fund @ 65 and Growth IPO Fund as well as enhancements to the Grant for Equity Market Singapore scheme and SGX’s Strategic Partnership Model to develop bespoke fundraising solutions for high-growth companies.

Yet for some, the challenge of liquidity constraints is severe enough to lead to collapse. For others, it only leaves room to manage basic operations and not significant business repositioning. With sources of finance practicing stringent lending, companies may instead look to divestments or carve-outs to raise capital. Finding the right buyer may not be a simple exercise. But with M&A appetite in Southeast Asia remaining strong and continued strong interest from family offices, private equity and venture capitalists to invest in promising businesses, companies have an opportunity to benefit from carve-outs.

Growing inorganically

M&As and partnerships have long been an option for businesses to penetrate new markets with greater confidence. Beyond facilitating access to new markets, acquisitions can help large companies build their competencies or diversify products and services. Diversification can help protect companies’ bottom lines against unforeseen circumstances or in other words, build resilience.

For companies lacking in capabilities to match their growth ambitions, many have traditionally sought to acquire smaller and innovative companies to benefit from their niche expertise. Those that find M&As expensive, culturally difficult or complex given post-merger integration issues may find it appealing to collaborate with other entrepreneurs via innovation hubs or create agile cross-functional teams or “tribes” that are empowered to innovate without being encumbered by corporate structures. 

As industry boundaries increasingly blur, companies are realizing that competitors and disruptors can also co-thrive as collaborators. For entrepreneurial companies and established incumbents alike, building strategic partnerships through digital ecosystems to share resources, data and capabilities can be a powerful way to achieve differential growth together. 
 

Essentially, companies should ask themselves if their products or services can be part of an interconnected set of offerings provided by businesses across different sectors, fulfilling consumer needs in one integrated experience. To do so successfully, companies must be clear about the role that they can play in such an ecosystem and how they can monetize it.