ENTREPRENEURS in the technology sector, known as technopreneurs, face a critical gap in funding as they try to get their businesses up and running, a forum has heard.

These start-up businesses manage to secure initial funding but run into trouble when they seek more cash to commercialise their new products.

These businesses can range from biomedical science to interactive digital media to environmental technology.

But a leading figure in the drive to promote entrepreneurship in Singapore, Mr Inderjit Singh, an MP for Ang Mo Kio GRC, says a solution to the gap is being worked on.

'This is a gap we're trying to plug. We're close to a solution,' said Mr Singh, who is deputy chairman of the Action Community of Entrepreneurs, which aims to foster entrepreneurship.

He is also president of The Indus Entrepreneurs Singapore, a body to promote entrepreneurship, and chairman of the parliamentary committee on trade and industry.

He added that he is 'in the working stage' to get government support for funding of between $1 million and $5 million for private local start-ups to fund the 'post-seed, growth stage' of businesses.

This issue was a hot topic at the Global Entrepolis @ Singapore's technopreneurs forum.

It heard more broad-based micro and small-grant schemes to stimulate entrepreneurship, or seed-stage financing, is available. But the subsequent stage of funding to commercialise and develop a new product is harder to come by.

'The gap in venture funding is a valid point,' said Minister of State for Trade and Industry S. Iswaran. 'Our venture capitalists are more comfortable funding expansion plans than development, and this is where we can engage the industries in what we can do to facilitate that.'

Most of the 175 venture capital firms based in Singapore use the Republic as a springboard to invest in other countries such as China and India, where there are more deal flows and more start-ups to choose from.

Mr P. Jeyaratnam, executive chairman of S&J Asia-Pacific Ventures, which helps United States and European tech companies expand in Asia as well as take Singapore companies overseas, said: 'While the entrepreneurial drive is developing and getting better, it is still not as vibrant as in other markets like India. The ecosystem here has to be slowly built up.'

Mr Iswaran said: 'Venture capitalists in Singapore will be attracted to China and India, for their sheer size, sheer opportunity and scale.'

Venture capitalists provide seed funding for start-ups in return for an equity stake in the hope the business will boom.

Oxbridge Climate Capital chief executive Kenny Tang said they are more likely to invest only at a later stage, such as nearing an initial public offering, as risks are reduced.

Because of this lack of follow-through in funding, some companies have no choice but to seek funding in the US, where venture capitalists are more willing to invest at an earlier stage, said Mr Idris Vasi, former managing director of strategic alliances at Cisco Systems.

Banks in Singapore have tended not to finance technopreneurial ventures, said Mr Frankie Tan, director of digital media technology company Encore DME. 'They are more used to investing in assets, like factories and machines, as compared to an idea.'

Mr Iswaran said: 'There are some areas we can do more.' But a venture capitalist set up with an exclusive focus on investing in Singapore is not viable, as it would be too limiting.

'What we would encourage is to see how it can combine Singapore investment proposals with opportunities in the region, and look to explore synergies,' he said.

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