Hey Entrepreneurs, the iJAM Deal Looks Pretty Sweet Actually

Update: I made amendment to reflect that some of the terms are flexible and dependent on individual incubators.

There’s so much buzz about Singapore’s National Research Foundation (NRF) Technology Incubation Scheme (pdf file), also called TIS in short.

To give you some context, the TIS basically allows co-funding of up to 85 percent of total investment for each company (or a maximum of $500,000 per investment). The incubator will provide the rest of the investment. Though not everyone is a fan of the government-backed TIS. Common complains from series A investors are:

• Valuation is way too high
• Some unfriendly terms (yes, this is a bit vague for now but I’m digging into this)

But there are alternatives. Recently, I got to understand a little more about the revamped iJAM. Michiel Wind of Crystal Horse Investment told me that iJAM has “ improved markedly” as compared to its previous version. He added:

The reload phase of 100K+100K helps tremendously since funding at that stage is hard to find in Singapore. Incubator is also now responsible for payments towards incubatees, subsequently incubator claims money from MDA, which might take time but that is not an issue.

In other words, the new iJAM is way more startup friendly. Now first, let’s see how it works.

iJAM sandwich

It works in two tiers. The first tier provides a total of S$60,000 to early stage companies. S$10,000 comes from the incubator (for eight percent equity, dependent on individual incubator) and S$50,000 from the Media Development Authority (MDA). Note that the incubator may or may not put in the first S$10,000. Regardless, it isn’t a requirement for MDA to release the S$50,000 grant. You can apply armed with just a business plan and with no registered company. That’s perfectly fine. The application goes through the incubators to whom you apply.

There’s a list over here with the contact details of every incubator. They include Exapara, Ruvento, QuestAccelerator, Fatfish, FocusTech, Crystal Horse Investment, Angels Gate, and more. After the incubator says yes, the application goes through a panel of experts before MDA finalizes the grant. The entire process will take anywhere from two to three months.

Once granted, the applicant startup will be able to receive the first S$15,000 from the incubator immediately. MDA will then transfer the money to the incubator so founders can be relieved from all the money transfer waiting bullshit. This is a huge plus because in the past the startup may need to wait up to four months before they actually receive the money. Some key points to note for iJAM tier one:

• The grant is broken up into milestones. After the first S$15,000. The startup will receive three subsequent rounds of S$15,000 dependent on if they hit the milestone (also dependent on agreement between individual incubator and startup)
• Milestones are set by entrepreneurs and agreed by the incubator and MDA. It’s usually flexible though
• Each founder is only able to draw S$1,000 per month as salary
• At least one founder needs to be a Singapore citizen or permanent resident (PR)
• Folks who are recipients of ACE Startup Grant may not apply