Running a business well

Pamela Lim

Financial Strategy and Sources of Funds

  • Introduction to Speaker

  • Where does Financial Strategy fit in business?

  • Going it Alone vs Securing Financing

  • The best type of financing for your company

  • Traditional vs Alternative financing

Who am I?

  • Mother of 5 - aged 13 to 22
  • Work Experience since 1988
    • Founder/CEO All Gifted LLC
    • Don at Singapore Management University
    • CEO of iQB (Government-linked Company)
    • ASEAN and India Managing Director of Hyperion (listed on Nasdaq)
    • Founder/CEO of 3rd Frontier (approved listed on Nasdaq and SGX)
    • Regional Marketing Manager at ACI
    • Analyst Programmer at Citibank
    • Admin Specialist at IBM
    • Cabin Crew at SIA
  • Awards
    • Dean's Teaching list 2009-2015
    • Netrepreneur of the Year 2001
    • The Most Promising Woman Entrepreneur 2000
    • Top 10 Woman Entrepreneur 1999
    • Technical Achievement Award 1999

Some of my entrepreneur students

Some of my entrepreneur students

Proverbs 31

The Wife of Noble Character

10 [a]A wife of noble character who can find?
    She is worth far more than rubies.
11 Her husband has full confidence in her
    and lacks nothing of value.
12 She brings him good, not harm,
    all the days of her life.
13 She selects wool and flax
    and works with eager hands.
14 She is like the merchant ships,
    bringing her food from afar.
15 She gets up while it is still night;
    she provides food for her family
    and portions for her female servants.

Proverbs 31

The Wife of Noble Character

16 She considers a field and buys it;
    out of her earnings she plants a vineyard.
17 She sets about her work vigorously;
    her arms are strong for her tasks.
18 She sees that her trading is profitable,
    and her lamp does not go out at night.
19 In her hand she holds the distaff
    and grasps the spindle with her fingers.
20 She opens her arms to the poor
    and extends her hands to the needy.
21 When it snows, she has no fear for her household;
    for all of them are clothed in scarlet.
22 She makes coverings for her bed;
    she is clothed in fine linen and purple.

23 Her husband is respected at the city gate,
    where he takes his seat among the elders of the land.
24 She makes linen garments and sells them,
    and supplies the merchants with sashes.
25 She is clothed with strength and dignity;
    she can laugh at the days to come.
26 She speaks with wisdom,
    and faithful instruction is on her tongue.
27 She watches over the affairs of her household
    and does not eat the bread of idleness.
28 Her children arise and call her blessed;
    her husband also, and he praises her:
29 “Many women do noble things,
    but you surpass them all.”
30 Charm is deceptive, and beauty is fleeting;
    but a woman who fears the Lord is to be praised.
31 Honor her for all that her hands have done,
    and let her works bring her praise at the city gate.


Where does Financial Strategy fit?

Business Plan Considerations

  • Mission and Culture
  • Opportunity Analysis : Idea and testing
  • Marketing Strategy and Plan
  • Management and Operation
  • Financial Analysis and Projections
  • Funding and Exit Strategy


Going Alone vs Financing

To start a business, you either have the money or need financing

What if you do not have enough funds?

  1. Obtain gifts and grants
  2. Borrow money (debt)
  3. Exchange a share of the business for money (equity)

Therefore the types of funds are:

  1. Gifts and Grants
  2. Debt Financing
  3. Equity Financing

... the entrepreneur is always the first investor

Gifts and Grants

  • Cash

  • Free use of facilities and equipment

  • Unpaid Labor by friends and family

  • Forgiveness or deferral of debts

  • Government Assistance

    • Startup Grants

    • Tax abatement

    • Tax credits

    • Research grants

    • Commercialization effort grant 

 ... may have strings attached

 ... does not require repayment

Debt Financing (1)

  • Borrowing from banks or financial institutions

  • Attracts an interest

  • Types of debts available

    • Commercial Loans

      • Real estate

      • Equipment and improvement

      • Working capital

      • Asset based

      • Accounts payable financing

Debt Financing (2)

  • Types of Debts

    • Personal Loans

      • Credit cards

      • Home equity

      • Line of credit

    • Leases

      • Vehicle lease (often with purchase option at the end)

      • Equipment leases

    • Bonds
      • Corporations using financial markets to borrow money by issuing bonds

      • Interest bearing

      • used by governments, schools, corporations

Debt Advantages

  • Lender has no say in the management of business

  • Loan payment are predictable

  • Lenders do not share in the business's profits

Debt Disadvantages

  • If repayments are not made, the lender can force the business into bankruptcy

  • Lender can take the home and possessions of the owner(s) to settle debt

  • Debt payments increase a business's fixed costs (and lowers profits)

  • Repayment reduces available cash

  • Lenders expect regular financial reporting and compliance with loan contracts

  • Debt can destroy companies

Equity Financing

  • In exchange for money, investor receives a share of the company

Equity Financing Advantages

  • Equity investor assumes greater risk than the debt lender

  • If the business does not make money, neither does the investor

  • The investor cannot force company into bankruptcy

  • The equity investor has an interest in seeing the business succeed, and may offer help and advice

Equity Financing Disadvantages

  • Through giving too much ownership, the entrepreneur could lose control of the business to the equity holders

  • Equity financing is riskier for the investor, so the investor frequently wants influence on the firm's running

  • Demands a higher rate of returns

  • Entrepreneur must share profits with equity investor

Where and how to find capital?

Have an excellent Business Plan

  • Realistic and demonstrates you can achieve the goals
  • Cash flow projections
  • A good summary

Sources of funds

Who can you approach?

Sources of funds

  1. Family and Friends
  2. Financial institutions
  3. Venture Capitalists
  4. Angels
  5. Vendor Financing
  6. Government Supported Investment Companies
  7. Youth Financing
  8. Bootstrap Financing

Friends and Family

Can be for loans or

Offer a share of the company instead of just borrowing from friends and family

Financial Institutions

e.g. Banks, which operate on these 5 C's

  1. Collateral
  2. Character
  3. Capacity
  4. Capital
  5. Conditions

Vendor Financing

Negotiate with vendors IN ADVANCE for better terms of payment, or hold off payment for a longer period.

Never skip payment

Venture Capitalist

  1. These are companies that specialise in financing new and high potential companies
  2. They seek high rates of return (6 times over 5 years)
  3. Normally for companies generating more than $25m in 5 years
  4. Growth of 30 to 50 per cent per year, with profits of over 20%


  1. Private investors who are worth over $1m
  2. They invest for friendship,  or a desire to support entrepreneurship in a given field
  3. Investment ranges from $100,000 to $500,000.
  4. Angels seek returns of 10 times of their investment in 5 years
  5. Strategy is to get one angel in and then get the support of other co-investors.

Alternative Sources of Funds

  • CrowdSourcing or CrowdFunding

Crowd Funding

Raising small amounts of money from a large number of people typically over the internet

What is crowdfunding?

An example of crowdfunding They raised more than US$1.2m


  1. Businesses need funds to start or grow
  2. Types of funds are gifts, debt and equity financing
  3. Sources of funds are friends, family, banks, venture capitalist, suppliers, the public and yourself
  4. Crowdfunding is the latest form of financing, which means the source is the public
  5. You need a good business plan to be able to raise funds from any source


If you would like to attend a course on generating an idea or developing a business plan, please write to me at or go to


Thank you!